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A billion may become an alpha .. What does it mean to delete countries zeros of their currency?


DWS112
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This just came out today. Good or bad news?

A billion may become an alpha .. What does it mean to delete countries zeros of their currency? August 5, 2018

 

shutterstock_258312164.jpg?h=832a653d&itok=XIlpbFdp

 

Sunday, 05-08-2018 at 09:11
Haneen Yassin - Gulf Online


On August 20, Venezuela will be on a date with the cancellation of 5 zeros of its currency, in an attempt to adapt to inflation expected to reach 1 million percent this year due to the steady deterioration of the country since the collapse of oil prices in 2014, making it unable to maintain Its socialist economic system. 

 

But, what does it mean to cancel zeros from the currency? Has Venezuela ever taken this step? And what their feasibility and repercussions on the economy of the country and the citizen? .. "Khaleej Online" in the context of the following report in response to these questions.

 

The deletion of 5 zeros from any currency means that one million of this currency after the abolition of zeros will become only 10, and when the cancellation of 3 zeros will become 1000 and so on, and follow this procedure when the value of the currency collapses and their purchasing value is limited or not.

 

The most striking example of the collapse of the local currency is what happened in Zimbabwe. The last coin was worth $ 100 trillion, and that value did not buy a parsley package because of the inflation rate of more than 1000% 2009 and its replacement in US dollars and the South African Rand.

 

Venezuela has eliminated currency zeros in several countries. Zimbabwe has eliminated 3 zeros from its currency in 2003, Sudan has eliminated zero in 2007, Bolivia has eliminated three zeros in 2008, Romania has removed four zeros from its currency in 2005 and Turkey has written off six zeros from its currency in 2005. 

 

But deleting zeros from the currency if not accompanied by economic reforms, it will not change anything, it is not much different from adjusting the size of the banknotes or changing their colors, or add a new fee or remove a picture of them.

 

Perhaps the most important experience in the deletion of zeros from the local currency was Turkey, with intentions in neighboring Iraq also, the two countries faced many problems and difficult; because of inflation and devaluation of the currency. The following is a review of the stations of these trials.

 

- Turkey
13 years ago, on 1 January 2005, Turkey announced the abolition of 6 zeros from its local currency (Lira). Inflation in the country has forced it to print large numbers of its currency and high values since 1981.

 

The currency of the value of 20.000.000, which used in Turkey the largest paper currency in the world, and create a number of zeroes large problems in transactions, for example became difficult to read the numbers of taxi counters, and the price list of goods, in addition to the serious arithmetic errors that resulted from the number of large zeros .

 

According to statements by the current president Recep Tayyip Erdogan, in March 2008, to enter the toilet in Turkey before 2005, the Turkish citizen had to pay one million pounds, to turn this figure currently to one pound only.

 

The effect of canceling the six zeros from the Turkish lira was positive in terms of price stability, and the inflation rate fell to one percentage point.

 

But the deletion of zeros was not the only reason for the low inflation, it was accompanied by economic stability of the country, and the reform plans included most economic sectors, which led directly to the fight against inflation.

 

After Turkey's inflation rate was 70.8% in 2002 before the AKP came to power, this rate was 15.39% last July.

 

- Iraq
During the period of the total siege on Iraq between 1990 and 2003, a stifling Iraqi economic crisis emerged. The collapse of oil exports, the deterioration of industrial and agricultural production, the rise in unemployment and inflation, the non-payment of foreign debts and the chronic deficit of the state budget.

 

Therefore, it was obvious that the exchange rate fell sharply until the exchange value of the dollar reached 3000 Iraqi dinars in 1995.

 

Because of this situation, it was necessary to issue new cash classes, whose nominal value reached 250 dinars, but in fact only worth 25 fils of dinar value during the 1970s.

 

When the United States occupied Iraq in 2003, and the collapse of the value of the Iraqi currency continued, the denominations of cash 5, 10 and 15 dinars without real value and there is nothing to buy them, so the country was quick to solve the problem by issuing new categories of its currency are 50, 250, 500 and 1000 and 10,000 and 25,000 dinars .

 

The decline in the value of the currency and the issuance of new categories of them, the instability in prices and problems of exchange, buying and selling, and in the presence of a large block of cash, the number of papers 4 trillion paper, and worth more than 30 trillion dinars in various categories.

