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too many zeroes: iraq plans to change currency niqash | Mayada Daood | wed 27 apr 11


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The Iraqi government plans to chop three zeroes off the national currency. It should make transactions easier and enhance the exchange rate. But local economists are not sure the country is ready.

Recently the Iraqi government announced that they were close to completing plans for re-denomination. Three zeroes will be removed from Iraq’s currency, the Iraqi dinar or IQD, and old banknotes will gradually be phased out. For example, this would make an IQD 1,000 note into an IQD 1 note. Currently IQD 1,000 is worth around €0.60 and US$0.85.

Logically speaking, re-denomination does not change the value of a currency nor should it cause inflation. It should make currency easier to use and increase its credibility. Re-denomination may also be a matter of political expedience.

For example, when Turkey announced a re-denomination in 2005, the country’s central bank explained that extra zeroes on their banknotes meant “problems in accounting and statistical records, data processing software and payment systems”, adding that the move to cut them was “psychologically and technically essential”.

Re-denomination can usually only be undertaken once inflation is under control and over the last few years, inflation in Iraq has dropped from over 30 percent to single digits. Nonetheless Iraqi opinions about the planned change remain divided.

Qasim Jabbar, an economic researcher, is concerned about the psychological impact the removal of three zeroes will have on locals. Additionally Jabbar does not think the time is right. “We must create a stable environment in political, economic and legal terms, in order to control the conditions during the transition period to a new currency,” he explained. “This is necessary in order to ensure that the transition is not manipulated by government departments and in society in general, where there is rampant corruption.”

Jabbar was also worried about the absence of a central authority that was truly capable of controlling the Iraqi currency market. He believed that the psychological problem will be people “focusing on the change in numbers, rather than in real value”. By rights, re-denomination should not impact the actual value of a currency; it should still buy the same goods as it did before for the same prices. “But a person with IQD 10 million will feel they have lost a fortune when the zeros are removed,” he noted.

Re-denomination is nothing new. “Many countries, such as Turkey and Germany, have also taken this step,” another Iraqi economist Kareem al-Halfi said. “But this doesn’t mean that the Iraqi experience will be like that, of those nations. Iraq has serious structural problems and high rates of unemployment. These problems cannot be solved in the short term and we need to create the economic conditions necessary to allow re-denomination.”

According to Mothahhar Mohammed Saleh, an advisor to the Central Bank of Iraq, which was established in 2004 to administer monetary policy in Iraq, the impact of re-denomination could have both positive and negative effects.

Firstly, a reduction in the large amount of currency in circulation – there is an estimated IQD 27 trillion in circulation – could have a negative impact on everyday transactions, he said. For example, one previously recorded impact in other countries has included the rounding up (or down) of prices due to re-denomination.

On the other hand, the currency will become far easier to use. “In the wholesale sector, goods are being traded using US dollars.” This process is known as “dollarization” and occurs when a country uses a foreign currency, in parallel to or instead of, its own currency because it is seen as more stable and subject to fiscal disciplined.

Anyway, according to Saleh, “this change will not be introduced hastily. It will only be introduced when inflation is under control - and after parliament and the Iraqi cabinet has gone through legislation thoroughly. They will then decide how the [re-denomination] law will be implemented.”

As Saleh said, “the Central Bank is proceeding cautiously in this matter because it realizes re-denomination could cause economic problems if implemented in haste.”

The IQD was first introduced in the early 1930s and was pegged first to the British pound, then the US dollar. After Iraq’s invasion of Kuwait, under the leadership of Saddam Hussein, strict economic sanctions saw the value of the IQD drop. By the mid-1990s, IQD 3,000 was worth around one US dollar.

In order to make purchases in Iraq, huge amounts of cash were needed. An IQD 25 note was the highest denomination available so to make life easier, the government introduced an IQD 250 note. After the American-led invasion in 2003, the Iraqi government issued even more notes with higher values. IQD 25,000 notes were now the highest value.

The average person on the Iraqi street said they would be happy to see the IQD stabilize further. But they are also afraid that the lopping off of zeroes will have a negative impact.

Baghdad merchant Abdul Amir trades in food products and when he deals with wholesalers he prefers to use US dollars because then he doesn’t have to carry as much paper around. “Large transactions require millions of Iraqi dinar. If I use foreign currency, I don’t need as much,” he explained. “But when it comes to daily transactions, I don’t mind using the dinar.”

As to his thoughts on the planned re-denomination, Amir had only questions: “Would there be a loss expected? Would the market be controlled to guarantee its stability?” he asked.

