Iraq to Replace its Currency

[carlablum]

Iraq to Replace its Currency

The Iraqi Central Bank announced the completion of a plan to remove three zeros from the dinar, replacing current banknotes with new ones. The Bank will re-print 30 trillion dinars (26 billion dollars).

According to Mazhar Mohammad Saleh, an expert in the Iraqi Central Bank, in a speech with the ALHAYAT of London, “our problem lies in the timing of the currency exchange, as we need to select a suitable time for implementing the project without obstacles.”

The Central Bank planned to remove three zeros from the Iraqi dinar, after suffering from inflation and the decline of the currency during the nineties, due to economic sanctions. The value of the dinar decreased internationally to its current value of approximately 1120 dinars per dollar.

In 2003, the Central Bank adopted a new mechanism to maintain the dinar’s exchange rate. It created a foreign exchange auction to sell dollars that Iraq obtained from the sale of oil in the global markets and then transferred to the bank to sell in local currency, which helped raise the value of the dinar over the last few years to more than 2000 points.

Saleh estimated the government will exchange more than 30 trillion Iraqi dinars, or more than $26 billion dollars. The most important change after deleting the zeros, is to reduce the number of banknotes in circulation, simplifying the payment system in Iraq.

Some economists have warned that the process of exchanging the Iraqi currency will be rife with corruption due to the inaccurate structuring of Iraqi banks. Previous attempts to exchange the currency resulted in major corruption, costly to the Iraqi economy. However, Saleh responds that the process of changing the currency in 2004, occurred under the exceptional circumstance of an occupation, was managed by a civil American governor, and was still successful.

The Central Bank sells, through a daily auction, between $150 million dollars and $190 million dollars daily to clients of private banks and the financial companies.

http://yallafinance.com/2011/08/03/iraq-to-replace-its-currency/

[easyrider]

already posted. thanks anyways carla. .

[Rabbi]

If the CBI is going to re-print 30 trillion dinars, that means NO LOP. If they were going to lop, then they would only need to re-print 30 billion dinars.

Edited August 4, 2011 by Rabbi

[DAME1]

If the CBI is going to re-print 30 trillion dinars, that means NO LOP. If they were going to lop, then they would only need to re-print 30 billion dinars.

Kiss kiss hug hug :D

[Realdinar]

If they're going to print 30 trillion dinars in smaller denoms, then they're not reducing the number of bank notes, they're massively increasing them. The article is internally inconsistent, i.e., useless.

Like most articles that come out. Same old noise, nothing new. Good thing for us though, lopping makes no sense at this point.

[ashtray]

it doesnt have open and close points yet .

if they want everyone to exchange their currency in before they reduce currency that gives it value , i wonder how we will be able to get new dinars for old .. if they bring out new currency and ask for exchange at even up exchange no gains no loss .. to weed out terrorist groups that may of stolen a few billion dinars along the way ... i know they dont need any billionare terrorists hanging around iraq

for security reasons they may have a plan we are not aware of yet

we may be looking at a exchange right here in the us .. only to be a registration exchange period.. you know say some person with terrorists ties shows up with 5 billion dinars .. they will know .. billions of dinars have nbeen reported as stolen in iraq

and after that original exchange we may all own electronic dinars regestered within our treasury

[BlueOrchid919]

30 trillion dinars is approx what Iraq has now with the current currency. They are planning to print 30 trillion dinars of NEW currency. They will both co-exist (~ 60 trillion dinars) until the OLD dinars are out of circulation, leaving the 30 trillion dinars of NEW currency in circulation. Very simple. Very easy to explain to the people. And clearly stated in numerous articles. The TIMING of the introduction of the NEW currency is what is in question. They have to educate the people, coordinate with the banking system, get the new currency printed, etc. The OLD currency will be 1000:1 to the NEW currency, as also stated in numerous articles.

Edited August 4, 2011 by BlueOrchid919

[Rabbi]

If they're going to print 30 trillion dinars in smaller denoms, then they're not reducing the number of bank notes, they're massively increasing them. The article is internally inconsistent, i.e., useless.

