Does deleting the currency’s zeros affect its value? An economist explains

[RJG]

Does deleting the currency’s zeros affect its value? An economist explains

1 day ago

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Economic expert, Durgham Muhammad, said on Sunday that deleting the currency’s zeros does not conflict with its value, explaining what needs to be taken before resorting to this step.

Muhammad told Jarida, “Deleting the currency’s zeros is a regulatory process that does not conflict with its value, but this step needs educational campaigns to precede it, and a transitional period for trading the currency with its zeros and the new currency to know that the two currencies are equal in value.”

He stressed, “Printing new denominations must be proportional to the market’s need to cover daily trading, provided that there is no significant increase in the monetary supply in the market so that inflation does not occur.”

https://jaredaiq.net/News/7929

[RJG]

Deleting zeros from the currency.. Is the Iraqi economy prepared for this process?

20 hours ago

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Former MP, Ahmed Hama Rashid, confirmed on Sunday that deleting the zeros or printing a new currency costs the Iraqi treasury huge amounts of money, and this process is not appropriate at the present time, as the Iraqi economy is in a stage of contraction, and the Iraqi dinar is shaky against the US dollar and other currencies. Any increase in this amount will lead to monetary inflation that will reflect negatively on the purchasing value of the Iraqi dinar.

Rashid told “Jarida”, “Deleting the zeros or printing a new currency costs the Iraqi treasury very large sums of money, considering that each new denomination of paper costs the state treasury about 6 cents, and currently more than 95 trillion dinars are printed, and this is the total size of the monetary mass, As for the trading volume - that is, what is in the banks and in the hands of citizens - the news indicates that there are more than 50 trillion dinars.”

He added, “Changing this currency or deleting zeros from it is not possible at the present time, given that the Iraqi economy is not in a stage of recovery or growth, and that countries that resort to deleting zeros are usually in a stage of recovery or in a stage of economic growth, as for the Iraqi economy.” It is currently in a stage of contraction and not in a stage of growth, and it needs time to change this currency.”

He continued, “Also, the Iraqi economy is not currently available to print a new currency or delete zeros from it, because the Iraqi dinar is already shaky against the US dollar and other currencies, and any increase in this amount will lead to monetary inflation that will reflect negatively on the purchasing value of the Iraqi dinar, meaning that An increase in the total amount or monetary mass leads to economic and monetary fluctuations and declines against all currencies in the region, especially the US dollar.”

He explained, “The printing of the Iraqi currency with these zeros in the days of Bremer was intended to make the Iraqi citizen aware that he had huge sums of money so that he would be a consuming citizen and would not prefer saving and investing, so that he would benefit from spending this money on extravagance, luxury, and the like, and this is called in economics as (( The monetary illusion (that is, a person thinks that he has a lot of money, and therefore he spends a lot, and this is what countries that are under siege for a sufficient period of time resort to until they recover from the issue of the complex in front of money).

He concluded by saying, “Deleting the zeros and printing a new currency may sometimes be authorized by the Central Bank, its members, representatives, or advisors, but there is no seriousness to changing the currency and deleting the zeros from it.”

https://jaredaiq.net/News/7940

[3n1]

them boys need to get their mind off the american dollar and get on with the IQD ... like now would be perfect .

Ty RJG

[horsesoldier]

25 minutes ago, 3n1 said:

them boys need to get their mind off the american dollar and get on with the IQD ... like now would be perfect .

Ty RJG

Too right...these pin heads can't get off the narrative. Gods sakes MOVE FORWARD, MOVE AHEAD, ITS NOT TOO LATE, TO WHIP IT, WHIP IT GOOD !!!

[rvmydinar]

1 hour ago, RJG said:

Deleting the zeros or printing a new currency costs the Iraqi treasury very large sums of money, considering that each new denomination of paper costs the state treasury about 6 cents

 

He added, “Changing this currency or deleting zeros from IT IS NOT POSSIBLE at the present time, given that the Iraqi economy is not in a stage of recovery or growth

 

but there is NO SERIOUSNESS to changing the currency and deleting the zeros from it.”

