What would happen to the Iraqi dinar if the zeros were removed? Comment by Dr. Mahmoud Dagher

[RJG]

Psychological impact and money disclosure

What would happen to the Iraqi dinar if the zeros were removed? Comment by Dr. Mahmoud Dagher

 

 2024-09-29 | 12:53

964

Economist Mahmoud Dagher pointed out that deleting zeros will not change inflation rates or the purchasing power of the dinar, stressing that the importance of the process is summarized in the “psychological impact” and “facilitating accounting transactions,” in addition to knowing the sources of capital in the event that opening a bank account is required to replace the old currency with the new one.

Mahmoud Dagher, financial and banking expert, in an interview with media figure Muhammad Qais, followed by 964 Network :

The idea of deleting zeros has been on the mind of the Central Bank of Iraq for a long time, and it is under consideration. We will not be the first country to move towards this option, as Turkey, for example, preceded us by deleting six zeros from its national currency many years ago.

But let us start by removing the illusion. Removing the zeros will not change the purchasing power of the dinar, and it does not affect inflation rates at all, because the amount of legal tender issued by the Central Bank will never change. Instead of carrying a bundle of 50,000 dinar notes, it will be possible to compress them into a smaller number of notes after removing the zeros, and this will not change their purchasing power.

The amount of money on offer, according to my observations, is equal to 105 trillion dinars, and after removing the zeros, the amount will be 105 billion dinars, which is exactly the same amount, and the exchange rate will change from 1320 dinars per dollar to 132 dinars per dollar.

The Iraqi dinar is linked to the dollar, as Iraq adopts a fixed exchange rate system, or a soft peg system, according to the classifications of the International Monetary Fund, and this system has been adopted by us since 2004 until now.

The most important benefits of deleting zeros are the psychological impact on the citizen and the symbolic value of the history of the Iraqi dinar, and this is important, but more important than this is facilitating the accounting processes, as companies and individuals face many obstacles in accounting due to the huge numbers circulated in economic transactions.

Removing zeros, or changing the currency in general, may help in identifying the sources of money in the market, as it is assumed that a condition should be set for opening a bank account for every person who wants to change the type of currency in his possession, and in this way the central bank will know the sources of capital for individuals, and the door to replacement must be with a specific time limit to pressure the owners of capital.

It is better for the currency replacement process to be accompanied by intensive electronic payment activity. The process may also include changing the type of currency to “polymer” with a plastic material that increases the life of the currency and reduces the factors of physical damage to it, as Egypt and the Emirates have done with some categories of their national currencies.

The strength of a currency is not measured by the number of foreign currency units linked to it, but rather by the stability of exchange rates. This is the indicator relied upon by investors to assess the extent of risks in any economy.

https://964media.com/447586/

[Half Crazy Runner]

9 minutes ago, RJG said:

the exchange rate will change from 1320 dinars per dollar to 132 dinars per dollar.

Hmmmm …. 😑

[JonnyV]

All theory and speculative one persons opinion.  

[rvmydinar]

1 hour ago, RJG said:

1.) The idea of deleting zeros has been on the mind of the Central Bank of Iraq for a long time, and it is under consideration.

2.) And the exchange rate will change from 1320 dinars per dollar to 132 dinars per dollar.

1.) No more consideration and no more talk which will end up more delays and delays.. Just do it and see what happens. 

2.) If From 1320 to 132 dinars per dollar, does this mean delete 1 zero only? If 132 dinars per dollars, does that mean 1 dinar=US$0.0076? If , Let's say, 1 million dinars will get us=1 millions x $0.0076=USD 7,576 ( dinar holders only make 10 folds only from the original investment ).

 

Thanks god this is economist opinion only.

[3n1]

1 hour ago, RJG said:

Instead of carrying a bundle of 50,000 dinar notes, it will be possible to compress them into a smaller number of notes after removing the zeros, and this will not change their purchasing power.

 

The only way that scenario can work is coupled with a exchange rate change or everyone will push wheel barrows full of the new notes that are minus the 3 zeros , the new notes in iraq will have to have purchasing power to match the 3 zero notes currently in the marketplace ..... letsroll , we wait

[pokerplayer]

18 minutes ago, rvmydinar said:

1.) No more consideration and no more talk which will end up more delays and delays.. Just do it and see what happens. 

2.) If From 1320 to 132 dinars per dollar, does this mean delete 1 zero only? If 132 dinars per dollars, does that mean 1 dinar=US$0.0076? If , Let's say, 1 million dinars will get us=1 millions x $0.0076=USD 7,576 ( dinar holders only make 10 folds only from the original investment ).

