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Things are getting crazy.  Maybe it is a side effect of cabin fever. people areloosing their sense of logic.

The gold standard was a failure. Check Wikipedia. Certainly would not be any different today.

IQD part of CBI reserves ??? That's not logical . If a central bank could count it's own currency as a reserve it would just issue a big bond put it in the reserve and call it even it would declare any value it wanted.  Just a numbers game. There would be no change in real value in the world market. Only BIS and IMF can state what can be used as a reserve currency.

The possibility that a RV of the dinar  would solve Iraqs problems is impossible .  The only thing that would is a massive increase in oil revenues and that is not likely.

The idea that a RV of any amount would cause banks to want to buy dinar is Guru pupu. Banks will buy (i.e. broker) dinar ONLY when they have a customer for it .. WHO would that be ???  The only people who  want dinar would be those who would have to believe there would be profit to be made that is better and less risky than some other investment .. Many more would want to SELL than buy.

 

 

 

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The belief that the IQD is purposly UNDERvalued is FALSE.  The CBI has issued more dinar and the reserves have been depleted by at least 20 Bn USD.  They also may have sold some gold.  We wont know until the CBI issues the annual report for 2019. 

They are talking about raiding the reserves again to cover COVID19 stimulus.  

The street price is up to 1280:$.  Sort of proves the autoins have been proping it  up for a long time. It will be interesting to see the value when they open the auctions .

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  • 3 weeks later...

Iraqs goose (oil income) is cooked.  CBI/MOF policy has been to stabilize the exchange rate using CBI reserves. A ploy to keep the citizens happy and the elite business men rich was wasteful. i.e. corrupt.  It should have been stopped years ago .  Now the fix , if possible , will be painful.  Cutting salaries and removing subsidies Is essential. 

I can suggest one quick  solution . Simply double the exchange rate to 2400:1  and release more dinar.  Prices of everything imported will gradually double but will give the GOI some time to work on the solution. 

I am surprised to not see any reports of the death rate in Iraq !!!  I dont know if it is censorship or they dont have an organized system to report the dead.

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THINK !

The GOIs problem is that it is not getting enough dollars to convert to dinar .... Their payroll is not getting smaller.  .

SO Reducing the exchange rate to less than the current 1190 will NOT solve that problem.. They  need to increase the rate to say 2500:1 or Cut the payroll in half. Can they just lay off half the people ?  I dont think they have unemployment so they would have increase in welfare.

OR actually cut salaries in half. 

Both would cause more civil strife.  

They already have cancelled all public projects , so that means most contractors are out of work.  .

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