 

Therefore, the Central Bank of Iraq announced in 2011, that will be deleted 3 zeroes from the Iraqi dinar, in order to strengthen the value of currency and reduce inflation.

 

The deletion has not been implemented so far despite the announcement of Ali Alaq, Governor of the Central Bank of Iraq, in late 2016, that it will be early 2017, stressing that this support for the Iraqi dinar and make it a competitor to foreign currencies, pointing out that this project "strategic" will serve the economy of the country; The dinar will be included in the global basket of currencies in vital stock exchanges, he said.

 

Feasibility
"If the process is not accompanied by clear economic plans and reforms, I think it will not work, and there are many experiments in recent years that have proven," says economist Ahmed Musabah.

 

"Turkey's experience in this area was successful. People had to pay several million lira to buy bread in early 2000, so Ankara decided in 2005 to delete 6 zeros from the Turkish lira," he said.

 

Musabih pointed out that the deletion of zeros in Turkey was accompanied by plans and reforms covering most economic sectors, which led directly to the fight against inflation.

 

In contrast, the government of Zimbabwe decided to remove three zeros from the national currency (dollar) when inflation reached 1000% in 2003, but did not adopt sound economic plans and reforms, continued high inflation, which ended the destruction of the economy of the country and the devaluation of the local dollar, About the country in 2009.

 

Musabeh believes that removing zeros from the currency would have costs that could be burdensome for a country suffering from difficult economic conditions.

These costs include raising prices in shops and restaurants, creating problems in fixing prices, raising the costs of issuing new currencies, and decreasing exports due to sudden appreciation of the national currency.

 

To remove zeros, Mabahib said, a positive sign is the simpler implementation of financial transactions, the strengthening of the national currency and its value relative to other currencies, the ease of access to international credit, the restoration of identity and confidence in currency, the reduction of inflationary pressures, the control of the currency market and the government's overexpenditure .

Edited by DWS112
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  • yota691 changed the title to A billion may become an alpha .. What does it mean to delete countries zeros of their currency?

 

LINK

Venezuela to delete three zeros from its currency and Iraq is still afraid of "circumvention"


فنزويلا تحذف ثلاثة أصفار من عملتها والعراق ما زال يخشى 

 

27th March, 2018

The Venezuelan government has decided to delete three zeros from its currency to enter into force this year, while Iraq is still cautious in its decision because of its fear of fraud, which is expected to help to tighten and improve the performance of banknotes.
 
Venezuelan President Nicolas Maduro has ordered a change in the currency unit of the faltering local currency by removing three zeros from its value amid excessive inflation and an economic crisis in the country, Venezuelan media reported. Maduro said the measure would come into effect on June 4 and would have no effect on the Bolivar value. The action shows the collapse of the Bolivar, which fell 99.99% against the dollar on the black market since Maduro came to power in April 2013.
 
But Maduro, according to media, presented the move as a positive development aimed at protecting Venezuela from speculators in the currency market and from a US-led trade war against the Organization of the Petroleum Exporting Countries (OPEC). While the measure appears to be a revaluation, Cash for the currency as the country will not change the official exchange rate.
 
In parallel, between the governor of the Central Bank of Iraq on the words in an interview with Iraqi media: "The deletion of zeros not because of the value of the dinar, but for the purpose of tightening and improve the performance of banknotes and reducing the use of the dollar locally in circulation and exchange and storage value and standardize the size of banknotes," indicating "The subject of deleting zeros from the currency is ready but needs an environment suitable for its application to prevent manipulation and fraud by the owners of vulnerable souls.
Edited by newbieDA
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12 minutes ago, newbieDA said:

"The subject of deleting zeros from the currency is ready but needs an environment suitable for its application to prevent manipulation and fraud by the owners of vulnerable souls.

Get off your “4th point of contact” arrest those known for corruption...there’s your suitable environment!!

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37 minutes ago, Botzwana said:

Sorry guys.  That was just my first knee jerk reaction.  Ignore me.  Carry on.

 

No worries . . . I think we've ALL had that " first knee jerk reaction " at some point. . . seems these monkeys can bring that out in ALL of us with their tomfoolery. 

 

" He who is without knee jerk reaction cast the first stone " - kinda biblical, huh. ;)

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You dont really expect them to come out and say our money will go up 3000% next month do you?

There is another way they can delete 3 zeros, by taking them off the factor .00085 this is what I expect delete the three zero's alwayse ment.

