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Tradable currency


edwarda
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When has the IQD revalued?...I assume you are talking about minor adjustments in it's value....

As far as the 000 notes being taken out of circulation...we do have proof that it is not happening...their money supply is not being reduced and since the value is only equal to $25 they have to use these notes for almost all purchases...I would agree with you that the majority of the country is very poor but that has little to do with the removal of 000 notes....surely you aren't proposing that they are replacing these with 50 dinar notes??? They couldn't function....the only value in removing the 000 notes would be to reduce the money supply...which is easy to verify and it isn't coming down.

I guess if you want to consider the changes in value that has taken the exchange rate from 4,000/1 to the current 1170/1 as minor changes then there hasn't been a revalue. In my eye's those changes that have occurred would be classified as a significant revalue. The currency has come from .00025/$1 to .00086/$1, a difference of .00061 I wonder how many folks here would be excited to see a revalue to .0017 or 585 IQD/$1? That would mean we doubled our money from the current 1170/1. I guess minor is the eye of the beholder.

Really you have proof. Pretend I am from Missouri and show me. Show me the figures from this month, last month or how about the month before. The last figures I saw were from April. That's 3 months ago. Show me their current figures for currency in circulation. I am anxious as I am sure most everyone is to see these.

I never said they were replacing the 000 notes with 50 dinar notes. Not sure where you got that from. Scroll up and take a look real quick....I'll wait. I said the majority of daily purchases in Iraq are done with the tons of US Dollars that our government shipped over there. I said that the Iraqi people who are wealthy enough to have the 000 notes use them for large purchases, but I bet even the wealthy folks are using the $100 bills because they don't have to carry as many of the 000 notes. The CBI has stated in several different articles that 000 notes were becoming scarce in area's of Iraq. If the 000 notes are as common as you propose then why would the CBI say this? You said if they removed all the 000 notes from circulation they couldn't function. I wonder how they functioned before the current currency was introduced? You know back when all they had was our US Dollars.

speculatorsRIDE , Good points. But once the sanctions are fully lifted could they not trade goverments thier oil for construction projects and wait to RV when they are a little more stable? They could give a country oil and the country would then compensate whoever won the contract.

When they are fully lifted then yes they could but why would they? They will have tradeable currency then.

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Edwarda.... Anything can be a tradeable currency in the most basic definition so long as you have 2 parties willing to trade with it. The Dinar has some forms but not well recognized or easily accessible ones. For example, interbanks like Forex and XE that facilitate transactions between parties. Right now if you were to live outside of Iraq then your options are more limited the further away you get from the Middle East. If you wanted to trade your Dinar back into dollars right now what would you do? Sell it to friends, list it on the forums, ebay, maybe try and sell it to broker that sold it to you, or go to Iraq.

So... I guess you kinda have options. Do you think that very many publicly traded companies would be willing to risk tens of millions of their shareholder's dollars to set up shop in Iraq without assurances? They would have a hard time answering to shareholders unless the very nature of their company works internationally in higher volatility markets right? The risk must be far greater than the reward right? That is why you see mostly oil and gas, mineral, defense, construction, etc as the few companies invested in Iraq now. The more countries and companies that pile in the more credibility that evolves with the currency and the more security and stability is created right? Kind of like jellyfish in the swim beach. It takes a few bravehearts to get back in the water before the rest of them start back in.

This is called currency convertibility. Countries are measured as to high or low convertibility when business are investing, or tourists are shopping for destinations. It is the ease of which you can exchange that countries currency for gold or another currency. Right now Iraq has very difficult or low convertibility. It is why this is taking longer for investment in Iraq. Security, lack of infrastructure, the corruption in contracts, all factor into the level of convertibility. Right now banks in the US for the most part are not exchanging your Dinar back to Dollars. If it significantly RV'd tomorrow out of the blue...your only option I can see right now is to cash through the broker you bought it from. They have to facilitate the transaction directly with the CBI like they did when they bought it from them to sell to you. That would be a low convertibility wouldn't you say? The CBI has set the table for stability. They have a higher reserve and lower inflation and the ability to move the exchange and interest rates. That is big. The problem is not with the CBI. It is with the ability of Iraq to support a higher rate. That is the hold up IMO. That is why I believe it will be a gradual move so that the economy can grow with it and support higher rates. Its all about the credibility and the stability.

Edited by drox
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When they are fully lifted then yes they could but why would they? They will have tradeable currency then.

does A tradeable currency mean a RV? I'm just saying why would a country go into debt to RV thier currency when they could trade their oil for a while and build up production to increase thier wealth and then RV.