I don't think you get it. The only way for an Iraqi get the smaller denoms is to exchange their large denoms for them, either at a bank or with a merchant of some kind. The banks will have to first exchange their large denoms for the LDs put forth by the CBI. Businesses and individuals can obtain their LDs by exchanging them at the banks for their large denoms. For individuals who do use the banks (I've read that 85% of Iraqis do NOT have a bank account), they will get their LDs from all of the businesses that they no doubt transact with as part of Iraqi society. While all of this is going on, the CBI will DESTROY THE BIG BILLS they receive from the banks in exchange for the newly-issued LDs. The CBI will burn or shred an equal amount of dinars in big bills as they have issued in small bills. This way, the money supply will remain at 30 trillion dinars.

Edited August 4, 2011 by Rabbi

[oneremedy]

From what I understand, if they print NEW bills, they will need to buy back ours from us and destroy them to remove from circulation. Am i wrong? NEW bills with less zero's? New rate?

I think i get more confused with each article I read.

[BlueOrchid919]

I don't think you get it. The only way for an Iraqi get the smaller denoms is to exchange their large denoms for them, either at a bank or with a merchant of some kind. The banks will have to first exchange their large denoms for the LDs put forth by the CBI. Businesses and individuals can obtain their LDs by exchanging them at the banks for their large denoms. For individuals who do use the banks (I've read that 85% of Iraqis do NOT have a bank account), they will get their LDs from all of the businesses that they no doubt transact with as part of Iraqi society. While all of this is going on, the CBI will DESTROY THE BIG BILLS they receive from the banks in exchange for the newly-issued LDs. The CBI will burn or shred an equal amount of dinars in big bills as they have issued in small bills. This way, the money supply will remain at 30 trillion dinars.

I like your explanation much better than mine! Even so.... they will need to print a large supply of NEW currency to introduce while at the same time removing from circulation the OLD currency as it gets back to the banking system....from merchant, to bank, to removal from circulation....

Thanks!

[BlueOrchid919]

I don't think you get it. Replacing a 25,000 bill with 100 250s is not "reducing the number of bank notes." It's increasing it by a factor of 100.

I think you may be missing the point yourself.... the replacement will be a 25,000 dinar note for 1 NEW 25 dinar note. One old note for one new note. The NEW currency will be created at 1000:1 as stated in the news articles. Removing 3 zeros...just like in other countries: Mexico, Turkey, Argentina, etc.

[speculatorsRIDE]

30 trillion dinars is approx what Iraq has now with the current currency. They are planning to print 30 trillion dinars of NEW currency. They will both co-exist (~ 60 trillion dinars) until the OLD dinars are out of circulation, leaving the 30 trillion dinars of NEW currency in circulation. Very simple. Very easy to explain to the people. And clearly stated in numerous articles. The TIMING of the introduction of the NEW currency is what is in question. They have to educate the people, coordinate with the banking system, get the new currency printed, etc. The OLD currency will be 1000:1 to the NEW currency, as also stated in numerous articles.

Ok so each 25,000 will be replaced with a 25, each 10,000 replaced with a 10, each 5,000 replaced with a 5 etc etc.

If this is what they intend to do, then how will this reduce the number of notes in circulation? This is what Saleh said:

Saleh estimated the government will exchange more than 30 trillion Iraqi dinars, or more than $26 billion dollars. The most important change after deleting the zeros, is to reduce the number of banknotes in circulation, simplifying the payment system in Iraq.

Read more:

If you replace one note for another, doesn't that leave the same number of notes in circulation?

[dinarck]

Yes, I know that, but the article states they're replacing 30 trillion dinar with 30 trillion dinar, not 30 billion dinar, so the article is effed up, which is my point.

There is no other way this article would make any sense unless something is jacked in the translation. They have to mean they will print 30 trillion worth (old currency) of new currency. Has to be. 30 trillion in lower denoms would be like what..... 1 trillion notes or something. I dont know the exact math but I dont see that happening. I think the same thing is going on with the 500 and 1000 coin articles. Meaning .50 and 1.00 coins new currency. I asked in another thread that if anyone was good with translator programs that maybe they could look into it.

Ok so each 25,000 will be replaced with a 25, each 10,000 replaced with a 10, each 5,000 replaced with a 5 etc etc.

