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Iraq Currency Re-Done After Parliament Sign Off


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This is how I see it: The IQD has already been re-valued on the street in Iraq by 100%.

Quite positive!

I went to the site listed on this post and found this paragraph:

Here’s an interesting tidbit. What most people do not know, but for the longest time, Iraqi merchants have already removed three zeros from prices of their goods inside their stores. For example, a can of coke in Iraq will cost you approximately 500 dinar. They now remove the two zero’s and the selling price is .50 usd. However, If you give an Iraqi merchant a $ 1.00 usd the Iraqi merchant will not give you back any change. They will keep your one dollar for the purchase of the can of coke. That’s just a policy they’ve seemed to be doing for awhile now.

So . . .

A can of coke goes for 500 IQD or 50 cents US (about 50 cents to buy 500 IQD, right?).

But they are selling the coke for $1, since they don't offer the 50 cents change. Hence, the coke = 500 IQD = one dollar!

That's an on the street RV of 100%.

Thank you for this positive post!

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I have read the pro's and cons about what A.C. writes, but I wonder if someone can confirm what he stated about the Iraqi merchants are already practicing:

"...Here’s an interesting tidbit. What most people do not know, but for the longest time, Iraqi merchants have already removed three zeros from prices of their goods inside their stores. For example, a can of coke in Iraq will cost you approximately 500 dinar. They now remove the two zero’s and the selling price is .50 usd. However, If you give an Iraqi merchant a $ 1.00 usd the Iraqi merchant will not give you back any change. They will keep your one dollar for the purchase of the can of coke. That’s just a policy they’ve seemed to be doing for awhile now..."

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This is how I see it: The IQD has already been re-valued on the street in Iraq by 100%.

Quite positive!

I went to the site listed on this post and found this paragraph:

Here’s an interesting tidbit. What most people do not know, but for the longest time, Iraqi merchants have already removed three zeros from prices of their goods inside their stores. For example, a can of coke in Iraq will cost you approximately 500 dinar. They now remove the two zero’s and the selling price is .50 usd. However, If you give an Iraqi merchant a $ 1.00 usd the Iraqi merchant will not give you back any change. They will keep your one dollar for the purchase of the can of coke. That’s just a policy they’ve seemed to be doing for awhile now.

So . . .

A can of coke goes for 500 IQD or 50 cents US (about 50 cents to buy 500 IQD, right?).

But they are selling the coke for $1, since they don't offer the 50 cents change. Hence, the coke = 500 IQD = one dollar!

That's an on the street RV of 100%.

Thank you for this positive post!

They state the selling price is only 50 cents (USD)....so its actually pretty close to the actual exchange rate of 1170.....500 dinar = 50 cents so 1000 dinar =1....pretty close to the 1170....

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This is definitely one I disagree with.... :rolleyes: :rolleyes: :rolleyes:

"In other news, a Central Bank of Iraq spokesperson, Mohammed Saleh stated in an

article from the Alsumaria News that the project of removing the three zero’s is very close to being complete. The Central Banks plan will be reviewed by the Council of Ministries and then voted on by the Iraqi Parliament. After all this transpires, the Iraqi citizens will be educated about the new currency and it’s process of distribution. It is important to note that this re-denomination will have no effect on the purchasing power of the Iraqi dinar. This is not a LOP and definitely NOT the RV that everyone has been speculating about and watching for the last eight years. Do not misconstrue this as any form of my being negative, I am simply putting forth the facts and explaining it how it has been made to all of us here as also reported in the news."

He says its a re-denomination but its not a LOP or an RV. What would be the purpose of this? A re-denomination has to be part of a plan to do one or the other and in order to re-denominate ie introducing lower denominations, they need to have the reserves in place to give the currency the proper value to support those lower denominations purchasing power or they have to make a change to their islamic banking practice of backing their currency 100%.

Maybe he's still talking about the 100,000 bill? <_<

----

A straight LOP of removing three zeros wouldn't do anything for the people. At first some will be excited about the new currency but after they realize what it can do as in the purchasing power, the excitement will quickly fade and those IRaqi's holding millions will be upset that they are only worth thousands just like us. And then there is the cost for coming out with new money.....How much will that cost??? The Iraqi's have brought all of these points up in recent zero articles....

Now an RV to anything approaching a dollar, not going to happen with the monetary policy in place. You have billions of dollars backing trillions of dinars. Your a 1000% away hence the exchange rate we have of 1170 dinar to 1 us dollar!! No, fractional banking will not get you there from this position....even if they could RV by changing the monetary policy, they would put a target on every Iraqi's back that's holding 25,000 notes. Its not hard to imagine a country like Iraq where a right of passage for young men is to own a gun that gangs would form and rob citizens left and right. From our perspective which is not the Iraqi perspective, its easy to not think of this...

So for me I'm left with either a LOP and then RV that can be easily done considering they are reducing their M2 and....if they change their islamic banking practice/policy of backing the currency 100%...1 dinar could equal $2-$3.00

or

Appreciation (Long Term) - Consider that this is all they have done with the NID since its inception. All the bad things Sadam did with the currency was not forgotten and was carried over to the New Iraqi Dinar and they the cbi have fought to bring it where its at and combat the inflation which is where we are at today. Since this has been done I don't consider this extraordinary to expect that they will continue this trend and allow it to appreciate again since they are reducing their M2 and they continue to strengthen their reserves. However, I acknowledge to do it this way is a hard road to travel but it could be done if they remove large denoms and introduce small denoms as they become relavant at the same time the private sector kicks in and more oil begins to flow....

