Dinar News Iraq Planning Currency Redenomination

[jeff stevens]

I did not see the word lop.

[cococrm]

I am just patiently waiting, with all my hopes looked over, written down, justified, and,,, Helping family & Friends!!!

[sonny1]

5) Really, Redenomination doesn't make the Ghanaian currency stronger?

Ans: NOPE! The strength of a currency is determined by the market factors, ie demand and supply for the currency. Since the purchasing power of the currency remains unchanged after redenomination, we should not expect demand for GHC to change. Similarly, redenomination doesn't give the monetary authorities any justification to change the supply of money.

Redenomination of currency is nothing but a recalibration and a change of name of the currency. This by no means imply the appreciation or depreciation of the currency.It's important that we don't mistake redenomination with appreciation of a currency. We would have an appreciation if we instead have 1 Cedi (AND NOT 1 GHC) = 1 dollar. The cedi and GHC, like identical twins, are separate currencies!!!

http://ghanaconscious.ghanathink.org/node/437

Even though this talks specifically about the currency in Ghana, the principles still apply, especially since Iraq is not in hyperinflation. The purchasing power remains unchanged. JMO

a couple of differences though, first iraq has oil on the surface, second we didnt save ghana we saved iraq

[Jewel]

Good news?? bad news?? lop?? Propaganda?? who knows i wish i was an economist that spoke arabic to read the squiggly version. lol

[wishfulthinking]

I'm so confused and a little doubtful! What I see is that they will revaluate maybe 1.49 or the previous rate of 3. something and at the same time take the 3zeros out of the currency. I had seen a report of them stating that they would give a few months for the exchange of 3zeros currency. They are stating that the 3zeros currency will be the same value as the new lower denoms. IMO those 3zeroes currencies will be nulled at the same time of the revaluation. So I don't see our gains being as much as we had hoped. Please someone make me change my view!!!!

[iraqivet44]

Good news but not set in stone yet

[judydinar]

Let's pray that the RV/RI happens real soon!

[roxbutterfly]

http://www.rferl.org/content/Iraq_Pl...n/1950504.html <---is this the only site that has reported this? I checked aswat al iraq and didnt see anything mentioned there...is this news site legit? just wondering..id hate to get excited about this and its just a bogus site...thanks

[supersoul]

This is just my opinion, but I don't see if I take a $25,000 dinar note to the bank that they could tell me it's a $25 note. No, I see them recognizing the worth of the note's face value and then removing it from circulation. But who knows? I'm a "glass half-full" thinker.

[kjurb]

let's all hope this is the light at the end of the tunnel!

[deacon]

Thanks for the information but the question still stand when.

[Dave321]

How can they make everyone in Iraq, and all of the dinar investors instant millionairs? Gotta be lop/reval. Nice to be wrong....but

[BR549]

That would seem logical. If they remove three zeros then RV we're still further ahead than we were to begin with and personally, I'm thankful.

[dizzylamb]

today, I bought some more Dinars from my bank...I was told they can sell and buy Dinars but on the computer screen it said that we could not take it out of the country....she coudn't understand why......I'm here in the UK

[hunter1]

I am confused is this a good thing or a bad thing? I understand that either way we can trade in and make money. But are we leaning toward making a little money or a lot of money after this announcement? Any answers appreciated!

[Enorrste]

News / From Our Bureaus

Iraq Planning Currency Redenomination

Iraqi dinars are stacked at a teller's window in a Najaf bank.

February 06, 2010

BAGHDAD -- The Iraqi Central Bank is planning to redenominate the national currency in an effort to ease transactions and allow people to carry less paper money, RFE/RL's Radio Free Iraq (RFI) reports.

Mudhhir Muhammad Salih, a member of a Central Bank advisory panel, told RFI that a plan has been made to remove three zeros from the currency and phase out the current banknotes late this year.

Salih said by the end of 2010 the new banknotes will be fully introduced while the old banknotes will be gradually removed from circulation. He did not specify when the new notes would be issued.

Both will be legal tender in Iraq until the old notes are completely withdrawn.

Iraqi officials have had a long-running plan to redenominate the Iraqi dinar. In 2006, the Finance Ministry recommended to the Central Bank that it carry out such a plan.

Salih pointed out that banks are having a hard time accepting cash savings and deposits, but by dropping the zeros it will make it easier for both the banks to deal with their customers and for the general public to carry money. He said some 80 percent of Iraq's money supply is cash in circulation.

Salih added that in 1990 the value of banknotes in circulation was about 25 billion Iraqi dinars but is currently some 25 trillion dinars.

Economic analyst Hilal al-Tahhan told RFI that the bank's move is overdue. He said he expects the currency change to go smoothly because of the decision to allow both the old and new banknotes to coexist, leading to less turbulence in the economy.

