True value of the Iraqi dinar

[JRooster]

If the Iraqi Dinar takes (10) years to reach a value over $3.00 USD per Iraqi Dinar, then how come the Kuwait Dinar was revalued/reinstated to it's former or higher value within it's first week?????

RV 2010 !!!!! ---------> after shock 3rd Jan 2011 due to banks being closed.

These two situations are very diferent from eachother. Its easily misconcieved as the same but it is not at all. There are 2 factors in both that are of the same, America is involved, and so is Oil. BUT, Kuwait was not at war against us...Iraq was. We are in the rebuild and assist phase ("New Dawn") now, but has not been the case for most of our involvement here. There is a lot of resistance here for the democratic process. Kuwait already had a working government in place (Huge difference), Iraq just placed a new government. These two countries, being as close to eachother as they are, are very different from eachother. Were in very different standings when America came in boots and choppers.

[Fairways&Greens]

Excellent post! Thank you!

[PrinceAbubu]

Great post and great replys. Keep up the good work !!

Them's that know don't tell,

Them's that tell don't know..

[xxxgator]

I have replied to this post twice and it has been removed twice.Mods if there is something i'm doing wrong in my post's please let me know thanks!

I totally disagree with your break down of this article fxtrader.This article was an early 2009 suggestion from that ministry suggesting to the goi that they needed to use an ammended rate for projection of future products until an actual rate [rv rate] is given.This was suggested so projects would not be grossly underbid or accounted for.[inflated prices to secure more free money for projects in usd.] The last paragraph cleary put's this in perspective.This article was nothing more than a suggested way to estimate and not screw themselves.It has nothing to do with rv /ri ,it only suggest's using a estimating with an equal or average monetary value for the region instead of an over estimated value or under estimated value until they have been given a new or actual rate of exchange that is commeasurant to the reigon

I don't see at all any implication's in this article that the rate will be .74 USD or 1.13 USD .Although i wouldn't complain about either rate .Although your math at ariving at a rate may or may not be flawed .I beleive your reading this article out of context and making it into something it isn't to support your math theory.Please donot take this personally but this is about the 4th or 5th time this year some one has brought this article forward to back a different theory on rv. No offence but i think this is a suggestion that was made to the cbi and was either ignored or you've seen it's results in action since 2009 until now in their estimating of gov. project's .JMO peace

[Squaredaway]

I understand from reading information and rumors from various Iraqi newspapers and chat rooms that Iraq's discovery of more oil in their fields than there is in most any other country in the world should allow them to RV the dinar at a very high rate – especially with the price of oil currently at $93.00+ a barrel. However, I recall reading that the IMF has told them that they wouldn't support Iraq’s going too high; i.e., $6.00+, but that $.50 above Kuwait's dinar value of $3.56, or $4.06 could be a reasonable compromise. To Iraq, any lower exchange rate that IMF would be happy with could be considered a sanction, while Iraq, now, has the greater say as to what rate they will go with. With the lifting of Chapter 7, they’re now a sovereign nation with several privileges reinstated. Deciding on the exchange rate of their currency is one of those privileges and is now mostly their own decision with the IMF included. IMF and the U.S. Treasury are the organizations supplying the USD for the actual exchanging between Iraq and those countries that want the Yankee dolla! My opinion and feeling is that the RV rate has already been established. I feel, too, that its announcement was delayed until 2011 by the Obama administration so that it will have all year to develop a retroactive tax package to get as much revenue as possible from our cashing in dinars in 2011. Unfortunately, that would be part of the costs of doing business. Hopefully, with a predominantly Republican House of Representatives, they'll reject any punitive tax proposals from Obama . I feel and hope that the RV will be announced some time this morning (Sunday, January 2, 2011 and tomorrow afternoon (Monday, January 3, 2011 by 5:00 p.m. EST (New York City time). That’s my gut feel.

[jille]

I appreciate you taking the time to share your insights with us! Thank you very much!

HAPPY NEW YEAR!!

[RDA]

wow, when I put up that link the other day, it was deleted??????????? with a couple nasty comments.......

[xxxgator]

Don't take it to heart RDA they are all oppinions good and bad !GReat post squared away .I also an on the same page.That's why i stated i beleive the original article in this post was a smoke and mirror's tactic.

sorry for the bad typing :should read I'am also on the same page

[keepmwlknfny]

Hey Keep, regarding the 27 trillion dinar.........the CBI has pulled in 80% of that money from circulation through their currency auctions, have they not?