Government employee Sabah Daoud raised further questions: “Would the Iraqi dinar rise against the dollar? Would my salary be worth the same, with and without the zeroes?” He wanted to see more research on the impact of such a step on the average Iraqi citizen.

Currently the Iraqi government seems set on losing the extra zeroes, those digits that have become such a burden on the dinar. But the road toward this goal is a difficult one. And it is just one stop along an even longer road, the one leading toward prosperity and steady, stable economic growth for Iraq

http://www.niqash.org/content.php?contentTypeID=28&id=2826〈=0

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Well I see this as a very positive article. It is clearly stating that 1 dinar will hold the same value that 1000 dinar currently has which is .85

RV at .85..... : :D and I will take that all the way to the bank :wave: if I am right!

:woot::woot::woot:

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Ok 2 questions to this did Germany and Turkey have high inflation such as over 100% which Iraq is at 5.7% which if they did this isnt a prerequisite of what they want to do?

Also the guy who at one point had 10million dinar which at one point was worth $30million before Saddam was ousted now would have 10000 dinar worth only $30000 USD something really fishy so how they figure this issue out?

As they have claimed over and over that the GOI ministers would be seated every week and never followed threw 1000s of us believe this is how they are playing ball to cover there a$$e$ to hide a true RV! Logic tells many of us with all the debt forgiveness, us paying there war debt to Kuwait, all the poor families who lost sons and daughters on the battle fleld well deserve the RV, and other things to take into consideration such as misinformation, how Saleh lies about the CBI and why the auctions are low which is obvious that he made this up to hide the real reason, and for those people even out here paid by the govt to misinform so people jump ship, I believe in my heart of hearts you will see a nice RV rate and probably really soon! LOP will crush the world as its in enough trouble the way it is so as many of us believe to many govts and countries need this to be bigger then what many of the loppers expect! Personally its tough for me to agree with a LOP when we have a family banker who is pretty consistent with investments, 2 very good friends whom are govt officials that laughed at the thought of it remotely Lopping, and what we were told fraction banking will come into play to reduce some of the costs! The funny thing for me is if your in this investment to prosper why will someone come at me now and throw there arms up and beat me down that its going to LOP? Maybe your someone who is getting paid to misinform then again maybe your one who is stuck in the programmed nature from childhood "Whats to good to be true never happens"!! Think a little while as this gets close there will be a whole pile of crazy stuff to try and throw us off the band wagon! I am not buying it and I pray many of you hang in there to see this investment to fruition! God Bless and go RV!

pleasantvalleySunday thanks for the post just goes to show us something probably is close which I think the GOI has been working overtime yet misinform us that they arent which with all the violence and everything happening many of us are sure there is alot more done than is truly written since there govt owns the media, then again our govt owns our media and is why you never hear them bring up this investment or if it is brought up it is very minimal so others do not jump on board!

Edited by MarchMadnes
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Well I see this as a very positive article. It is clearly stating that 1 dinar will hold the same value that 1000 dinar currently has which is .85

RV at .85..... : :D and I will take that all the way to the bank :wave: if I am right!

:woot::woot::woot:

I sure don't understand how this is positive.. I see this as very very negitive. 1,000000 dinars will be exchanged at approx. $850.00 That will give me a big profit of about $100.00 dollars per million after holding them for 7 years. I'll wait and see how this plays out. I see plenty of smoke and mirrors and dis-information lately.

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I could see this going one of two ways, either one dinar will equal $0.85 or the value of one dinar will drop since all they did was rename a currency, so to speak, and not revalue that currency. So this could be good or bad. It could either mean we are rich, or it could mean we are all screwed.

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I sure don't understand how this is positive.. I see this as very very negitive. 1,000000 dinars will be exchanged at approx. $850.00 That will give me a big profit of about $100.00 dollars per million after holding them for 7 years. I'll wait and see how this plays out. I see plenty of smoke and mirrors and dis-information lately.

Well, look at this way....if 1 dinar will be worth .85 then 1 million dinar will be worth .85 x 1,000,000=$850,000

you are looking at it as the 1 million be worth the same as it is right now. That is not how I am seeing it. If you take 3 zeros from the 1,000,000 it becomes 1,000. The 1,000 would be worth what the 1 million is currently ($850.00) get it?