And yes this article does explain a lop, I am just glad to see them talking about it again after the long break.

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46 minutes ago, KDuesing said:

You dont really expect them to come out and say our money will go up 3000% next month do you?

There is another way they can delete 3 zeros, by taking them off the factor .00085 this is what I expect delete the three zero's alwayse ment.

And yes this article does explain a lop, I am just glad to see them talking about it again after the long break.

Ya, that's why we are here. The hope that this will all come to fruitation, even though the corrupt Iraq officials are selfish pigs and could care a less about their people. There is still that chance and that educated guess with alot of luck and feeling something positive has to come out of all of this. 

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2 hours ago, DWS112 said:

The dinar will be included in the global basket of currencies in vital stock exchanges, he said.

 

If this is true then the zeros will be deleted off of the rate and not the notes.  They will need the larger notes for this as they did with the $1k note in the US.  They will want the larger notes for these transactions even though it could be done electronically it has to be backed by some form of physical paper.

 

Iraq is not experiencing hyper inflation as in other countries so there is no need to delete the zeros from the physical notes.  It all about the amount of physical notes in circulation with will become a supply and demand scenario.  Lower the supply and the rate goes up.  Look at the fact that the US prints more money and the value of the dollar declines.

 

Just my :twocents:

 

SR

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47 minutes ago, SupraRacer said:

 

If this is true then the zeros will be deleted off of the rate and not the notes.  They will need the larger notes for this as they did with the $1k note in the US.  They will want the larger notes for these transactions even though it could be done electronically it has to be backed by some form of physical paper.

 

Iraq is not experiencing hyper inflation as in other countries so there is no need to delete the zeros from the physical notes.  It all about the amount of physical notes in circulation with will become a supply and demand scenario.  Lower the supply and the rate goes up.  Look at the fact that the US prints more money and the value of the dollar declines.

 

Just my :twocents:

 

SR

 

thanks supra , excellent points there will always be a need for physical currency imo even though i have moved almost entirely electronic but still use paper / coins for things , the article dws posted talked about the countries that failed , failed to reform and change although iraq it seems looking from the outside in have done little in that space i believe they have been working on banking currency reform ect. some we read about but probably much we never will , we know from years ago they talked of drawing the note count down from 4 to 1 billion in circulation , the last time the count was around the 1 billion number iraq had a very strong currency value well above the dollar ...that was then and this is now though, if the goal was to lop it could have been done long ago Zim. venezuela , turkey and the others mentioned were very inflated and in big trouble i tend to agree the zero removal will be off the nominal rate .00086 or whatever the number is but its all speculation , security and stability is key for success and iraq is constantly in some sort of mayhem , chaotic quagmire it seems from within and from without its borders and that is exactly why for me it seems that if iraq could just do this or that they could be something in the middle east, the B rating from fitch wasn't a total let down it just shined a light on the facts we constantly learn and come to know about this country ... anticipating the future  

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Musabeh believes that removing zeros from the currency would have costs that could be burdensome for a country suffering from difficult economic conditions.

These costs include raising prices in shops and restaurants, creating problems in fixing prices, raising the costs of issuing new currencies, and decreasing exports due to SUDDEN APPRECIATION  of the NATIONAL CURRENCY.

 

sounds like an RV to me

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9 hours ago, Botzwana said:

Sorry guys.  That was just my first knee jerk reaction.  Ignore me.  Carry on.

 

Don’t Worry Botz - Ur Wife Already Sent Us The ‘Ignore This Stupid JackA$$’ App ! :o 

 

 

 

After My Wife Had Forwarded Her The Download ...

 

:D  :D  :D 

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1 hour ago, Freedomwish said:

 

But, but, but........:facepalm2:

tenor.gif?itemid=9683398

 

 

It has been forever for me been in this since 2005. If this does happen I will have so much  money I won’t know what to do with it lol. I’m not particularly materialistic but would love to travel with my girlfriend and two kids ( hopefullly soon to be three kids).

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2 hours ago, dinarbeleiver said:

It has been forever for me been in this since 2005. If this does happen I will have so much  money I won’t know what to do with it lol. I’m not particularly materialistic but would love to travel with my girlfriend and two kids ( hopefullly soon to be three kids).

I tip hat off to you dinarbeliever :tiphat:I cant imagine being in this since 2005, I got into this in 2012 and it feels like an eternity already.

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