Same stuffs different date. Is this some kinds of recycled articles or something? What does the word " It is no possible " and " No seriousness " mean, according to Iraq definition? Keep talking talking and talking . 

By the way, did CBI really really already print a new currency or not? Because they keep talking how pricey printing a new currency has been.

[BETTYBOOP]

Well at least they are talking about it

[horsesoldier]

26 minutes ago, BETTYBOOP said:

Well at least they are talking about it

Yes sadly however, they've been "talking" about it for 20+ years. Someday our ship will come in: just hope ain't a leaky one.

[Laid Back]

Stop talking and delete the zeros.!

 

Go delete the zeros

Go Lower denomination notes

Go Stronger dinar

Go Purchasing power 

[Fimum]

Seriously, has this even been discussed by "experts"? I mean, really we should slow down and get some perspective on this.

[edbeach]

This Reshid guy is full of it. The Iraqui economy is growing in leaps and bounds plus inflation is low. They keep saying the country strong so why is this guy trying to act like the economy not growing. It is the best time to increase the value. He must be one of these guys looking to increase the Iran status in Iraq a Iranian puppet

[NWGUY]

The one thing I got out of these articles is the fact that they are talking about deleting the zero's, and printing new currency.  They are not just talking about deleting the 0's off the currency, they are talking both about deleting the zero's off of the rate, and then the currency.  This tells me that they won't be lopping!    The other thing about these articles is that they are saying they need to print new currency, but I know they had said years ago that they had ordered new currency, so I am just assuming that they have it available now.  We will see I guess, but I am feeling good about the investment.  I just wish they would hurry it up "soon".   

[3n1]

3 hours ago, rvmydinar said:

By the way, did CBI really really already print a new currency or not? Because they keep talking how pricey printing a new currency has been.

 

welp back in the guru hay dayz they all stated its been printed didnt put much stock in their pumper ramblings , all these years later one would have thought iran would have stole it all by now if they did ..... but shabibi did speak of new currency

( polymer ) iqd notes , your guess is as good as any's .... all the best we wait

[edbeach]

One think I think the Iraq citizens should do would be to take their 25000 dinars from mattresses and put in savings account at one of the big Iraq Banks. This would accomplish 2 things for their funds would be protected from thief and would be insured by the Iraq Bank. Next if the CBI did a lop of currency by deleting the zeros would make their dinars only worth  25 dinars. But if they already took their dinar and put in a savings collecting interest plus savings of the 25000 dinars in the savings account and money lopped they already have 25000 in a savings account and bank would not be able tell about the lop and money since in bank would still have 25000 dinars rather than the lop of 25 dinars but I believe they would need to do this before CBI deleted the zeros. Just my thought of citizens hopefully able get around this without loosing dinars. JMHO

[screwball]

8 hours ago, RJG said:

Changing this currency or deleting zeros from it is not possible at the present time, given that the Iraqi economy is not in a stage of recovery or growth, and that countries that resort to deleting zeros are usually in a stage of recovery or in a stage of economic growth, as for the Iraqi economy.”

Well this is a lie….so soon?

[screwball]

1 hour ago, edbeach said:

One think I think the Iraq citizens should do would be to take their 25000 dinars from mattresses and put in savings account at one of the big Iraq Banks. This would accomplish 2 things for their funds would be protected from thief and would be insured by the Iraq Bank. Next if the CBI did a lop of currency by deleting the zeros would make their dinars only worth  25 dinars. But if they already took their dinar and put in a savings collecting interest plus savings of the 25000 dinars in the savings account and money lopped they already have 25000 in a savings account and bank would not be able tell about the lop and money since in bank would still have 25000 dinars rather than the lop of 25 dinars but I believe they would need to do this before CBI deleted the zeros. Just my thought of citizens hopefully able get around this without loosing dinars. JMHO

Germany didn’t do it…and this is the marshall plan…they also mentioned Germany many times in artciles…they changed rate and had different conversion rates for cash, cash in bank and loans! 

