Iraq’s central says the country is in need of a new currency

[jpandlef3]

By Khayoun Saleh

Azzaman, July 15, 2011

Iraq’s central says the country is in need of a new currency in which the current zeros are removed to facilitate commercial transactions.

Central Bank Governor Sinan al-Shabibi said he was in talks with the prime minister, Noor al-Maliki, on how to go ahead with the bid to issue dinars with lower denomination and higher appreciation.

Shabibi said Iraqis were now relying a lot on the U.S. dollar, particularly in settling cash transactions that required a lot of money.

The use of credit cards is still limited in Iraq and cash is still the main source in trade and commerce.

Allocations even for small projects and to carry out simple commercial deals are in millions or billions of dollars.

Three bundles of $10,000 require carrying or paying about 40 million dinars.

The new arrangement, once carried out, will make transactions simpler and easier, the Central Bank governor said.

Calculating and paying with the current currency makes trade deals rather “awkward and difficult” for a small country like Iraq, Shabibi said.

Other countries, like Turkey and Brazil, successfully dealt with the same problem by removing zeros from their currency.

In Turkey, people dealt with millions of liras for simple purchases and transactions. Today a dollar is worth about 1.6 liras.

Shabibi said there was a lot for Iraq to learn from Turkey.

[PD46]

This article is all over the place. I really need an economists major to bail me out on this, but I'm going to try this.

Turkey just dropped zeros off of the face of the currency and never changed their exchange rate. My understanding, correct me if I'm wrong, was that Turkey introduced larger denominations to ease purchasing power under heavy inflation and dropped the zeros just recently to easy monetary transactions instead of looking like Zimbabwee; even though inflation still exist in Turkey. Look at Italy and the Italian Lira. Zeros are typically dropped to ease monetary transactions during continued and sustained inflation; generally speaking. Iraq does not have that problem. Inflation is holding around 6.6% generally speaking.

Brazil was in the same boat financial and economically as Turkey; and Brazil did the same thing as Turkey to their curreny.

The only glimmer of hope here is that I don't believe Turkey or Brazil back their currency against gold completely or at all. Again, correct me if I'm wrong.

Dr. Shabibi needs to explain to us all his definition of nominal versus real value in an economics context.

Turkey and Brazil were not ripped apart by a dictator and three wars in two decades. If Shabibi plans on modeling Iraq after Turkey by saying "there is a lot to learn from Turkey", then Iraq is doomed to massive unemployment and a crumbling infrastructure. Turkey can't get their house in order now with their oil revenues, and Brazil needs Obama to be their oil buddy; and I suspect Brazil will still be in desperate straits in a decade. Brazil is nothing more than a centralized planning model for a UN pipe dream that will never develop into self-sustained fruition.

Shabibi is probably talking to Malaki and has been for some time about this about the currency. I seriously doubt that Shabibi wants to make Iraq into Turkey; just as I seriously doubt the Shia would allow Iraq to become like that.

More smoke and mirrors. I feel like we are all in a H-o-o-k-a-h Bar in Bagdad.

Edited July 17, 2011 by PD46

[PD46]

Thanks for the post Jpandlef3. Repeat post.

[keepmwlknfny]

This article is all over the place. I really need an economists major to bail me out on this, but I'm going to try this.

Turkey just dropped zeros off of the face of the currency and never changed their exchange rate. My understanding, correct me if I'm wrong, was that Turkey introduced larger denominations to ease purchasing power under heavy inflation and dropped the zeros just recently to easy monetary transactions instead of looking like Zimbabwee; even though inflation still exist in Turkey. Look at Italy and the Italian Lira. Zeros are typically dropped to ease monetary transactions during continued and sustained inflation; generally speaking. Iraq does not have that problem. Inflation is holding around 6.6% generally speaking.

Brazil was in the same boat financial and economically as Turkey; and Brazil did the same thing as Turkey to their curreny.

The only glimmer of hope here is that I don't believe Turkey or Brazil back their currency against gold completely or at all. Again, correct me if I'm wrong.

Dr. Shabibi needs to explain to us all his definition of nominal versus real value in an economics context.

Turkey and Brazil were not ripped apart by a dictator and three wars in two decades. If Shabibi plans on modeling Iraq after Turkey by saying "there is a lot to learn from Turkey", then Iraq is doomed to massive unemployment and a crumbling infrastructure. Turkey can't get their house in order now with their oil revenues, and Brazil needs Obama to be their oil buddy; and I suspect Brazil will still be in desperate straits in a decade. Brazil is nothing more than a centralized planning model for a UN pipe dream that will never develop into self-sustained fruition.

Shabibi is probably talking to Malaki and has been for some time about this about the currency. I seriously doubt that Shabibi wants to make Iraq into Turkey; just as I seriously doubt the Shia would allow Iraq to become like that.

More smoke and mirrors. I feel like we are all in a H-o-o-k-a-h Bar in Bagdad.