If this is what they intend to do, then how will this reduce the number of notes in circulation? This is what Saleh said:

Saleh estimated the government will exchange more than 30 trillion Iraqi dinars, or more than $26 billion dollars. The most important change after deleting the zeros, is to reduce the number of banknotes in circulation, simplifying the payment system in Iraq.

Read more:

If you replace one note for another, doesn't that leave the same number of notes in circulation?

Again I think they are speaking bring trillions to billions. If they RD the number of notes is around the same. If they do what this translation says the number of notes would be raised by 1000 percent.

[speculatorsRIDE]

There is no other way this article would make any sense unless something is jacked in the translation. They have to mean they will print 30 trillion worth (old currency) of new currency. Has to be. 30 trillion in lower denoms would be like what..... 1 trillion notes or something. I dont know the exact math but I dont see that happening. I think the same thing is going on with the 500 and 1000 coin articles. Meaning .50 and 1.00 coins new currency. I asked in another thread that if anyone was good with translator programs that maybe they could look into it.

Again I think they are speaking bring trillions to billions. If they RD the number of notes is around the same. If they do what this translation says the number of notes would be raised by 1000 percent.

Not wanting to argue dinarck, but replacing 1 note for another does not reduce the number of notes in circulation. Not sure how you figure the number of notes would increase by 1000%. I didn't get that at all from this article.

[BlueOrchid919]

Ok so each 25,000 will be replaced with a 25, each 10,000 replaced with a 10, each 5,000 replaced with a 5 etc etc.

If this is what they intend to do, then how will this reduce the number of notes in circulation? This is what Saleh said:

Saleh estimated the government will exchange more than 30 trillion Iraqi dinars, or more than $26 billion dollars. The most important change after deleting the zeros, is to reduce the number of banknotes in circulation, simplifying the payment system in Iraq.

Read more:

If you replace one note for another, doesn't that leave the same number of notes in circulation?

By educating the people to use the banking system....bank (debit) cards....ATM machines....electronic banking....

The Iraq National Development Plan 2010-2014 addresses the need for electronic banking, moving away from a cash based system. This is to be implemented when they implement the new currency for old currency redenomination. By moving away from a cash based system, they also remove banknotes from circulation. Ergo: reduction of currency.... Their plan is for this to take many months...up to 2 years according to Shabibi. Possibly longer as found in the latest Dev Plan.

[pokerplayer]

If the CBI is going to re-print 30 trillion dinars, that means NO LOP. If they were going to lop, then they would only need to re-print 30 billion dinars.

Good catch Rabbi, I missed that totally myself. While I have no idea what it may mean, I liked the fact you noticed that so quickly. +1 for Impressing me.

pp

[dinarck]

Not wanting to argue dinarck, but replacing 1 note for another does not reduce the number of notes in circulation. Not sure how you figure the number of notes would increase by 1000%. I didn't get that at all from this article.

I dont want to argue either. Lets have a honest discussion. Well if they print 30 trillion in lower denoms they would have to print 1000 new 25 notes for each of the 25,000 notes 1000 new 10 notes for the 10,000 notes and so on. True they will only have to print 100 of the new 5 notes for the 500 note but you would think they would print a whole lot more of these the same that the US does with 1s and 5s. Anyway you see where I am going.

Also I agree. Even if they RD and exchange a 25,000 note for a new 25 note there are still the same amount of notes in use. That is why I was saying that the translation has to be off. I mean they are saying in the same article that they will print 30 trillion in lowers and reduce the amount in circulation. Doesn't jive. I think the translation is off and they are saying they will print 30 trillion "worth" (old currency rate) of new currency. When they say reduce the amount of notes I think it means the amount in circulation meaning trillions to billions. What do you think?

[tamiflyer]

30,000,000,000,000/26,000,000,000=1154

No real change in value. Just more smoke and mirrors here. GLTA and Go RV.

[speculatorsRIDE]

I dont want to argue either. Lets have a honest discussion. Well if they print 30 trillion in lower denoms they would have to print 1000 new 25 notes for each of the 25,000 notes 1000 new 10 notes for the 10,000 notes and so on. True they will only have to print 100 of the new 5 notes for the 500 note but you would think they would print a whole lot more of these the same that the US does with 1s and 5s. Anyway you see where I am going.