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I guess if you want to consider the changes in value that has taken the exchange rate from 4,000/1 to the current 1170/1 as minor changes then there hasn't been a revalue. In my eye's those changes that have occurred would be classified as a significant revalue. The currency has come from .00025/$1 to .00086/$1, a difference of .00061 I wonder how many folks here would be excited to see a revalue to .0017 or 585 IQD/$1? That would mean we doubled our money from the current 1170/1. I guess minor is the eye of the beholder.

Really you have proof. Pretend I am from Missouri and show me. Show me the figures from this month, last month or how about the month before. The last figures I saw were from April. That's 3 months ago. Show me their current figures for currency in circulation. I am anxious as I am sure most everyone is to see these.

I never said they were replacing the 000 notes with 50 dinar notes. Not sure where you got that from. Scroll up and take a look real quick....I'll wait. I said the majority of daily purchases in Iraq are done with the tons of US Dollars that our government shipped over there. I said that the Iraqi people who are wealthy enough to have the 000 notes use them for large purchases, but I bet even the wealthy folks are using the $100 bills because they don't have to carry as many of the 000 notes. The CBI has stated in several different articles that 000 notes were becoming scarce in area's of Iraq. If the 000 notes are as common as you propose then why would the CBI say this? You said if they removed all the 000 notes from circulation they couldn't function. I wonder how they functioned before the current currency was introduced? You know back when all they had was our US Dollars.

When they are fully lifted then yes they could but why would they? They will have tradeable currency then.

no i would not consider that a revalue of their currency...I would consider it a growth in value...as in gradual and not an overnight 10000% increase...I do think they can continue to grow the value of the currency....just not the way most on here think they can do it.

as far as the M2 goes...you think they have reduced it by trillions of dinars in the last two months?...you and I both know there is nothing to back that up...but the April number as the last number is the only one that matters...and it is over 50 trillion dinar...

they can't only remove the notes with 000's on them....the auctions are electronic and thereby don't distinguish between notes with 000's or 00's or 0...what does it matter if they are using US dollars there?....their money supply has not been reduced...but if your theory is that they only started removing the 000's in May and have been removing them for May and June as well as a little of July...then you are correct...I don't have any proof that they aren't....but you don't have any proof that they are.

The articles are very clear in the meaning of raising the 000's....and it isn't removing them from circulation.

I can prove they haven't done this prior to May of this year....you can't prove they have every removed them from circulation and reduced the money supply.

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no i would not consider that a revalue of their currency...I would consider it a growth in value...as in gradual and not an overnight 10000% increase...I do think they can continue to grow the value of the currency....just not the way most on here think they can do it.

as far as the M2 goes...you think they have reduced it by trillions of dinars in the last two months?...you and I both know there is nothing to back that up...but the April number as the last number is the only one that matters...and it is over 50 trillion dinar...

they can't only remove the notes with 000's on them....the auctions are electronic and thereby don't distinguish between notes with 000's or 00's or 0...what does it matter if they are using US dollars there?....their money supply has not been reduced...but if your theory is that they only started removing the 000's in May and have been removing them for May and June as well as a little of July...then you are correct...I don't have any proof that they aren't....but you don't have any proof that they are.

The articles are very clear in the meaning of raising the 000's....and it isn't removing them from circulation.

I can prove they haven't done this prior to May of this year....you can't prove they have every removed them from circulation and reduced the money supply.

You say growth in value and I say revalue and the dictionary says it's the same thing.

re·val·ue (r-vly)

tr.v. re·val·ued, re·val·u·ing, re·val·ues

1. To revise the value of (a nation's currency).

2. To evaluate anew; reappraise.

The American Heritage® Dictionary of the English Language, Fourth Edition copyright ©2000 by Houghton Mifflin Company. Updated in 2009. Published by Houghton Mifflin Company. All rights reserved.

revalue [riːˈvæljuː] US, revaluate

vb

1. (Economics) to adjust the exchange value of (a currency), esp upwards Compare devalue

2. (tr) to make a fresh valuation or appraisal of

revaluation n

Collins English Dictionary – Complete and Unabridged © HarperCollins Publishers 1991, 1994, 1998, 2000, 2003

ThesaurusLegend: Synonyms Related Words Antonyms

Verb 1. revaluerevalue - gain in value; "The yen appreciated again!"

apprise, apprize, appreciate

increase - become bigger or greater in amount; "The amount of work increased"

apprise, apprize, appreciate - increase the value of; "The Germans want to appreciate the Deutsche Mark"

2. revalue - value anew; "revalue the German Mark"

apprise, apprize, appreciate - increase the value of; "The Germans want to appreciate the Deutsche Mark"

rate, value - estimate the value of; "How would you rate his chances to become President?"; "Gold was rated highly among the Romans"

Edited by speculatorsRIDE
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To Drox;

Thank you the explanation. I am curious about this line " Right now Iraq has very difficult or low convertibility.". I understand what you are saying, but is it just that other countries do not want to exchange Dinars that is keeping their Dinar off the international market regardless of value? Trying to grasp this idea that if say any country wanted to sell tractors or trucks to Iraq and decided to take $30,000,000 dinar to buy one tractor (knowing it is done electronically) then it transaction could take place just like the power stations and water plants. So never mind the rate, if other countries just decided to go ahead with business they could? I am just still having a questions bouncing around in my head about Japan, France, Germany and other countries are selling housing projects and infrastructure to Iraq if they can not exchange their currency other than in the middle east. Do all countries demand payment in USD?

