Read the whole article please

[Grumpy]

Iraq Planning Currency Redenomination

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.

Please read the rest of this article and not get hung up here

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.

Concentrate on the word gradually, a lop would happen instantly

Both will be legal tender in Iraq until the old notes are completely withdrawn.

A lop would make the larger bills obsolete overnight

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.

if you think about this, lets say a loaf of bread cost 10k dinar at this time. After RV this same loaf of bread my be $5, now you try and keep enough change on hand to change in a 25k note.

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.

Again if there was to be a lop, the currency would NOT be aloud to co-exist

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

http://www.rferl.org/content/Iraq_Pl...n/1950504.html

Ok my .02, have fun debating it here and try to free up the chatroom for awhile!

P.S. this is the best news we have heard in a long time, please don't look a gift horse in the mouth

Edited February 7, 2010 by grumpy

[NineLives]

This is an article released Aug/2008

Iraq central bank takes steps to ‘rebase dinar’

BAGHDAD: The Central Bank of Iraq has taken steps to rebase the Iraqi dinar and issue new banknotes, a senior official at the bank has said.

“We have reached a conclusion that we should take off three zeroes from the current Iraqi dinar banknotes,” Mudher Qasim, the bank’s senior advisor, told Dow Jones Newswires in an exclusive interview.

“The process is progressing and we have taken some steps,” Qasim said. “We will issue a decision in due time.” Qasim didn’t give a timeframe when that decision would be taken, but said printing new banknotes and fully replacing old notes would take two years from the time the decision is taken.

Iraqi Finance Minister Bayan Jabor said his ministry had suggested to the central bank to take off three zeroes from the current Iraqi dinar banknotes. “The Central Bank governor (Sinan Al-Shabibi) has informed me that the bank is in the process of taking that decision,” Jabor told the state-run Al-Iraqia Satellite Channel this week.

“The Central Bank of Iraq supports what the finance minister was saying,” Qasim said.

If the rebase decision is taken, it means a current 25,000 Iraqi dinar banknote will become 25 dinars, for example. When three zeroes are knocked off the Iraqi dinar, a dollar will equal only 1.20 dinars. Currency rebasings are usually monetarily neutral and are introduced to make commercial calculations and cash dealing easier and cheaper. Turkey knocked six zeroes off its lira currency January 1, 2005, for example. Russia did the same for its currency. “In a country like Iraq where cash consists 80% of money dealing, we need smaller bank notes,” Qasim said, adding that current Iraqi banknotes were difficult to store and need strict security measures when moving money from one place to another.

There are now some 20tn Iraqi dinar banknotes in use in the market, which is a very big amount and if Iraq knocked 3 zeroes it would become 20bn dinars which is a reasonable amount, he said.

Qasim also said one of the reasons for rebasing the Iraqi dinar is because the bank has managed to reduce the country’s high rates of inflation. The inflation rate fell to 14.7% in May this year from a record high of 60% in late 2006. In July 2004, the now dissolved US civilian authority in Iraq decided to print the current Iraqi banknotes replacing those used to bear the picture of the former Iraqi leader Saddam Hussein. Iraqis then had three months to swap their old dinars with the new ones.

“This time we aren’t in hurry, if it takes two years to swap the new currency with the old one, then let it so,” Qasim said.

[Traconesu02]

Good Analyzing hopefully this will calm the savage beast.

Thanks!

[dadox]

I do not see why not, to have for a vile old 25,000 note and new 25 note dinar, with the same value, in that case and if we use the euro rate of 1.40, the value of 25,000 and 25 will be prox. $35.00, in that case the can have coexistence of the both notes and slowly

start removing the notes with the zeros. Well if this is the case, we are not going to be rich, and this is not good, just sharing my thoughts, and hope that I’m wrong.

[jwb]

This sounds like terrible news to me. I would love someone to show me where I am wrong, so I can look forward to a .20 return per dollar invested? and then pay 50% tax, so in essence it is a 10% return?? ok, I guess in this economy that's more than good, but it is hardly the riches I was led to expect -- and I own it was my greediness that allowed myself to believe it could be true. Grrrgh.