 

Thanks god this is economist opinion only.

 

 

  pp

[rvmydinar]

3 minutes ago, pokerplayer said:

 

 

  pp

Hopefully, that is only a translation error.

[Half Crazy Runner]

31 minutes ago, rvmydinar said:

If From 1320 to 132 dinars per dollar, does this mean delete 1 zero only?

That’s the way I read it 🙁. But, as others mentioned, it’s just one guy’s opinion. 

[pokerplayer]

10 minutes ago, rvmydinar said:

Hopefully, that is only a translation error.

 

I agree with you there.

 

  pp

[screwball]

2 hours ago, 3n1 said:

The only way that scenario can work is coupled with a exchange rate change or everyone will push wheel barrows full of the new notes that are minus the 3 zeros , the new notes in iraq will have to have purchasing power to match the 3 zero notes currently in the marketplace ..... letsroll , we wait

100% and its the one thing they wont talk about......which means we are on target

[screwball]

atleast 1:1 as per gcr 

[screwball]

3 hours ago, JonnyV said:

All theory and speculative one persons opinion.  

100%

[Laid Back]

“Removing the zeros will not change the purchasing power of the dinar”

 

They will never tell us the opposite.

 

Go stronger Dinar.

[Spartakus]

He forgot to put the decimal point. instead of 132 what he meant to say was 1.32

 

[screwball]

6 minutes ago, Spartakus said:

He forgot to put the decimal point. instead of 132 what he meant to say was 1.32

 

i think thats the rate.....my guess based on contract rate of 1.18 plus inflation

[Spartakus]

Well said Screwball.

[8th ID]

11 hours ago, Spartakus said:

He forgot to put the decimal point. instead of 132 what he meant to say was 1.32

 

I know if it comes out at $1.32 to 1 dinar no one better get in my way as I get to the bank!! 😂

[Theseus]

1 hour ago, 8th ID said:

I know if it comes out at $1.32 to 1 dinar no one better get in my way as I get to the bank!! 😂

1 USD to 1.32 IQD comes out to 0.76 USD. Will still run to the bank for this. 

 

1.32 USD to 1 IQD comes out to 1.32 USD.  This is possible if the dollar was worth 1.32. Its not. Take out interest by the Feds on every dollar and it  might be worth 0.90 USD (maybe even less now Biden has been office 4 years).

 

Love it or leave it.

 

Just saying.  

[ScaryMary]

@TheseusI have always heeded your words. I have not always liked what you stated throughout the years because we all want this to happen yesterday. But I remember you stating 2025. I believe you are a very wise owl. And I very much appreciate your opinions.

Thank you.

[Half Crazy Runner]

59 minutes ago, ScaryMary said:

@TheseusI have always heeded your words. I have not always liked what you stated throughout the years because we all want this to happen yesterday. But I remember you stating 2025. I believe you are a very wise owl. And I very much appreciate your opinions.

Thank you.

I agree @ScaryMary, a lot of things are pointing to 2025. I can be happy with that. 

[NWGUY]

Come on Iraq...delete the zero's, and let's see how it shakes out.   Good, bad, or whatever.  Just be done with it!   

[chris2028]

Gee wiz I remember in 2021 hearing something about 2025 on here, possibly from @Theseus and thinking to myself, my goodness thats a long ways away. I just realized its right around the corner! I took a  hiatus from posting and being on here which made the time pass even more. Life was happening and here I am on Oct 1 and  a possibility of 2025 isn't a hard pill to really swallow. GO RV. 

[rvmydinar]

41 minutes ago, Half Crazy Runner said:

I agree @ScaryMary, a lot of things are pointing to 2025. I can be happy with that. 

Of course sooner is better.

[WheresmyRV?]

[8th ID]

21 hours ago, Theseus said:

1 USD to 1.32 IQD comes out to 0.76 USD. Will still run to the bank for this. 

At 0.76 USD, I am running to the bank! However, I have always believed it will be over a dollar. It is the only way for them to de-dollarize as they have said. They want to quit using the USD. If it holds more value than the dinar the people will still want it and will still use it. Anything less is not restoring their national pride in their currency. 
 

I do believe our politics have a lot to do with it as well. When DJT wins the election, I could see the value changing before the end of the year or right after the 1st. If the US has invested as it is claimed, then a change like this would take 30-60 days before it is felt in our economy. The Biden-Harris regime will not see any growth or economic change from such an event.