Iraq Dinar Redenomination

[Quart]

http://www.rferl.org/content/Iraq_Planning_Currency_Redenomination/1950504.html

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Both will be legal tender in Iraq until the old notes are completely withdrawn.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

[jmcsh49890]

I don't know what to say, I have waited for over five years and if they are going to do what it sounds like, it's just to bad for everyone.

[Quart]

I wouldn't be too hasty to read bad news into this. It may actually be the very news we've waited for.

[dwise68]

Sounds like the plan is to do this gradually throughout the year with the final phase out planned for the end of the year. If they RV / RI anytime soon then they will definitely get a bid influx of those larger denominations that they are planning on phasing out when holders cash in. The pivotal part of that being "IF" they RV / RI coming up soon!!!

[lacoquiPR]

I think yhis is a good notice for our invest.

[sana]

Quart, regardless of whether this is good or bad news for us all... It is Real news from a REAL legit source. Good work!! I personally want to upgrade you to a full gallon

[mamalu]

Not a good sign for us.

Edited February 6, 2010 by mamalu
fixed

[Quart]

thanks, sana!

[lancer22]

Not a good sign for us.

Why would you say this is bad news? Read it again. This is basically a confirmation of a revaluation not a bunny-ear. Do your homework. This along with Adams, Sonny1 and Dinarded's info of late is reason to skip around naked!

wahooo its almost upon us.....

[Orleanian]

This is great news. Iraq might as well have said the RV is done, IMO

[kaperoni]

they will rv first, then gradually take them big notes out with small demons. dont worry.

[iluvdinar!]

I agree with QUART and Orleanian. I think this is good news for us either way. Phasing out the larger bills is what we've known they would have to do eventually, but only if the smaller ones had value.... so this means RV RV RV RV!

[Ladywarrior]

"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."... Ok, now, if the dinar was to retain it's presentvalue, and they make smaller denoms, then this statement would be a lie... It would make it harder to carry cash. However, if the dinar is going to increase in value, and now that soda cost 1 IQD instead og 1,000 IQD, then it makes sense , because you're going to be carrying 999 IQD in change in your pocket if you pay for that soda with a 1,000 bill.

[shooter21]

I hope it's good news!

[jim eryl]

I am not sure about what this means but, does this mean my 25ooo notes are worth what?

[jim eryl]

this does not read well

[jim eryl]

If they take off the OOO is this a big loss for dinar holders

[jim eryl]

Yo have said a month full just waiting for an RV

[jenisamom]

so is this good or bad

at first i wanted only larger notes

and now maybe i need to purchase smaller ones

???

[THOR]

I see it as good news all it means is that when you cash in your $25k you will get credited for $25k and then those large notes will be taken out of circulation and held by the treasury of each country to use in perhaps large trade transactions and then smaller notes introduced in to the public arena for all to use on a daily basis. I believe our $25k will still be worth $25k irrespective.

[calibama]

2/7 is my birthday...I never did get a pony - so, I hope I get an RV!!!!!!!!!!!!!! LOL

[BurntToast]

I just posted this on another string. For sake of argument lets say a loaf of bread in Irag costs 5000 IDQ, or $5 USD. No lets say there are the two IDQ circulating at the same time, a $5000 IDQ and a 5 IDQ. That loaf of bread would have to have two prices on it, 5000 IDQ and 5 IDQ. Once the 5000 note is out of circulation, the vender simply takes off loaf of bread the higher noted price, in effect lopping off three zeroes. A 5 IDQ is now 5 USD, a wash. The pricing (not the value) of the goods being purchased have to be changed also, i.e., revalued. This line of reasoning tells me that the 5 IDQ that is replacing the 5000 IDQ is the RV. Please, debunk my reasoning. I want to be wrong.

[TIM]

i luv dinar, your a pretty dinar girl, just tought id tell ya, not hittin on ya but god made ya well! im to old anyway!

[THOR]

burnt toast they are changing the notes not the value 5000 IQD will equal 1000 of the 5 IQD notes another article said bank tellers have piles of small note cash at the ready to change the large notes into small notes so IMO we will not loose any value of the IQD but we need to change the big notes for the equivilent value but in small note denominations.

JMO

[machcobra]

Sounds to me like this was made up, why is this news not on any of the other sites?