Thanks to everyone trying to help get me straight.

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To Drox;

Thank you the explanation. I am curious about this line " Right now Iraq has very difficult or low convertibility.". I understand what you are saying, but is it just that other countries do not want to exchange Dinars that is keeping their Dinar off the international market regardless of value? Trying to grasp this idea that if say any country wanted to sell tractors or trucks to Iraq and decided to take $30,000,000 dinar to buy one tractor (knowing it is done electronically) then it transaction could take place just like the power stations and water plants. So never mind the rate, if other countries just decided to go ahead with business they could? I am just still having a questions bouncing around in my head about Japan, France, Germany and other countries are selling housing projects and infrastructure to Iraq if they can not exchange their currency other than in the middle east. Do all countries demand payment in USD?

Edwarda... please understand that all I know is from my months and months of research and thus is somewhat left to my interpretation. I am not directly in day to day transactions so temper anything I tell you with that understanding please. With that said, I highlighted your question in red that I will try and address. Hopefully it will answer the one below it too.

People tend to think that when an international company does business in another country that they are paid in that country's currency (in this case Iraq). That is not necessarily true. The companies doing business in Iraq sign contracts up front that specifically state they are to be paid in their home currency. For Instance... Foster Wheeler European division would want to be paid in Pound Sterling. The banks in Iraq make most of their money from wire transfers and not loans. So I believe this has a lot to do with the currency auctions that the CBI holds. It is possible for a company to ask to be paid in the host country's currency but it is very unlikely. Factor in that Iraq is mostly a cash based society and not using electronic like we would hope they would. Saddam took all of their money through banks and they have very little trust to this day. The CBI is trying to change that paradigm.

Remember... in Iraq, the GOI controls about 90% of the GDP (that stat might need to be verified). So, basically everything runs through the Government. This is why corruption is such a rampant problem. That specifically leads to problems with security, back office dealings, and currency conversion issues. It is why privatization needs to take place for the long term benefit of Iraq's growth. Put all this together and you see why the company's would want their own currency to eliminate unnecessary risk. It is why they have to amend the Investment Law of 2006.

http://www.state.gov...2010/138084.htm Please read this article in full it will help you some and here is a quote from it below:

The Iraqi authorities confirm that in practice there are no restrictions on current and capital transactions involving currency exchange as long as underlying transactions are supported by valid documentation. The International Monetary Fund’s annual publication on Exchange Arrangements and Restrictions states that: “Restrictions on capital transactions are not enforced; however, documentation and reporting requirements apply.” The National Investment Law contains provisions that, once implemented, would allow investors to bank and transfer capital inside or outside of Iraq.

Edited by drox
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You say growth in value and I say revalue and the dictionary says it's the same thing.

re·val·ue (r-vly)

tr.v. re·val·ued, re·val·u·ing, re·val·ues

1. To revise the value of (a nation's currency).

2. To evaluate anew; reappraise.

The American Heritage® Dictionary of the English Language, Fourth Edition copyright ©2000 by Houghton Mifflin Company. Updated in 2009. Published by Houghton Mifflin Company. All rights reserved.

revalue [riːˈvæljuː] US, revaluate

vb

1. (Economics) to adjust the exchange value of (a currency), esp upwards Compare devalue

2. (tr) to make a fresh valuation or appraisal of

revaluation n

Collins English Dictionary – Complete and Unabridged © HarperCollins Publishers 1991, 1994, 1998, 2000, 2003

ThesaurusLegend: Synonyms Related Words Antonyms

Verb 1. revaluerevalue - gain in value; "The yen appreciated again!"

apprise, apprize, appreciate

increase - become bigger or greater in amount; "The amount of work increased"

apprise, apprize, appreciate - increase the value of; "The Germans want to appreciate the Deutsche Mark"

2. revalue - value anew; "revalue the German Mark"

apprise, apprize, appreciate - increase the value of; "The Germans want to appreciate the Deutsche Mark"

rate, value - estimate the value of; "How would you rate his chances to become President?"; "Gold was rated highly among the Romans"

I'm good with that Spec....I either way, you are correct that it has risen in value over the years and I would agree that it has risen a significant amount...I also hope that it will continue to rise/revalue....but at the current M2 it can't make the leap that we would all like to see....it won't make us wealthy on a $1000 investment...unfortunately.