I am not saying I am right and I have any secret intel. All I am doing is reading through all the rest of the re-hashed BS in this article and concentrating on that one statement. It makes sense top me! ;)

We shall see. I think we all want the same thing so let's hope for the best! :woot:

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Ok this sounds to me like preRV smoke . Remember there not going to come straight out and say were going to Rv for so high , way out rate .. .any news about the change of rate is news in the right diraction.. Thanks PV.

Edited by nathan1606
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It is an opinions articles.... Could the real intention be lost within translation?

I think this propoganda.. ah I mean advertising is meant to potentially mislead us or misguide us. Remember, apparently even if Shabs knew, he couldn't inform us (That should indicate us right there). It would be a pretty big secret for those in the know..

So, what happens? We get a lot of speculative articles. -- If a LOP/RD was "clearly" in order.. I think Shabs would of informed us in detail the process.. Wouldn't you agree? 1k IQD = $0.85 becomes 1 IQD = $0.85...

Wouldn't be too hard to explain to a group of investors.. Unless he feared it would tarnish outside investors..... But with the amount of these articles surfacing & circulating must mean the ride to the end is really close.. IMO.

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----------------------------Anyone,,,who believes that,,,1000 of anything is the same as 1,,,IS A FOOL!!!!! I will make you a better deal,,,send me your $100 bills,,,and i`ll send you back $1 ,,,TRY THAT ON FOR SIZE -------------Tell Shabibi to send me all his US dollars and i`ll give him the same deal

Edited by leola
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I guess they are going to have to LOP before some believe it is possible.

If the CBI holds 50$B in cash-reserves

And a LoP makes 24-27T into 24-27B, than consider to multiply it by $0.85... That means their entire money supply in circulation is anywhere from 20-23 billion (in terms of USD value)

Now, with a majority held within the country, they would only need to cash-out those that send their IQD in for exchange. Basically speaking, the cash-reserves alone could handle double the value upon a LOP. Considering most IQD would not be cashed out as it would hold a higher value than the USD. They could easily triple the value after a lop. Hence, this is why some may believe a LOP followed by a RV is possible. this puts them at a high exchange rate in the $3 range. Meaning we basically double or triple our initial investment (maybe more for those invested longer)

This is how it would make sense for them to lop.... A plain & simple lop does not make sense to me. Poverty still exists, no additional purchasing powre, same amount of bills carried, confusion in different aspects, and also the feeling of lost wealth (again), all which may lead to increase civil unrest.

I think a LOP is possible, but only if it is followed by an increase in purchasing power. I believe they would wish to move away from the people using the dollar (a situation called dollarization).

If 1 USD still has a higher value of 1 IQD ($1 vs $0.85) even a lop may not entirely fix the issue as some may feel the dollar is more stable and a stronger value.

It would be a conservative approach to make their exchange rate more appealing.. But the CBI would lose out on the potential income it makes from the rise in value. (Money made from the spread as transactions occur from buying/selling)...

When compared to Turkey - they did it for accounting & banking purposes.. Less figurative #s to work with. (In other words, not too many zeros)... But these articles attempt to say it would make cash transactions easier and people would carry less $. In my opinion, not necessarily true. If an item costs 25k pre-lop & 25 iqd post-lop... It would still be 1 bill you need to use to purchase the item. And, I am sure it is not hard to figure out not to include 3 zeros based upon transactions.

If the RV is done correctly with the "right" introductive rate.. They could come out ahead in this scenario... The problem is, finding the perfect rate & the perfect time. Who would buy-in after a rv of $3+ dollars... Who would realistically sell at $0.01..... If for every IQD sold back to the CBI, a buyer is readily available to purchase that same amount of IQD.. The cash reserves are not affected as the CBI makes profit from the spread.

This would also mean they only have to introduce new lower denoms & not re-denominate the entire currency.

Make sense? A lop is more of a safe-bet, conservative approach, and more of a public image route imo.

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If the CBI holds 50$B in cash-reserves

And a LoP makes 24-27T into 24-27B, than consider to multiply it by $0.85... That means their entire money supply in circulation is anywhere from 20-23 billion (in terms of USD value)

Now, with a majority held within the country, they would only need to cash-out those that send their IQD in for exchange. Basically speaking, the cash-reserves alone could handle double the value upon a LOP. Considering most IQD would not be cashed out as it would hold a higher value than the USD. They could easily triple the value after a lop. Hence, this is why some may believe a LOP followed by a RV is possible. this puts them at a high exchange rate in the $3 range. Meaning we basically double or triple our initial investment (maybe more for those invested longer)

This is how it would make sense for them to lop.... A plain & simple lop does not make sense to me. Poverty still exists, no additional purchasing powre, same amount of bills carried, confusion in different aspects, and also the feeling of lost wealth (again), all which may lead to increase civil unrest.