[jackdavis1364]

I have been arguing all day that this is not a lop and I will continue to defend my statements. I think I know what they are doing as I have said all along and that is to get the large bills off the streets, so to speak. Do away with them just as the US did with their large denominations. The UNFORTUNATE use of the word redenomination is where the problem lies. If this was, in fact, a redenomination, I think the naysayers would be right about the lop. I don't think they are redenominating the currency. I think they are merely pulling the larger bills in and will be relying on the smaller bills just as we do. They will still need the rv. Frankly, I don't think the word is redenominate. It is more like restructuring. I contend, as stated above, that redenomination is a poor choice of wording when compared to the explanation given to what they are doing. I hope I'm correct.

[muydinar]

This is not good. It says lop, if it was a RV they wouldn't be announcing they are going to RV. This is horrible news!

[jackdavis1364]

After reading ninelives above, I have one thing to say. If that is true forget what I typed before and insert: "We are screwed, blued and tatooed".

[NineLives]

Originally posted by the another site; August 14, 2009

(Full posting can be read on his webpage)

Changing Iraq Currency. Here we go again with the recent Arab media reporting mentioning the printing of new Iraq currency. You can't say that I didn't warn you as I have mentioned the dinar currency exchange in my blog how many times? I don't see this happening until after the national elections. This is going to be a slow process but it will happen as the currency needs a new look with those nice authorized signatures. When this does happen be sure to get your smuggled Iraqi dinar back to Iraq in time before the borders are shut down and the exchange is taking place inside Iraq.

[Grumpy]

another site is always right to, I think we have seen a little different picture of AC but we are all entitled to our own opinions

[Grumpy]

This is an article released Aug/2008

Iraq central bank takes steps to ‘rebase dinar’

BAGHDAD: The Central Bank of Iraq has taken steps to rebase the Iraqi dinar and issue new banknotes, a senior official at the bank has said.

“We have reached a conclusion that we should take off three zeroes from the current Iraqi dinar banknotes,” Mudher Qasim, the bank’s senior advisor, told Dow Jones Newswires in an exclusive interview.

“The process is progressing and we have taken some steps,” Qasim said. “We will issue a decision in due time.” Qasim didn’t give a timeframe when that decision would be taken, but said printing new banknotes and fully replacing old notes would take two years from the time the decision is taken.

Iraqi Finance Minister Bayan Jabor said his ministry had suggested to the central bank to take off three zeroes from the current Iraqi dinar banknotes. “The Central Bank governor (Sinan Al-Shabibi) has informed me that the bank is in the process of taking that decision,” Jabor told the state-run Al-Iraqia Satellite Channel this week.

“The Central Bank of Iraq supports what the finance minister was saying,” Qasim said.

If the rebase decision is taken, it means a current 25,000 Iraqi dinar banknote will become 25 dinars, for example. When three zeroes are knocked off the Iraqi dinar, a dollar will equal only 1.20 dinars. Currency rebasings are usually monetarily neutral and are introduced to make commercial calculations and cash dealing easier and cheaper. Turkey knocked six zeroes off its lira currency January 1, 2005, for example. Russia did the same for its currency. “In a country like Iraq where cash consists 80% of money dealing, we need smaller bank notes,” Qasim said, adding that current Iraqi banknotes were difficult to store and need strict security measures when moving money from one place to another.

There are now some 20tn Iraqi dinar banknotes in use in the market, which is a very big amount and if Iraq knocked 3 zeroes it would become 20bn dinars which is a reasonable amount, he said.

Qasim also said one of the reasons for rebasing the Iraqi dinar is because the bank has managed to reduce the country’s high rates of inflation. The inflation rate fell to 14.7% in May this year from a record high of 60% in late 2006. In July 2004, the now dissolved US civilian authority in Iraq decided to print the current Iraqi banknotes replacing those used to bear the picture of the former Iraqi leader Saddam Hussein. Iraqis then had three months to swap their old dinars with the new ones.

“This time we aren’t in hurry, if it takes two years to swap the new currency with the old one, then let it so,” Qasim said.