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I'm good with that Spec....I either way, you are correct that it has risen in value over the years and I would agree that it has risen a significant amount...I also hope that it will continue to rise/revalue....but at the current M2 it can't make the leap that we would all like to see....it won't make us wealthy on a $1000 investment...unfortunately.

I disagree. I believe they are pulling out the 000 notes as they sell dollars to the Iraqi banks at the daily auctions. The dollar is still the currency of choice in Iraq, just like it is in most depressed economies around the world. Why else would the CBI be selling $180M dollars a day of US currency to the local banks. The banks wouldn't be buying it if there wasn't a demand from their customers!!

Because of the 12% and increasing annual GDP rate, inflation is growing faster than they can control it. This is even before all the major reconstruction and foreign investment really begins in ernest. If the economy continues to be allowed to overheat, inflation will definitely get out of control, and if the dinar is left at it's fixed dirty float, Iraq will crash and burn. They must increase the value of their money to counter this. China is in the same boat right now. I think we will see huge financial changes in the world very soon.

Date and rate? Nobody knows, but it isn't going to be some rediculous amount like some people purport! I believe we will make a tidy sum. Be blessed that you are here and invested, and please stop worrying so much.

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I disagree. I believe they are pulling out the 000 notes as they sell dollars to the Iraqi banks at the daily auctions. The dollar is still the currency of choice in Iraq, just like it is in most depressed economies around the world. Why else would the CBI be selling $180M dollars a day of US currency to the local banks. The banks wouldn't be buying it if there wasn't a demand from their customers!!

Because of the 12% and increasing annual GDP rate, inflation is growing faster than they can control it. This is even before all the major reconstruction and foreign investment really begins in ernest. If the economy continues to be allowed to overheat, inflation will definitely get out of control, and if the dinar is left at it's fixed dirty float, Iraq will crash and burn. They must increase the value of their money to counter this. China is in the same boat right now. I think we will see huge financial changes in the world very soon.

Date and rate? Nobody knows, but it isn't going to be some rediculous amount like some people purport! I believe we will make a tidy sum. Be blessed that you are here and invested, and please stop worrying so much.

The auctions are electronic...so how could they be pulling out the 000 notes?...They use the auctions to try to control inflation...if they are using the auctions to reduce their money supply, why doesn't their reporting support that?...I would agree that the dollar is still the currency of choice in Iraq...I would also agree that inflation is starting to be a concern...but a large revalue won't solve these problems.

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Really you have proof. Pretend I am from Missouri and show me. Show me the figures from this month, last month or how about the month before. The last figures I saw were from April. That's 3 months ago. Show me their current figures for currency in circulation. I am anxious as I am sure most everyone is to see these.

When they are fully lifted then yes they could but why would they? They will have tradeable currency then.

Since you asked...they just released the May M2 figures...it has gone up to 59,437 trillion...you can find it here http://cbi.iq/index.php?pid=Statistics look under Key Financial Indicators.

Hope that helps

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Do the other tradable currencies have the resources to back their currency like Iraq ? Iraq is a very very wealthy country

Kuwait is their neighbor and they have oil and their dinar value is 3+ to the dollar.....how can you have worthless money and a gold mine of resources?

Exactly.They will be the pearl of the middle east if they can get their $#%@ together politically.

Cheers.

Sparky

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To me tradeable means they would be traded on FOREX and they are not yet. To my knowledge they are only listed as a exotic and before they can bark with the big dogs they have a lot of work to do. They have come a long way but there is still much to do and they need a track record before they are trusted enough to be a world player. I still think history will show that we made a wise investment but it could be a while before that chapter is written. :rolleyes: Bluto ~~~~~~~~~~~~~~~

Kuwait, Saudi Arabia, Bahrain, and on several foreign exchange sites they list the Chinese yuan as exotic.

Since Iraq always has, and will probably continue to peg their currency against another at a fixed rate, the dinar will probably not ever make it off the exotics list. Why trade a currency that has a fixed rate to a major, when you could simply just trade the major it is fixed against and not have to deal with the larger spreads?

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Do the other tradable currencies have the resources to back their currency like Iraq ? Iraq is a very very wealthy country

Kuwait is their neighbor and they have oil and their dinar value is 3+ to the dollar.....how can you have worthless money and a gold mine of resources?

This is basically the thing I don't understand. How can two countries that border each other who are supposedly working towards an agreement to share shipping ports have currencies that are so disparate in value?

Look at the monetary systems of the two countries... The M2 for Iraq is 59 trillion dinar, with the M2 for Kuwait being just under 27 billion. So the M2 for Iraq is over 2,000 times larger than that of Kuwait.

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