Its speculation that they are doing that through their auctions but still yet to be proved.....as far as the 70% number that was given out, that is from the excess liquidity which again is yet to be determined if it really was from the amount in circulation....but it was stated it was put bank into the banking sector for loans, financing, etc etc.....I just looked for the bookmark I had for that original article but since DD revamped his site its gone...it had a detailed explanation for how much and what they did with it.....I hope that they did take it out of circulation, but if they filtered it right back into the banking sector then Im not sure what to think about it......

[Rogue Knight]

I understand from reading information and rumors from various Iraqi newspapers and chat rooms that Iraq's discovery of more oil in their fields than there is in most any other country in the world should allow them to RV the dinar at a very high rate – especially with the price of oil currently at $93.00+ a barrel. However, I recall reading that the IMF has told them that they wouldn't support Iraq’s going too high; i.e., $6.00+, but that $.50 above Kuwait's dinar value of $3.56, or $4.06 could be a reasonable compromise. To Iraq, any lower exchange rate that IMF would be happy with could be considered a sanction, while Iraq, now, has the greater say as to what rate they will go with. With the lifting of Chapter 7, they’re now a sovereign nation with several privileges reinstated. Deciding on the exchange rate of their currency is one of those privileges and is now mostly their own decision with the IMF included. IMF and the U.S. Treasury are the organizations supplying the USD for the actual exchanging between Iraq and those countries that want the Yankee dolla! My opinion and feeling is that the RV rate has already been established. I feel, too, that its announcement was delayed until 2011 by the Obama administration so that it will have all year to develop a retroactive tax package to get as much revenue as possible from our cashing in dinars in 2011. Unfortunately, that would be part of the costs of doing business. Hopefully, with a predominantly Republican House of Representatives, they'll reject any punitive tax proposals from Obama . I feel and hope that the RV will be announced some time this morning (Sunday, January 2, 2011 and tomorrow afternoon (Monday, January 3, 2011 by 5:00 p.m. EST (New York City time). That’s my gut feel.

Execellent! My sentiments exactly!!!Don't think for one second that US Fed Reserve and the Rothchilds don't have economic and political pull in this.

[FXStockpiling]

[post=http://www.imf.org/external/pubs/ft/scr/2010/cr10316.pdf]http://www.imf.org/external/pubs/ft/scr/2010/cr10316.pdf[/post]

2

will review, with World Bank and United Nations assistance, the new Civil Service Law that

is currently with the Shura Council to ensure compliance with international best practices.

6. The CBI intends to maintain its present monetary policy, which is aimed at keeping

inflation in the single digits. The exchange rate remains the CBI’s main policy instrument,

given the very low level of financial intermediation. The authorities agree with staff that a

strong and stable currency provides a solid anchor for the public’s expectations in an

otherwise highly uncertain environment.

From the IMF Oct 2010

Note that the CBI wants too use the exchange rate tool to control and keep inflation in the single digits. This may point to a gradual increase in raising interest rates and exchange rates as Iraq becomes more dependent on importing consumer goods.

HI, thanks again for all the feed back! I just have to say WOW! I guess I opened up your minds to some of my thoughts here and I do accept critics mainly because the correct answer has yet to be determined and I am in a hurry most of the time so I may typo a lot. My main theme here is to put logic and real news with speculation. And I do love to answer questions but my time is limited so if I don't get to all of them before the Iraqi dinar hits the forex market I think you will all be OK with that. Right? But now that I know I struck some strings with this post I will try and devote some more free time to this and see what all we can come up with here, because trust me having 10,000 people looking for information is like having an army searching for the holy grail.

[GrahamB]

Hello, I would like to share some reading material with you all. The type of things I thought I would read when I joined.

So ready for the answer??? .74 USD per IQD but keep in mind speculation and you will see that the Iraqi's have already accounted for what I have not so believe it when they posted http://www.mop.gov.iq/mop/index.jsp?sid=1&id=308&pid=295&lng=en 1.134 Iraqi dinar per 1USD is the actual value.

Paul, that was very enlightening, especially the link back to the Iraqi Government's Ministry of Planning. I tried to find a date within the site to confirm when this summation was done, but could not, apart from the copyright date of 2010. My first reaction was that that could be an overall Site standard date, but a quick check of the page's source code shows that it is written into the page, not a function of the CCS master file.. So it would seem to be current.

Just one BIG problem with your interpretation however!