I definitely believe they are at a crossroads with this currency but AC didn't provide too much info and that whole coke story is something for tourists....just a bone he's tossing us. In fact that whole scenario could be subjective...maybe its only one shop owner, maybe its only the food court in the airport, maybe its .....phooey! :lol:

Don't read too much into AC, always do your own research and pay more attention to the news. Not once has AC ever tackled information provided by Scooter and other members in regards to the IMF, UN, US etc etc...

Peace...

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This is how I see it: The IQD has already been re-valued on the street in Iraq by 100%.

Quite positive!

I went to the site listed on this post and found this paragraph:

Here’s an interesting tidbit. What most people do not know, but for the longest time, Iraqi merchants have already removed three zeros from prices of their goods inside their stores. For example, a can of coke in Iraq will cost you approximately 500 dinar. They now remove the two zero’s and the selling price is .50 usd. However, If you give an Iraqi merchant a $ 1.00 usd the Iraqi merchant will not give you back any change. They will keep your one dollar for the purchase of the can of coke. That’s just a policy they’ve seemed to be doing for awhile now.

So . . .

A can of coke goes for 500 IQD or 50 cents US (about 50 cents to buy 500 IQD, right?).

But they are selling the coke for $1, since they don't offer the 50 cents change. Hence, the coke = 500 IQD = one dollar!

That's an on the street RV of 100%.

Thank you for this positive post!

I don't think so. It's only 100% increase if you're buying a coke or something else worth $.50, and that will only be the case until the lower denominations are introduced. If you're buying a TV set for $199.50 they probably won't give you the $.50 in change either, but that's not a 100% increase.

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Your right about possibly not being able to hold onto them forever buuuutttt they have mentioned letting the two bills co-exist for sometime so IF thats the case, maybe just maybe we would get lucky and be able to hold out until the dinar appreciates a bit but on another note, the idea of the ISX is def great.....Thats what I planned on doing with any profit made off this investment because it is a good time to jump into their stock market with it being so young and undeveloped.....sure fire way to make some money off Iraq laugh.gif

Well, you would also have to consider the amount of people in the world who are invested into the IQD who may go the same route upon a R/D.

You gotta jump in before anyone else does if you want to hit some nice returns. If you are sitting around waiting to see if the value goes up upon a R/D, than, you may lose out on an opportunity.

I'd rather consider the risk & jump in and hope for better returns than to wait out a value increase of the dinar than jump into the ISX.

Why? Because, consider this... As the value goes up... So does your ISX investment.. If the value of your stock stays the same, but, the value of the dinar goes up.. You still come out ahead. So, remember to consider that. :)

Its one of the reason(s) I would prefer the ride of the R/V or R/D to come to an end, so I can look into the ISX and just hope to find something to invest in. Maybe I would be able to walk away 10x's my original investment instead of breaking even.

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Sorry guys, we can't extrapolate the exchange rate based off the price given to a coke from this guy.

Think of it this way, if 2 cokes in Iraq equal US 1.00 which equals 1170 IQD or 585 IQD per coke. (1170 divide by 2)

But, they move the decimal 3 places to the left, 1170 IQD becomes 1.170 IQD for 2 cokes with no RV that would be 1 USD equals 1.170 IQD in country,

So, if an Iraqi had 1,000,000 IQD in his bank account before they move the decimal 3 places to the left in country, he could buy 1709 cokes with that bank acct., (1,000,000 IQD divided by 585 IQD = 1709 cokes) after they move the decimal 3 places to the left (1,000,000 IQD becomes 1,000 IQD divided by 0.585 IQD = 1709 cokes) same purchasing power for them.

But, now if the LOP applies to us with no RV, you had 1,000,000 IQD worth $854.70 (1,000,000 x 0.0008547) that is now 1,000 IQD worth $0.8547 at current exchange rate. (1,000 x 0.0008547 = $0.8547. Which would buy you 1,000 IQD (0.8547 divided by 0.0008547 = 1,000 IQD) which in turn would buy you 1709 cokes in Iraq.

I can't believe this guy's info. How can you buy 1709 cokes on 0.8547 U.S. cents?

They have to RV, how much traveling can an Iraqi do in the world on 0.8547 U.S. cents?

I hope this makes sense, it's late and I'm falling asleep at the key board. <_< zzzzzzzzzzzzz

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currently $1 = approx 1165 IQD , if they took took away three zeros , then does it follow that $1 = 1.165 USD . isnt that a kind of defacto RV? ( well it could be depends on whether they allow the larger denoms at par whilst they are cashed in and removed from circulation. If not it could be a big difference whether you are holding a 10,000 dinar not or 200 x 50 dinar notes and so on . Just putting it out there

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currently $1 = approx 1165 IQD , if they took took away three zeros , then does it follow that $1 = 1.165 USD . isnt that a kind of defacto RV? ( well it could be depends on whether they allow the larger denoms at par whilst they are cashed in and removed from circulation. If not it could be a big difference whether you are holding a 10,000 dinar not or 200 x 50 dinar notes and so on . Just putting it out there

True. This was my point in an earlier post. It doesn't make sense to us that hold the currency that a LOP is actually a RV. Right now the USD is worth 1000 times more than the IQD. After a LOP the USD and the IQD are worth basically the same so really they could RV that way and we don't make any money. A.C. seems to be saying in this article that this is what will happen. A redenomination without an increase in purchasing power. In other words the exchange rate will not be move above the USD. I would think that if they do RD that they would go ahead and move the exchange rate to at least 2.00 or maybe 3.00. The only reason that I think they might come to par with the USD first is to then watch inflation before revisiting the exchange rate. After all those were pretty much Shabs exact words when asked about a revaluation. The thing is he was asked about a revaluation before he was asked about a redenomination so he gave the answer to the revaluation before adressing the redenomination but the answer to the revaluation was post redenomination. HAHA :D WOW. Anyway thats the way it seems.

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