one cent RV would bankrupt the country

[rockfl9]

Iraq is supported by oil revenues.   We all know that. As  AM explained the MOF gives the oil money to the CBI to sell for dinar. those dinar are then used to cover the budget which is mainly salaries. 

But we also know that the last 10 budgets required some form of borrowing . The drsft 2020 budget planed to borrow $40Bn.   The GOIs credit is not that good. 

Today they get 1200 dinar per dollar.  At one cent they would get 100 per dollar. THINK they would need to offer 12 times the number of dollars to recieve the numer of dinar to meet the demands of the budget.  BUT oil revenues ARE decreasing AND they cant control that.'.  Would they dip into the CBI reserves???   That wouldn;t last a week !

Well the Dinarian would say wages and prices would have to be adjusted, but how.  Iraqi wages are mandated (fixed )by law. .  Setting price limits would require a new law. How long would that take? 

Even if they could find a way to adjust wages and prices by a factor of 12 they would only be right back to where they are today..   And they would NEED the small denoms or the  economy would tank.

As for the dinar out of the country the instability created would make it less desirable ,  no one would gamble a penny for a dinar.