I think a LOP is possible, but only if it is followed by an increase in purchasing power. I believe they would wish to move away from the people using the dollar (a situation called dollarization).

If 1 USD still has a higher value of 1 IQD ($1 vs $0.85) even a lop may not entirely fix the issue as some may feel the dollar is more stable and a stronger value.

It would be a conservative approach to make their exchange rate more appealing.. But the CBI would lose out on the potential income it makes from the rise in value. (Money made from the spread as transactions occur from buying/selling)...

When compared to Turkey - they did it for accounting & banking purposes.. Less figurative #s to work with. (In other words, not too many zeros)... But these articles attempt to say it would make cash transactions easier and people would carry less $. In my opinion, not necessarily true. If an item costs 25k pre-lop & 25 iqd post-lop... It would still be 1 bill you need to use to purchase the item. And, I am sure it is not hard to figure out not to include 3 zeros based upon transactions.

If the RV is done correctly with the "right" introductive rate.. They could come out ahead in this scenario... The problem is, finding the perfect rate & the perfect time. Who would buy-in after a rv of $3+ dollars... Who would realistically sell at $0.01..... If for every IQD sold back to the CBI, a buyer is readily available to purchase that same amount of IQD.. The cash reserves are not affected as the CBI makes profit from the spread.

This would also mean they only have to introduce new lower denoms & not re-denominate the entire currency.

Make sense? A lop is more of a safe-bet, conservative approach, and more of a public image route imo.

Agreeed. Once redenomination occurs the skys the limit for the IQD.

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The Iraqi government plans to chop three zeroes off the national currency. It should make transactions easier and enhance the exchange rate. But local economists are not sure the country is ready.

Recently the Iraqi government announced that they were close to completing plans for re-denomination. Three zeroes will be removed from Iraq’s currency, the Iraqi dinar or IQD, and old banknotes will gradually be phased out. For example, this would make an IQD 1,000 note into an IQD 1 note. Currently IQD 1,000 is worth around €0.60 and US$0.85.

Logically speaking, re-denomination does not change the value of a currency nor should it cause inflation. It should make currency easier to use and increase its credibility. Re-denomination may also be a matter of political expedience.

For example, when Turkey announced a re-denomination in 2005, the country’s central bank explained that extra zeroes on their banknotes meant “problems in accounting and statistical records, data processing software and payment systems”, adding that the move to cut them was “psychologically and technically essential”.

Re-denomination can usually only be undertaken once inflation is under control and over the last few years, inflation in Iraq has dropped from over 30 percent to single digits. Nonetheless Iraqi opinions about the planned change remain divided.

Qasim Jabbar, an economic researcher, is concerned about the psychological impact the removal of three zeroes will have on locals. Additionally Jabbar does not think the time is right. “We must create a stable environment in political, economic and legal terms, in order to control the conditions during the transition period to a new currency,” he explained. “This is necessary in order to ensure that the transition is not manipulated by government departments and in society in general, where there is rampant corruption.”

Jabbar was also worried about the absence of a central authority that was truly capable of controlling the Iraqi currency market. He believed that the psychological problem will be people “focusing on the change in numbers, rather than in real value”. By rights, re-denomination should not impact the actual value of a currency; it should still buy the same goods as it did before for the same prices. “But a person with IQD 10 million will feel they have lost a fortune when the zeros are removed,” he noted.

Re-denomination is nothing new. “Many countries, such as Turkey and Germany, have also taken this step,” another Iraqi economist Kareem al-Halfi said. “But this doesn’t mean that the Iraqi experience will be like that, of those nations. Iraq has serious structural problems and high rates of unemployment. These problems cannot be solved in the short term and we need to create the economic conditions necessary to allow re-denomination.”

According to Mothahhar Mohammed Saleh, an advisor to the Central Bank of Iraq, which was established in 2004 to administer monetary policy in Iraq, the impact of re-denomination could have both positive and negative effects.

Firstly, a reduction in the large amount of currency in circulation – there is an estimated IQD 27 trillion in circulation – could have a negative impact on everyday transactions, he said. For example, one previously recorded impact in other countries has included the rounding up (or down) of prices due to re-denomination.

On the other hand, the currency will become far easier to use. “In the wholesale sector, goods are being traded using US dollars.” This process is known as “dollarization” and occurs when a country uses a foreign currency, in parallel to or instead of, its own currency because it is seen as more stable and subject to fiscal disciplined.

