Dinar Redenomination and Exchangeability:Rajun Cajun Post

[Inicio]

* Rajun Cajun Post: (Iraqi Dinar Redenomination and Exchangeability)

September 6, 2010

There have been a tremendous number of inquiries about the recent news that Iraq will be increasing the value of their currency and, at the same time, introduce new denominations into the Iraqi economy sometime in 2010 (currently planned). Specifically, it has been reported that the Iraq Finance Minister issued a statement saying they have prepared a plan to increase the value of the Dinar against the dollar and will introduce 25, 10, 5, 1, 1/2, ¼, and smaller (possibly 1/10 or 1/20) Dinar banknotes and/or coins. He said that successful fiscal policies pursued in Iraq have contributed to increasing the value of the Iraqi Dinar against the dollar, noting that the U.S. Dollar dropped significantly in value during the current year. Of note, he also said in a press statement that the bank has been following with great interest the phenomenon of low demand for the U.S. Dollar in the local Iraqi currency exchange markets.

Mudhhir Muhammad Salih, a member of a Central Bank advisory panel, said by the end of 2010, new banknotes will be fully introduced while the current banknotes will be gradually removed from circulation. He did not specify when the new banknotes would be issued. Both (current and new) denominations will be legal tender in Iraq until the current banknotes are completely withdrawn over a period of time. Economic analyst Hilal al-Tahhan was quoted as saying, “The bank’s move is overdue.” He said he expects the currency change to go smoothly because of the decision to allow both the current and new banknotes to coexist during an extended exchange period, leading to less turbulence in the economy.

What does all this mean?

[dweave69]

thanks for the post.

Go RV.