Also I agree. Even if they RD and exchange a 25,000 note for a new 25 note there are still the same amount of notes in use. That is why I was saying that the translation has to be off. I mean they are saying in the same article that they will print 30 trillion in lowers and reduce the amount in circulation. Doesn't jive. I think the translation is off and they are saying they will print 30 trillion "worth" (old currency rate) of new currency. When they say reduce the amount of notes I think it means the amount in circulation meaning trillions to billions. What do you think?

My original post on this thread was a response to BlueOrchid919. Just pointing out that it didn't reduce the number of notes in circulation. It is my opinion that we are very very close to the end of the ride. These articles coming out are exactly what we expected to see at the end of the ride. Lot's of smoke and mirrors. You and I agree, I believe, that this article contradicts itself and is nothing more then BS.

[estewart]

I like your explanation much better than mine! Even so.... they will need to print a large supply of NEW currency to introduce while at the same time removing from circulation the OLD currency as it gets back to the banking system....from merchant, to bank, to removal from circulation....

Thanks!

That's it.

[MrFnHappy]

Saleh estimated the government will exchange more than 30 trillion Iraqi dinars, or more than $26 billion dollars. The most important change after deleting the zeros, is to reduce the number of banknotes in circulation, simplifying the payment system in Iraq.

Read more:

I don't see where it says they will print 30T dinar. It says, they will exchange 30T dinar.....for what, "to reduce the number of banknotes in circulation". The number of notes is not specified.

Edited August 5, 2011 by MrFnHappy

[Munsch]

already posted. thanks anyways carla. .

Can you give a rabbit a carrot and at least throw in the website of where it is already posted please instead of just saying?

[estewart]

"The most important change after deleting the zeros, is to reduce the number of banknotes in circulation, simplifying the payment system in Iraq.

AND how does one do that? How does one reduce the number of banknotes in circulation without destroying business activity?

Simple.

Debit card.

[tacson]

I don't think you get it. Replacing a 25,000 bill with 100 250s is not "reducing the number of bank notes." It's increasing it by a factor of 100.

I dont think you get it. They are not going to screw the people out of a good sound investment. Especially when the international bank including the US is holding Trillions of there money. They are not going to replace your 25000 note for a 25 note. How stupid can you get. If it is one thing i have learned is that international bankers willllll getttttt thereeeee wayyyyy. Duh.

I think you may be missing the point yourself.... the replacement will be a 25,000 dinar note for 1 NEW 25 dinar note. One old note for one new note. The NEW currency will be created at 1000:1 as stated in the news articles. Removing 3 zeros...just like in other countries: Mexico, Turkey, Argentina, etc.

NO, NO, NO, NO. OK you trade your 25000 notes in for 25 note. Go right ahead, screw yourself. I mean i will not be mad at you because you don't understand. In fact give me your 25000 notes and i will be more than happy to give you 25 for each and every note you have. I mean if you really want to believe that. When it revalues, loose my phone number because i am not the one who believes all the bs about he RD. hahaha all the way to the bank.

[BlueOrchid919]

I dont think you get it. They are not going to screw the people out of a good sound investment. Especially when the international bank including the US is holding Trillions of there money. They are not going to replace your 25000 note for a 25 note. How stupid can you get. If it is one thing i have learned is that international bankers willllll getttttt thereeeee wayyyyy. Duh.

NO, NO, NO, NO. OK you trade your 25000 notes in for 25 note. Go right ahead, screw yourself. I mean i will not be mad at you because you don't understand. In fact give me your 25000 notes and i will be more than happy to give you 25 for each and every note you have. I mean if you really want to believe that. When it revalues, loose my phone number because i am not the one who believes all the bs about he RD. hahaha all the way to the bank.

Ok, no worries. I simply based my opinion on the many other 'removal of zeros' (redenomination) that have taken place in other countries all over the world. I guess Iraq will be different and not do theirs like that (even though Shabibi himself has said they will). I do understand. The IQD will increase in value 375,000%. I get it. Yep, 375,000% percent.... I get it. Duh....silly me!

Edited August 5, 2011 by BlueOrchid919