Thats the thing, Turkey did change the exchange rate after they dropped the zeros.....we even have a member here who was living in Turkey at the time that has chimed in on a regular basis on these articles and explained what exactly happened....its def what we dont want....

On the inflation side, you dont necessarily have to have high inflation to delete the zeros.....its successfully done when you can get the hyperinflation under control which shabs has done an amazing job on that part! The problem is the affects that the hyperinflation had on the currency, which is why the zeros exist in the first place.....a RD gets rid of those affects, and allows to strengthen the currency as a result....so its really not all that bad for Iraq, just for us.....

[Doctor Smith]

Turkey just dropped zeros off of the face of the currency and never changed their exchange rate. My understanding, correct me if I'm wrong

Read more: http://dinarvets.com/forums/index.php?/topic/75259-iraq%e2%80%99s-central-says-the-country-is-in-need-of-a-new-currency/#ixzz1SNJsLZAM

In a lop such as the one in Turkey. The decimal place (on the exchange rate) is moved the same amount of places to the left as the amount of zero's removed. This keeps the value of the new note the same as the old.

For the Lopsters. Can any one name a country that this happened in after the US invaded and installed a new government?

[keepmwlknfny]

Turkey just dropped zeros off of the face of the currency and never changed their exchange rate. My understanding, correct me if I'm wrong

Read more: http://dinarvets.com.../#ixzz1SNJsLZAM

In a lop such as the one in Turkey. The decimal place (on the exchange rate) is moved the same amount of places to the left as the amount of zero's removed. This keeps the value of the new note the same as the old.

For the Lopsters. Can any one name a country that this happened in after the US invaded and installed a new government?

What exactly are you pointing to? What is happening here in Iraq, hasent really happened anywhere else before......I mean germany RD but that wasent the same as whats going on now...

[Doctor Smith]

What exactly are you pointing to? What is happening here in Iraq, hasent really happened anywhere else before......I mean germany RD but that wasent the same as whats going on now...

The US has to get their money back some way. It is confusing what happened in Germany but my German relative told me that if you hung on to those bills you did get a larger return.

What I'm pointing to is that I don't think any country has lopped after the US has went in and installed a new government.

To those that think a RD is the same as a lop. A RD can be part of a straight out RV as you may need to print new bills for various reasons other than a lop.

In a lop such as the one in Turkey. The decimal place (on the exchange rate) is moved the same amount of places to the left as the amount of zero's removed.

Read more: http://dinarvets.com/forums/index.php?/topic/75259-iraq%e2%80%99s-central-says-the-country-is-in-need-of-a-new-currency/#ixzz1SNisUqVL

I meant. Move the decimal place to the right on the exchange rate.

[Alexyn1006]

http://www.azzaman.com/english/index.asp?fname=news%5C2011-07-15%5Ckurd.htm The link in case anyone wants it.

[Doctor Smith]

It sounds like they are talking about a lop. Sugar coating it by saying it will enable appreciation. When in fact it will limit appreciation.

On the plus side they are saying they have to carry large bundles of money. If they lop they will still be carrying large bundles of money. Unless they keep or issue new larger bills. So in fact they will have to RV to decrease the amount of money being carried around.

Hopefully this is propaganda to limit the speculation. This way if they lop they will be able to say they said it all along. If they RV no one will complain about that either (except those that sold their Dinar) .

[abutchbaker]

RV RV now

[keepmwlknfny]

It sounds like they are talking about a lop. Sugar coating it by saying it will enable appreciation. When in fact it will limit appreciation.

On the plus side they are saying they have to carry large bundles of money. If they lop they will still be carrying large bundles of money. Unless they keep or issue new larger bills. So in fact they will have to RV to decrease the amount of money being carried around.

Hopefully this is propaganda to limit the speculation. This way if they lop they will be able to say they said it all along. If they RV no one will complain about that either (except those that sold their Dinar) .

Your 100% correct....and I think thats where some of the confusion is because people see the part about dinar appreciation and just think that they are saying they are going to flat out RV.....

They will, but it seems after the RD has taken place.....this is just all going off of whats been said the past couple years of course.....seems it will still be a little bit before we know for sure if this plan gets approved or not....so until then, all we can do is keep an eye on all the currency articles coming out.....

[dinarck]

Your 100% correct....and I think thats where some of the confusion is because people see the part about dinar appreciation and just think that they are saying they are going to flat out RV.....

They will, but it seems after the RD has taken place.....this is just all going off of whats been said the past couple years of course.....seems it will still be a little bit before we know for sure if this plan gets approved or not....so until then, all we can do is keep an eye on all the currency articles coming out.....

Maybe when they say appreciation they are speaking about bringing the exchange rate to 1.00 from .86 during the redenomination. They have hinted to this before.

[Doctor Smith]

Maybe when they say appreciation they are speaking about bringing the exchange rate to 1.00 from .86 during the redenomination. They have hinted to this before.

That's what I meant by limited appreciation. They could increase the value of their currency the exact same amount by merely raising the exchange rate to .001. And they wouldn't be limiting themselves as they could later increase the rate whenever they want.