Anyway, according to Saleh, “this change will not be introduced hastily. It will only be introduced when inflation is under control - and after parliament and the Iraqi cabinet has gone through legislation thoroughly. They will then decide how the [re-denomination] law will be implemented.”

As Saleh said, “the Central Bank is proceeding cautiously in this matter because it realizes re-denomination could cause economic problems if implemented in haste.”

The IQD was first introduced in the early 1930s and was pegged first to the British pound, then the US dollar. After Iraq’s invasion of Kuwait, under the leadership of Saddam Hussein, strict economic sanctions saw the value of the IQD drop. By the mid-1990s, IQD 3,000 was worth around one US dollar.

In order to make purchases in Iraq, huge amounts of cash were needed. An IQD 25 note was the highest denomination available so to make life easier, the government introduced an IQD 250 note. After the American-led invasion in 2003, the Iraqi government issued even more notes with higher values. IQD 25,000 notes were now the highest value.

The average person on the Iraqi street said they would be happy to see the IQD stabilize further. But they are also afraid that the lopping off of zeroes will have a negative impact.

Baghdad merchant Abdul Amir trades in food products and when he deals with wholesalers he prefers to use US dollars because then he doesn’t have to carry as much paper around. “Large transactions require millions of Iraqi dinar. If I use foreign currency, I don’t need as much,” he explained. “But when it comes to daily transactions, I don’t mind using the dinar.”

As to his thoughts on the planned re-denomination, Amir had only questions: “Would there be a loss expected? Would the market be controlled to guarantee its stability?” he asked.

Government employee Sabah Daoud raised further questions: “Would the Iraqi dinar rise against the dollar? Would my salary be worth the same, with and without the zeroes?” He wanted to see more research on the impact of such a step on the average Iraqi citizen.

Currently the Iraqi government seems set on losing the extra zeroes, those digits that have become such a burden on the dinar. But the road toward this goal is a difficult one. And it is just one stop along an even longer road, the one leading toward prosperity and steady, stable economic growth for Iraq

http://www.niqash.org/content.php?contentTypeID=28&id=2826〈=0

Ty PVS for the article, without them retrieving the currency in Iraq(large bill) there can be no RV....the value of the larger bill must be added to the smaller bill to RV....remember this is for Iraq only...you still have the large bills.......just saying.. :lol: :lol:

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question: if they remove 3 os and IF it makes the 25k note worth $25USD (which is basically its current worth) and the lower denoms do the same (25, = 0.025 and so on) how is this good for the citizens of Iraq? How would a move like that INCREASE purchasing power? It wouldn't, it would be an economical nightmare! Unrest would blow up over there.

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If the CBI holds 50$B in cash-reserves

And a LoP makes 24-27T into 24-27B, than consider to multiply it by $0.85... That means their entire money supply in circulation is anywhere from 20-23 billion (in terms of USD value)

Now, with a majority held within the country, they would only need to cash-out those that send their IQD in for exchange. Basically speaking, the cash-reserves alone could handle double the value upon a LOP. Considering most IQD would not be cashed out as it would hold a higher value than the USD. They could easily triple the value after a lop. Hence, this is why some may believe a LOP followed by a RV is possible. this puts them at a high exchange rate in the $3 range. Meaning we basically double or triple our initial investment (maybe more for those invested longer)

This is how it would make sense for them to lop.... A plain & simple lop does not make sense to me. Poverty still exists, no additional purchasing powre, same amount of bills carried, confusion in different aspects, and also the feeling of lost wealth (again), all which may lead to increase civil unrest.

I think a LOP is possible, but only if it is followed by an increase in purchasing power. I believe they would wish to move away from the people using the dollar (a situation called dollarization).

If 1 USD still has a higher value of 1 IQD ($1 vs $0.85) even a lop may not entirely fix the issue as some may feel the dollar is more stable and a stronger value.

It would be a conservative approach to make their exchange rate more appealing.. But the CBI would lose out on the potential income it makes from the rise in value. (Money made from the spread as transactions occur from buying/selling)...

When compared to Turkey - they did it for accounting & banking purposes.. Less figurative #s to work with. (In other words, not too many zeros)... But these articles attempt to say it would make cash transactions easier and people would carry less $. In my opinion, not necessarily true. If an item costs 25k pre-lop & 25 iqd post-lop... It would still be 1 bill you need to use to purchase the item. And, I am sure it is not hard to figure out not to include 3 zeros based upon transactions.