[screwball]

2 hours ago, 3n1 said:

 

welp back in the guru hay dayz they all stated its been printed didnt put much stock in their pumper ramblings , all these years later one would have thought iran would have stole it all by now if they did ..... but shabibi did speak of new currency

( polymer ) iqd notes , your guess is as good as any's .... all the best we wait

I think the talk way back was they printed 7 denominations of the new currency…..polymer is def the way to go!

[screwball]

3 hours ago, NWGUY said:

The one thing I got out of these articles is the fact that they are talking about deleting the zero's, and printing new currency. 

Yep and I said to look for t articles as an indicator of how close we are

[screwball]

5 hours ago, horsesoldier said:

Yes sadly however, they've been "talking" about it for 20+ years. Someday our ship will come in: just hope ain't a leaky one.

Yes but they only talk about when about to do it….we could and I say could see articles from cbi denying this or we could see them giving as an “early next year” date..

 

[screwball]

Like I said news is in cycles..

[screwball]

Part of the education process again…..

[3n1]

15 hours ago, horsesoldier said:

MOVE FORWARD, MOVE AHEAD, ITS NOT TOO LATE, TO WHIP IT, WHIP IT GOOD !!!

 

devo with the flower pot hats - helmets or whatever they wore ... ur funny HS...cheers

[screwball]

Are lower denominations an issue when they are moving to full digital economies? Why do they even need lower denoms🤷‍♂️

[rvmydinar]

17 hours ago, 3n1 said:

 but shabibi did speak of new currency

( polymer ) iqd notes , your guess is as good as any's .... all the best we wait

Well...when shabibi did speak of new currency, does that really mean a new lower denoms was already printed at that time? 

[rvmydinar]

4 hours ago, screwball said:

Are lower denominations an issue when they are moving to full digital economies? Why do they even need lower denoms🤷‍♂️

That's really a good question. that's what I have in my mind, too. I guess it is cbi's job to answer that question.

[RJG]

Is it time to delete zeros from the Iraqi dinar?

Ziad Al-Hashemi, a researcher in international economy (Cambridge/UK) writes to Iraq Observer: Is it time to delete ?zeros from the Iraqi dinar

February 24, 2024 Opinions / Iraq Observer

The dinar and its three zeros – is it time to symak the dinar and return to the dinar 1980 Since the beginning of 2010, the talk within the Iraqi economic community has expanded about the zeros that burdened the dinar for nearly two decades, and the need to deal with them, and to rid the dinar and free it of the burden of heavy zeros.

The goal is (return to the value of 1980 dinar), like the issues and topics discussed and interacted by Iraqis, opinions have varied and differed between an enthusiastic supporter of deleting zeros and a hesitant and rejecter, and the .state of disparity continues to this day

The process of deleting zeros is related to replacing the old currency with multiple zeros with a new currency free of zeros.

In the case of the Iraqi dinar, for example, the prevailing proposal is to replace every thousand dinars of the current currency with one dinar of the new currency, and as is traded among economists in general and cashians in particular, the deleting zeros can achieve many benefits, the most important of which is getting rid of high inflation pressures on the economy and restoring confidence in the national currency and the monetary system as a whole, facilitating accounting processes and cash exchange between citizens, and reducing the cost of managing and maintaining the monetary block by reducing its .volume under circulation

These and other benefits have encouraged some countries to adopt the process of deleting zeros from their zero-sweaden currencies, in an attempt to get rid of the burdens of inflation, or to start a new economic page, going beyond the mistakes of the past.

According to some statistics, dozens of countries have tended to delete zeros, including countries in South America, Iran, Turkey and other countries in Africa and East Asia, and in total, we have 70 deletions of currency .zeros since 1960 until today Returning to the Iraqi situation, the huge accumulations over the past decades were the main and direct reason for the loss of the dinar of its value that it enjoyed during the seventies and eighties of the last century.