You stated a value of 1.134 Dinar per 1USD (see quote above). This would make a million dinar worth USD 881,834.21.

However the site you references shows "Estimate the amended exchange rate of the Iraqi dinar to be used in technical and economical feasibility studies and for (1.134) dollar per dinar", That is better still, as 1 million Dinar are then worth USD 1.134 Million!/

I can live with that value!! Roll On RV!!

[BruceV]

great post!!!! More More!

[FXStockpiling]

Just one BIG problem with your interpretation however!

You stated a value of 1.134 Dinar per 1USD (see quote above). This would make a million dinar worth USD 881,834.21.

Read more:

Thanks for catching that. Like I said "I have a lot of typos" should have read my first patent draft to the US Patent Office, took me about 100 read troughs to remove all the typos.

[jwonder]

I believe you this actually means that the IQD has been revalued a 1.134 to 1 USD. Thats awesome. I checked the website and it is credible. HAPPY NEW YEAR........

[FXStockpiling]

Fxstockpiling/Paul

Well I hope you are right. I think you have left a lot of important variables off the table though. We don't get a lot of FX traders in here because I don't think they feel this investment is real until it trades internationally. You seem to be an extra speculative trader and optimistic which is great.

My concerns with your theory is that Iraq is still a mess from a business perspective. Laws are extremely limited in protecting business from corruption. Security is of great concern to international business coming in. The banking system still needs a great deal of improvement and updating. Only 5% of the population make deposits in the banks. The CBI is encouraging banks to merge to improve services but it is not happening. Your RV number doesn't really address the impact on imports/exports. Currency convertibility is still difficult. Utilities and infrastructure are a problem for business coming in. Your percentages of GDP seem fairly close but Iraq has no interest in continuing to be a one industry nation at the mercy of oil price fluctuations. They allude to growing the economy through diversification of industry. If you raise the currency too high it will be way too cheap to import goods and will have no need to create other industry outside of maybe tourism and hotels. It would be fruitless to create new industry because they won't be able to compete with imports. The government employs the majority of the people and they want to privatize it. Does that happen before or after RV?

The IMF has a gigantic say in the currency valuation. Not for Iraq but for the world trade partners and world financial market. Too high of an RV would not be allowed because it would create huge trade gaps and unfair advantages once the IQD does become internationally recognized. How do you account for that? Section 4 of the IMF's Articles of Agreement spells this out quite clearly. http://www.imf.org/e.../ft/aa/aa04.htm I would also like to see you address the whole 3 zero's talk. Why would Iraq constantly bring that up? Would you agree that the majority of Iraqi's do not have much in savings? The average annual income in Iraq is around $2200. Wouldn't a substantial RV create chaos amongst the citizens with unemployment rates so high? It seems to me it would create an even bigger chasm between the social classes. That could lead to greater violence. If Iraq grows its economy more slowly it will give the opportunity for wealth creation to the masses versus the already wealthy now. I also thought that interest rate movement was another tool in central banks tool belts. If they raise the interest rates doesn't that in turn raise exchange rate value? How will that size of an RV effect inflation after implementation?

I want this to happen trust me. I just have questions as to how and I appreciate your knowledge of the subject. I look forward to an open discussion on these topics and your opinions. Thanks!

Read more: [/spoiler

This is one loooong interview here but let me just say this. Industrial Nations are very interested in making shoes, cars, furniture, paper, etc..... Wealthy Nations buy it and the buyers pay a TARIFF tax to stabilize the import competition. But look at it this way if Iraq wants to open a paper plant they would have to import wood pulp from other countries and then process it at their own paper plant and lobby for a higher TARIFF tax on the products they manufacture to keep competitive with the same type of products being imported in to Iraq.

[tampa1000]

Ive seen this six months ago, just hope its stil real!!!!!!

[hf328]

I could have sworn I saw it posted that the IMF was going to allow Iraq to RI at the pre-Saddam rate of $3.22 plus 20% for inflation or it could choose to RV at a higher rate due to the vast wealth in natural resources. They did caution Iraq however not to RV too high as it would put a strain on their economy. But the figures I saw ranged anywhere from the $3.22+20%, or $3.86 to a high of almost $16. Not that I'm saying $16 is realistic, but as the IMF cautioned Iraq..RV within reason.