Again this is almost 2 year old article, many things have changed since this article was written

[caddieman]

Since no one (except a few) in chat want to here this I will post it here to give another interpretation to this article part by part

"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."

They plan on removing 3 Zeros and phase out.......not phase out then remove the zeros so now the 25,000 is now 25 dinar........next

"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."

They will be gradually removed.....remember this

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

That means both the larger 25k etc. and the new denoms will be in cir at the same time

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

So what has to happen? He says there is 25 trillion in circulation now. So how do you get back to 25 billion.......you drop 3 zeros from the dinar and looks what happens.........you got 25 billion

"He said he expects the currency change to go smoothly because of the decision to allow both the old and new banknotes to coexist,"

This is where people get lost. How can the coexist? Its easy. Lets say one of the new denoms is going to be a 25 dinar note. They have dropped 3 zeros on the existing dinar so now you still have a 25,000 dinar note and a 25 dinar note.......they will have the same buying power. A 25,000 dinar note will have the same buying power as a NEW 25 dinar note. Right now a 25,000 dinar note is worth $21.37 USD after they drop the three zeros from the currency you will have a NEW 25 dinar note what will be worth $21.37 USD. So they will coexist at the same value. A 25,000 dinar note will = a new 25 dinar note. As the 25,000 dinar notes come into the bank they will be replaced with a 25 dinar note........so gradually(key word) the larger bills will be taken out of circulation over time and replaces with the new denominations. They will coexist for a time.

So what I think the article is saying is that they are dropping 3 zeros(to get to the 25 billion in circulation) and RVing the new dinar (25 dinar note is now worth $21.37) all at the same time. So the 1000 dinar coke every one is talking about will now be 1 dinar that you can use 1 dinar on.

So what does this mean for the investor? 1) you want lose your money 2) you will not be a millionaire but it also means that the dinar could reach $2 or $3 USD very quickly if a 25 dinar note is worth $21.37 that means they have RVed it to .85 so you could still triple your investment

Now this is just how I am reading what this article is saying. Could I be dead wrong? Absolutely!!!!! and I hope I am. But that is the way it reads to me. Now to grumpy and just about 99 % of you it read it a totally different. Hey that is what makes the world go round. OK 99% of you bash away! lol

[Grumpy]

This sounds like terrible news to me. I would love someone to show me where I am wrong, so I can look forward to a .20 return per dollar invested? and then pay 50% tax, so in essence it is a 10% return?? ok, I guess in this economy that's more than good, but it is hardly the riches I was led to expect -- and I own it was my greediness that allowed myself to believe it could be true. Grrrgh.

where do I start....

Ok first you only pay taxes on your gains, not investment + gains.

They basically stated there will be no lop until all the currency has been recovered.

[chickone]

rv rv rv just do it - appreciate anyones input and opinions - wait and see - it's still better than the lottery ticket imo

[RMLP]

What I know is that a currency is LOP when there is hyper-inflation and when there is more than one currency. Don't know really where this fits in but its an additional thought...

[Grumpy]

What I know is that a currency is LOP when there is hyper-inflation and when there is more than one currency. Don't know really where this fits in but its an additional thought...

You nailed it, there is NO hyper-inflation as a matter of fact they have less than 5% inflation

[muydinar]

Medic said last week to expect negative propaganda to get people to exchange prior to RV. Hopefully he was correct and this is exactly that!

[calibama]

This all gives me a headache...... COME ON RV!!!!!!!!!!

[Janie]

thanks for explaining this

[THOR]

I think people are reading this the wrong way regarding removing the 3 x 000 off the notes the way i see it you take in a $25k note and you get 1000 $25 notes in return WHALLA the zeros have gone but you still have the same value

JMO

[wishfulthinking]

Since no one (except a few) in chat want to here this I will post it here to give another interpretation to this article part by part

"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."

They plan on removing 3 Zeros and phase out.......not phase out then remove the zeros so now the 25,000 is now 25 dinar........next

"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."