If the RV is done correctly with the "right" introductive rate.. They could come out ahead in this scenario... The problem is, finding the perfect rate & the perfect time. Who would buy-in after a rv of $3+ dollars... Who would realistically sell at $0.01..... If for every IQD sold back to the CBI, a buyer is readily available to purchase that same amount of IQD.. The cash reserves are not affected as the CBI makes profit from the spread.

This would also mean they only have to introduce new lower denoms & not re-denominate the entire currency.

Make sense? A lop is more of a safe-bet, conservative approach, and more of a public image route imo.

Here is what you forgot this picture is way bigger then Iraq and Iraq really is like a puppet in this which the world powers with all the funds spent over the years to help Iraq will never allow a LOP unless major corruption is involved! Now Turkey and Germany did they have the same scenario as Iraq in terms of the war, oil, the help from other countries such as all our country spent to help and fix debt forgiveness! Unless all the other countries involved are 100% corrupt with some strange agenda you will not see a LOP! Remember everyone this picture is way bigger then Iraq since the RV will fix budgets, financial issues here, and fix many major issues worldwide which is why Iraq is the puppet and the master behind it is the world governments pulling the strings! I bet all my dinar on it that our country alone (USA) will not allow a LOP due to our issues alone! This plan is bigger then any of the RVs in history and to believe this will LOP in such a historic event to me is insane due to everything riding on this!

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not to mention that to decrease the worth of the current notes (the notes that we are currently holding) would (at least the way some people are describing a "LOP") cause people to need to carry more paper to purchase items, Not less. some are claiming that they plan to remove the 000s as in 25k becomes 25 and 25 becomes .025 ect... the people would have to carry alot more meaning they would have to print more for people to carry around. would not make sense to me.

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not to mention that to decrease the worth of the current notes (the notes that we are currently holding) would (at least the way some people are describing a "LOP") cause people to need to carry more paper to purchase items, Not less. some are claiming that they plan to remove the 000s as in 25k becomes 25 and 25 becomes .025 ect... the people would have to carry alot more meaning they would have to print more for people to carry around. would not make sense to me.

It will not devalue anything. The value will remain the same. The 25 note will not be .25 it will be 25. They wont need more notes to carry. Prices will be adjusted. Man I sound like a broken record.

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It will not devalue anything. The value will remain the same. The 25 note will not be .25 it will be 25. They wont need more notes to carry. Prices will be adjusted. Man I sound like a broken record.

so if the rv at 1IQD = 1USD then my 25K IQD will = 25K USD right.

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not to mention that to decrease the worth of the current notes (the notes that we are currently holding) would (at least the way some people are describing a "LOP") cause people to need to carry more paper to purchase items, Not less. some are claiming that they plan to remove the 000s as in 25k becomes 25 and 25 becomes .025 ect... the people would have to carry alot more meaning they would have to print more for people to carry around. would not make sense to me.

I think your viewing it wrong.

Say your going to buy something that is 100,000 IQD... It takes you 4 notes of 25,000 IQD to make that purchase

Okay, so they lop/rd and everything is affected appropriately. The same 100,000 IQD item is not 100 IQD. It'll basically have two prices

100,000 IQD for Pre-LOP IQD

100 IQD for Post-LOP IQD

You would need 4 25,000 IQD notes to buy at pre-lop value

You would need 4 25 IQD notes to buy at post-lop value

Value you pay would be dependent upon which IQD you have. The newly re-denominated value or the old?

Maybe you carry 2-25 new-IQDs & 2-25,000 old-IQDs. You could still buy that item.

But here is the problem, it would cause some confusion... You still carry 4 bills to make that purchase. Now you have to use two seperate sets of denoms.

Not to mention from what I have read some still prefer the use of the dollar for it's value & stability.

Now, we have basically 3 currencies within a country. The dollar holds the highest value.

An old IQD set of denoms everyone is used to seeing

A new set of IQD denoms that are new to everyone.

No way that would be an easy transition. Some would be left confused, some would have the sense of their wealth removed, and some may say heck with it all. I'm just going to use the dollar.

I don't see what goal they reach here in a short-term manner as they don't fix dollarization, citizens still carry same amount of bills (Maybe even more), the mathematical standpoint may cause even more confusion.

Pros? A higher exchange rate representing a stronger value to the public eye outside the country.

Maybe simpler transactions within the banking industry... Not many calculators go into trillions ::P:

But all at a cost to the CBI & no change in purchasing power.

HMMMmmmmm...

We sit & wait & see how this all turns out. :)

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