Some statistics indicate that the Iraqi dinar lost by 400,000% of its value between the years 1990- 2007, meaning that the commodity that the citizen bought for 100 dinars in 1990 became buying it for 400 thousand dinars in 2007, and this is a huge huge increase, which cast a shadow on the Iraqi markets and the Iraqi commercial movement, increased the pressure on public money, and ate from the value of the citizens’ cash savings, or in other words, greatly weakened the purchasing power of consumers

Accompanied by this Continuing to print the currency and increasing the cash mass in circulation, which until 1980 did not exceed 25 billion dinars, to rise in the 1990s to 40 billion, then the huge jump came in 2003 to reach the cash mass to 6 trillion dinars and exceed 27 trillion dinars in 2010 until we reached the level of more than 100 trillion dinars, and the number is able to increase, and the 25 dinars note was the largest banknote in 1990

But today we have the categories of .25,000 and 50,000 dinars Because of the achievement of a kind of security and economic stability in Iraq supported by a strong financial position due to the large oil revenues that generated huge reserves of hard currency, a group of financial and economic experts believe that it is time to start to scalate the dinar and delete its three zeros, where the process (in their opinion) will achieve a lot of positives that the Iraqi economy needs, the first of which is the return of the dinar as a store of value, restore confidence in the monetary system, reduce the demand for hard currency and get rid of the phenomenon of dollarization that has caused the economy and squandered huge financial wealth.

With the process of of flining the dinar, the issued cash mass can be reduced from 100 trillion to 100 billion and this is a number that can be managed more Efficient and .less expensive Despite the validity and opponence of this opinion in many aspects, there are some issues that must be taken into account before making such a decision.

The process of deleting zeros will not provide a magic solution alone through which the Iraqi monetary system can get rid of inflation and cover behind a young currency without zeros. Experience has shown that many countries have not benefited sufficiently from the process of deleting zeros, as the value of currencies have deteriorated in some cases, and the new currencies have returned to accumulate zeros again, in an undoubted confirmation that the fight against inflation requires other more effective solutions that are applied in parallel with the process of deleting zeros

And from those experiences, the experience of Brazil Which has been deleting zeros seven times since 1930 and with a total of 18 zeros, and this country succeeded only in the attempt in 1993, when the process of deleting zeros was associated with an economic reform process targeting the roots and .causes of inflation

With a quick look, we find that the Iraqi economy still suffers from serious structural and structural problems, including the issue of high rent, the fragility of the non-oil sectors and the deterioration of their domestic product, and the lack of sufficient discipline in monetary and financial policies and the ambiguous relationship between the two policies, not to mention the obsolescence of administrative and banking systems and the penetration of corruption all joints and sectors of the economy, and other negatives, and until the process of deleting zeros is achieved,

it is important to precede the implementation of an effective economic reform program that re-engineers and structures economic sectors, accompanied by a review and evaluation of both monetary and financial policies and adjusting the relationship between them, and developing appropriate plans to manage the transitional smoothly from an old currency burdened with zeros.

To a nascent currency that needs care and good management, so that the country can actually achieve the maximum benefit from the process of .deleting zeros and sinarg In addition, carefully choosing the appropriate timing for the implementation of the process of deleting zeros is one of the most important success factors that must not be absent from the monetary decision-maker.

The wrong timing in implementation may negatively affect the behavior of consumers, confusing the markets (including financial markets), hitting the reputation of the new dinar, returning to the state of dollarization, fleeing capital, providing new ways and paths for money laundering operations, supporting irregular and illegal operations.

This may lead to further rises in prices and inflation rates, and this means complete failure of the dinar flighting process. This process is considered a double-edged weapon that requires a high level of carefulness, planning and good execution, away from speed In the implementation to search for rapid economic or political gains

So I say in conclusion, that Iraq still needs more time, effort and work to study this process in a deep and extensive manner and prepare the necessary conditions and tools that the country needs to reach the stage of the ability to implement the process of faltering the dinar effectively and successfully, and then reap its fruits and benefit from it according to the plans set, then we can say with reassuringly that Iraq has become a strong dinar that maintains its value, comparable to other strong currencies around the world, and may be even stronger .than the 1980 dinar.