The current exchange rate is 1,167 Iraqi dinars to the U.S. dollar.

It amazed me that people can read the news article and come away with such widely variant views.

There is an old saying in Biblical exegesis that applies clearly here as well: “If the plain sense makes sense, don’t look for any other sense.”Let us now apply that standard to the article posted today.

Here are the points made in the article, summarized:

(1) a redonimation of the currency

(2) this being done to ease transactions and allow people to carry less money.

(3) there is a plan to elminate 3 zeros from the currency

(4) the currency with 3 zeros (current banknotes) will be phased out late this year.

(5) new banknotes will be introduced sometime before the end of the year

(6) the old (large denom) banknotes will be gradually removed from circulation

(7) they did not specify when the new notes would be issued.

(8) both large and small (or old and new) banknotes will remain legal tender during this process until all large denom notes are removed

Now we are ready to analyse these points and determine what the “plain sense” is from them.

Here is a summary of what these notes say, and do not say.

Iraq has announced that sometime during the next several months but before the end of this year all large denomination notes will be removed from their currency. In their place will be smaller denomination notes. The purpose for doing this is to make it easier for the people to do transactions and for them to carry LESS money. Both will remain legal tender throughout this process, so there is no lop, period. If there were to be a lop, one currency would become void and would be replaced with the other. Instead, the large denominations will be phased out over the next several months but will remain legal tender. In order for stated purpose number 2 above to work, there MUST be a revaluation of the IQD. This is the plain sense of statement number 2. If there were not a revaluation, then the people would be carrying MORE money, not less!

Therefore we see that the RV has now been announced publically and that it will occur shortly. Iraq has furthermore stated that it is ready for this move now and is prepared to draw in the large denomination notes over up to 10 months. THEREFORE, there will not be a short 30 to 45 day “cashin” period as has been rumored in the past. The cashin period will take place naturally as people realize that holding large denomination notes is awkward in the normal course of daily business. Incidentally, from the first line of the article we now know that the smaller denomination notes already exist.

In order for this process to take place naturally it makes sense to start it as soon as possible. The more time that is allowed for the transition to take place the easier it will be. Therefore, we should see the RV announcement within the next few days.

The bottom line is this, folks: this is the big event we have been waiting for. It has now been clearly stated that it will occur, roughly when it will occur, and how the transition will be handled. We have everything here but the rate, and I suspect we will get that within just a few days as well, when the RV announcement is made.

This is all consistent with the analyis made in my book and follows exactly as I determined that it would. I’m not tooting my horn. I’m just trying to show that “if the plain sense makes sense we need not look for any other sense.”

Next, I believe we will see in short order that the removal from Chapter 7 has been approved and will occur either just prior to the announcement, simultaneous with the announcement, or just after the announcement of the RV. It will be shown that Maliki used the RV as a bargaining chip to excelerate the release from Chapter 7.

Finally, as we have speculated, with reason, the initial rate will probably be about $1.50 and will remain locked or on a managed float until the end of the year. After that time it will float, in my opinion, and rise over the next 1 to 3 years to $3.50 or more. Since Iraq will be a free country during this process I foresee it occuring more quickly than slowly and recommend that all of us consider holding on to IQD in the new smaller denominations in order to maximize the gain (roughly 300%) in the foreseeable future.

Steve

[RaymondBoutte]

Please someone explain to me, taking 3 zeros off my $25,000 note, does that make it's worth $25.00

[Soldier]

Please explain how removing 3 zero's is a RV. Thanks,

[User Name]

I love your hermeneutics. Can't disagree with your interpretation. The only problem is, if they are in essence announcoing an RV of significant appreciation, there will be a huge run this next week of those purchasing the Iraqi Dinar. Seems too obvious, but, again, I can't disagree with your interpretation.

[kingjaffi]

Please someone explain to me, taking 3 zeros off my $25,000 note, does that make it's worth $25.00

No, it just means that 3 zeros have been taking off. Your purchasing power remains the same.

[Enorrste]

That is exactly why the announcement of the RV will be made almost immediately.

[User Name]

Enorrste, that makes sense. I would think revaulation would be tomorrow before business opens up on Monday. That assumes the news release is legit. Has anybody seen it any where else?

[Recceguy]

ARE YOU GUYS KIDDING ME.Cant you see that your currency will be woth SQUAT.My 7000000 is now 7000.What is there to be happy about.Wake up,we are getting screwed by Iraq.

[Knuckles]

Well, you may be right. However, they cover mushrooms with the same and they grow!

[Lonnie]

I for one will be keeping a closer eye now....I just hope it's not another cry of wolf.