They will be gradually removed.....remember this

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

That means both the larger 25k etc. and the new denoms will be in cir at the same time

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

So what has to happen? He says there is 25 trillion in circulation now. So how do you get back to 25 billion.......you drop 3 zeros from the dinar and looks what happens.........you got 25 billion

"He said he expects the currency change to go smoothly because of the decision to allow both the old and new banknotes to coexist,"

This is where people get lost. How can the coexist? Its easy. Lets say one of the new denoms is going to be a 25 dinar note. They have dropped 3 zeros on the existing dinar so now you still have a 25,000 dinar note and a 25 dinar note.......they will have the same buying power. A 25,000 dinar note will have the same buying power as a NEW 25 dinar note. Right now a 25,000 dinar note is worth $21.37 USD after they drop the three zeros from the currency you will have a NEW 25 dinar note what will be worth $21.37 USD. So they will coexist at the same value. A 25,000 dinar note will = a new 25 dinar note. As the 25,000 dinar notes come into the bank they will be replaced with a 25 dinar note........so gradually(key word) the larger bills will be taken out of circulation over time and replaces with the new denominations. They will coexist for a time.

So what I think the article is saying is that they are dropping 3 zeros(to get to the 25 billion in circulation) and RVing the new dinar (25 dinar note is now worth $21.37) all at the same time. So the 1000 dinar coke every one is talking about will now be 1 dinar that you can use 1 dinar on.

So what does this mean for the investor? 1) you want lose your money 2) you will not be a millionaire but it also means that the dinar could reach $2 or $3 USD very quickly if a 25 dinar note is worth $21.37 that means they have RVed it to .85 so you could still triple your investment

Now this is just how I am reading what this article is saying. Could I be dead wrong? Absolutely!!!!! and I hope I am. But that is the way it reads to me. Now to grumpy and just about 99 % of you it read it a totally different. Hey that is what makes the world go round. OK 99% of you bash away! lol

Caddieman, how do you get the .85 exchange rate?

[tlar]

Thank god my dinars are in 50's and 500's. I guess I'm the only one on dinarvets that will be rich. Come to think of it any Iraqi who also has any small bills will also see those bills be worth a 1000 x's more it's present value while anyone in iraq that has saved any note with 3 zero's will see there value plumet. Right guys? Come on use you heads. A a dinar is a dinar. You might as well say all dinars are being rebased except the purple ones. Anyone who has or has saved purple ones, are screwed all other colors are going to be worth a lot more money... If your going to rebase a currency, you rebase a currency in toto, not some notes while rebasing others. Think what would happen if the US said they were removing only the zero that were paired in otherwords making the hundreds worth $1.

[THOR]

Repeat

I think people are reading this the wrong way regarding removing the 3 x 000 off the notes the way i see it you take in a $25k note and you get 1000 $25 notes in return WHALLA the zeros have gone but you still have the same value

YOU CANNOT JUST TAKE THE VALUE OF MONEY AWAY FROM PEOPLE

they are just changing the notes not the value of the notes 1iqd will = 1iqd no matter what note it is on !!!

JMO

[MJaz]

Thank god my dinars are in 50's and 500's. I guess I'm the only one on dinarvets that will be rich. Come to think of it any Iraqi who also has any small bills will also see those bills be worth a 1000 x's more it's present value while anyone in iraq that has saved any note with 3 zero's will see there value plumet. Right guys? Come on use you heads. A a dinar is a dinar. You might as well say all dinars are being rebased except the purple ones. Anyone who has or has saved purple ones, are screwed all other colors are going to be worth a lot more money... If your going to rebase a currency, you rebase a currency in toto, not some notes while rebasing others. Think what would happen if the US said they were removing only the zero that were paired in otherwords making the hundreds worth $1.

tlar, you made me feel alot better!!

I was thinking if I bought 100,000 Dinar for $100 & $40 shipping & Wire Transfer fee I would have 100 Dinar after the 000's gone. I would need a $1.40 RV to just break even!

[MJaz]

Is there any small Denom Dinars out there right now? If there is I would think this would be Debunked, look at tlar's post. Please someone tell me you have small Denom Dinars!!!