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Will Iraq succeed in overcoming the financial crisis by deleting 3 zeros from the local currency?


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Why is the project to delete zeros from the currency now?

June 27, 2021

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Ibrahim Al-Mashhadani


After the Central Bank reduced the value of the Iraqi currency and the implications of this decision on the high level of prices and inflation rates in the economy and the deterioration of the standard of living of Iraqi citizens and the arrival of millions of people to the poverty line, there is talk about raising zeros from the national currency in a move to restructure the currency and thus raise a problem Controversy over the imminent implementation of this project, which was previously put forward by the Central Bank in 2005 and met strong opposition from those interested in economic and monetary affairs.


 It is indisputable that in 2003, Iraq inherited volatile economic and financial conditions and massive monetary inflation as a result of wars and the economic blockade that led to negative effects on the regularity of the commercial market, labor and production markets, and a deteriorating standard of living that generated many distortions in structures and economic relations, among which was the presence of a large monetary bloc Low-value zeros are not commensurate with any developments in the present and future of Iraq. For example, the value of the largest currency rose from 25 dinars to 25000 dinars, which requires in this situation to find exits for these situations and their remnants.


It is necessary, as we discuss this controversial project, to point out that monetary policy is the first task of the Central Bank, just like fiscal policy as a tool of economic development and economic stability in Iraq. From this point of view, reducing the monetary mass is one of the manifestations of this policy, not as a policy isolated from economic activities. The other, rather, it is an essential part of this system that aims to improve economic performance, but its effectiveness and success depends, among many things, on the existence of an efficient regulatory and administrative system for the governmental and private banking system, capable of studying and analyzing all the factors that directly and indirectly affect the determination of the mechanisms of this project. Ranth and adjust the rhythm.


The implementation of this project requires an in-depth study of the reality of the economy in the current circumstances before taking hasty action, especially if we know that one of the requirements of such a decision is to provide stability in price levels, political stability, moderation in inflation rates and an effective productive sector, all of which are not available at this stage, add to This is because deleting zeros and reducing the monetary mass as any major operation will undoubtedly leave negative effects and fear among institutions and parties that deal in cash, including:


1. Psychological effects of debt operations outside banks and the official money market that may lead, out of ignorance, to disputes that may lead to disturbances adding to the tense security situation.


2. Repercussions on the stock market, where the capital belonging to companies and individuals dealing with the market will decrease with the same percentages of zeros, which will have to close the market for a certain period for the purpose of issuing new share certificates.


3. The large sums required to print new currencies that can be employed in other fields are much needed, such as health services in the time of Corona, as well as education.


4. Raising zeros will lead to a decrease in the nominal value of the income of workers in all sectors, even if it retains its real value, a condition that precedes the drop in prices that often come late


From the foregoing, and in order to create the appropriate environment for deleting zeros, the central bank must take into account a package of measures, foremost of which is restoring the dinar exchange rate to its previous era in order to eliminate the reasons that led to raising the value of the dollar in preparation for the stability of the currency value and price levels and reducing inflation rates while curbing financial speculation carried out by private banks owned by influential parties, in addition to building foreign reserves supporting the Iraqi dinar, which is a cover for the Iraqi currency, and improving and rebuilding the payments system in connection with the future of economic development and its real and nominal data. It is very necessary to gradually build this promising project away from seasonality and urgency.

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1 hour ago, DWS112 said:

1. ) Why is the project to delete zeros from the currency now?

 

2.) foremost of which is restoring the dinar exchange rate to its previous era 

1.) Now? Absolutely yes yes yes.The project to delete zeros from the currency has to be now. " Now " is even better than " soon ". The most important is no more delays and no more BS and no more recycled articles.

2.) Which previous era ( too bad , they never mentioned the year of previous era because they like readers to get a wild guess using a crystal ball ) they were talking about? Saddam's era=3.24 usd? Or after the fall of saddam's era=1190 iqd (=0.00084 usd, then delete 3 zeros=0.84 usd ). They might think dinar holders as mind readers.

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I doubt they intend to implement this in July, but something big is looking on the horizon;maybe some very important long overdue laws will get passed and implemented. The zeros articles always seems to come out when they mention the oil and gas law. Fingers crossed they usually move and do stuff in July 

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I am going to stick around and see how long it take Iraq to go into bankruptcy because they continue to rely on oil as there main source of income. Articles like these are all window dressing. Al-Khedemi flying all over the world ad signing MOU's doesn't mean a hill of beans because they are not binding contracts. As long as Iran is running the Country Iraq will not prosper. I just want to see how long it takes for the bottom to fall out all in the name of religion and brotherhood...(Yea Right) 

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3 hours ago, DWS112 said:

2. Repercussions on the stock market, where the capital belonging to companies and individuals dealing with the market will decrease with the same percentages of zeros, which will have to close the market for a certain period for the purpose of issuing new share certificates.