[FXStockpiling]

The IMF has a gigantic say in the currency valuation. Not for Iraq but for the world trade partners and world financial market. Too high of an RV would not be allowed because it would create huge trade gaps and unfair advantages once the IQD does become internationally recognized. How do you account for that? Section 4 of the IMF's Articles of Agreement spells this out quite clearly. http://www.imf.org/e.../ft/aa/aa04.htm I would also like to see you address the whole 3 zero's talk. Why would Iraq constantly bring that up? Would you agree that the majority of Iraqi's do not have much in savings? The average annual income in Iraq is around $2200. Wouldn't a substantial RV create chaos amongst the citizens with unemployment rates so high? It seems to me it would create an even bigger chasm between the social classes. That could lead to greater violence. If Iraq grows its economy more slowly it will give the opportunity for wealth creation to the masses versus the already wealthy now. I also thought that interest rate movement was another tool in central banks tool belts. If they raise the interest rates doesn't that in turn raise exchange rate value? How will that size of an RV effect inflation after implementation?

Read more:

OK, part 2 here.

*Too high of an RV would open the door to selling the DINAR down to a price investors would want to buy it at. "In the FOREX market you can buy or sell any pair to make a profit." If you open it at a rate that investors agree is a good price to buy then you will get investment banks that will go long on these IQD pairs to establish a foot in the market and build interest on their positions.

*Three zeros this is something that I would file as propaganda to keep speculators at bay. Countries keep tight controls on monetary polices, what they really plan to do, and when they will do it. You can take the decimal statement two different ways one that moves it over on the rate exchange and the other moves it over on the paper currency. Moving it on the paper notes would be like telling your stock holders your company has over issued stocks that they can not afford to buy them back so we will just let the holders of these stocks return them to us so we may unsplit your stock 1000 times before we tell you that each stock you hold is worth 1000 times what it was????? No investor would deal with such a company or Country.

The unemployment in Iraq has been speculated around 50% with most in the poverty level living below the higher World poverty level. If 17 million Iraqi's are broke then they will love the fact that they will benefit from the oil revenues and on top of that if all these investors are focusing on Iraq, a better question will be who will the Iraqi's hire to do their dirty work once everyone has a job?

[nafarren]

http://www.iraq-businessnews.com/2010/12/27/call-to-reschedule-iraqs-debt/

this is good news, I believe!

[Squaredaway]

To: FXStockPiling:

Good report, but, when (and at what rate) is the Iraqi dinar RV going to happen? Date and Rate?

[keepmwlknfny]

I could have sworn I saw it posted that the IMF was going to allow Iraq to RI at the pre-Saddam rate of $3.22 plus 20% for inflation or it could choose to RV at a higher rate due to the vast wealth in natural resources. They did caution Iraq however not to RV too high as it would put a strain on their economy. But the figures I saw ranged anywhere from the $3.22+20%, or $3.86 to a high of almost $16. Not that I'm saying $16 is realistic, but as the IMF cautioned Iraq..RV within reason.

No.....that was all made up....the IMF has stated nothing of the such.....not sure where you got it from but I will bet you all my dinar its not official and its not from the IMF....more likely someone typing an opinion or trying to say whats fact just because it sounds good and its what you wanna hear.....sorry.....

[Halo9678]

I admit that I too am guilty of the hoop dream of a 3.00-4.00USD RV rate. It sounds great but could it really... REALLY be supported? Is it something that the global market adjust to? Possibly the most important question, is the world ready for Maliki and friends to start slinging dinar all over the world? On this one, the capitalist in me says, "knock yourself out. Be my guest" but there's another side of me that's sayin, "not so fast". A comfortable rate I think would be between the figures used for the Bahraini Dinar ~2-3USD and the Jordanian Dinar ~1-2USD. So yeah betwwen mid 1.00 to mid 2.00 range. Bearing in mind taxes, spread, etc. I'd like to think that one could time it right to walk away with 2.00USD=1.00IQD. I wouldn't think that too much of a stretch. And I am sticking to my previous statements, "I am NO guru, nor do I wish to be put in a category as such. Not a pumper, mythbuster, scholar, etc. I'm just a speculator like the rest of us". Go RV.... 2011 (sooner rather than later)

[Drunken Irish]

Feasability study found on the Ministry of Plannings website. I will try to find the link. Here it is

http://www.mop.gov.iq/mop/index.jsp?sid=1&id=308&pid=295&lng=en

Edited January 3, 2011 by Drunken Irish

[bluejay]

Nice lay out for that equasion, although I'm sure someone will come buy with an alternate theory that cancels it out, BUT LOOKS GOOD TO ME.

Thanks