July 20 Tuesday Eid al-Adha Official holiday
July 21 Wednesday Eid al-Adha bank holiday
July 22 Thursday Eid al-Adha bank holiday
July 23 Friday Eid al-Adha bank holiday

 

The market would be closed from Tues thru Sat - 5 days enough time?

Normal days of operation are Sunday to Thursday

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47 minutes ago, DWS112 said:

This time frame looks promising:

 

July 20 Tuesday Eid al-Adha Official holiday
July 21 Wednesday Eid al-Adha bank holiday
July 22 Thursday Eid al-Adha bank holiday
July 23 Friday Eid al-Adha bank holiday

 

Public holidays and celebrations in Iraq

Eid al-adha is the day where they will celebrate and sacrifice by killing the cows and the goats. After that, they will donate the meats to less fortunate people/ poor people in order to get a blessing and a good luck from their god. Therefore, i amn't pretty sure that something big is going to happen during the holiday, but i could be wrong though.

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This post by Yota, IMO indicates they are very near implementation:

Bottom of article

"the ministry provided communication cards for subscribers Land lines, in the category of 5 dinars, and another card in the category of 15 dinars, and the categories reach 100 Iraqi dinars.
 And he stressed that "the ministry's detachments deployed in the relevant departments will severely hold price manipulators accountable."

 

 

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2 hours ago, rvmydinar said:

1.) Now? Absolutely yes yes yes.The project to delete zeros from the currency has to be now. " Now " is even better than " soon ". The most important is no more delays and no more BS and no more recycled articles.

2.) Which previous era ( too bad , they never mentioned the year of previous era because they like readers to get a wild guess using a crystal ball ) they were talking about? Saddam's era=3.24 usd? Or after the fall of saddam's era=1190 iqd (=0.00084 usd, then delete 3 zeros=0.84 usd ). They might think dinar holders as mind readers.

There "Now" will be in 10 years something. 

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1 hour ago, DWS112 said:

This post by Yota, IMO indicates they are very near implementation:

Bottom of article

"the ministry provided communication cards for subscribers Land lines, in the category of 5 dinars, and another card in the category of 15 dinars, and the categories reach 100 Iraqi dinars.
 And he stressed that "the ministry's detachments deployed in the relevant departments will severely hold price manipulators accountable."

 

 

Couldn’t buy a postage stamp with 5 or 15 dinars, so you may be onto something there 

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7 hours ago, rvmydinar said:

1.) Now? Absolutely yes yes yes.The project to delete zeros from the currency has to be now. " Now " is even better than " soon ". The most important is no more delays and no more BS and no more recycled articles.

2.) Which previous era ( too bad , they never mentioned the year of previous era because they like readers to get a wild guess using a crystal ball ) they were talking about? Saddam's era=3.24 usd? Or after the fall of saddam's era=1190 iqd (=0.00084 usd, then delete 3 zeros=0.84 usd ). They might think dinar holders as mind readers.

Now is nice ! Nike! Just do it! 

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4 hours ago, horsesoldier said:

Sign these Jokers up for Comedy Store Baghdad — this is a 1ST CLASS ACT !!!  

 

sorry man , cbi is one step ahead , 

they already got a comedy act on speed dial 🤣 u just cant make this stuff up H.S. 

 

the marketing campaign organized by Visa and the Central Bank of Iraq; A local comedy group presented entertaining scenes about the additional benefits of using a Visa card

https://almawrid.news/contents/view/details?id=34663

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2 hours ago, 3n1 said:

 

sorry man , cbi is one step ahead , 

they already got a comedy act on speed dial 🤣 u just cant make this stuff up H.S. 

 

the marketing campaign organized by Visa and the Central Bank of Iraq; A local comedy group presented entertaining scenes about the additional benefits of using a Visa card

https://almawrid.news/contents/view/details?id=34663


OH THATS PRICELESS !!!!!!!!

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1 hour ago, dinarham said:

I like the part,#3, that states that they simply can't afford to print new  currency . 

if they didn't have enough money to print the new lower denoms, then why did they still keep talking about deleting 3 zeros? may be the less we read the articles about deleting 3 zeros, the quickest they prepare to do something with the iqd quietly behind closed door. . is this some kind of a distraction to confuse dinar holders out of iraq country to sell off their dinars? or did they try to hide a secret date and rate about revaluing their currency from outsiders ( dinar holders out of iraq country )? 

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