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Central Bank reveals details of the Iraq Currency


Aqua Dude
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It is an interesting issue though, once you go internationally traded upon whichever rate you enter the market with, it may suppress or appreciate the value..

If the value goes up too fast, they have to flood the market w/ more IQD. More IQD has to be printed to meet the additional demand.

As of now, they have enough... Imagine what they could realistically do if they really have only 6.38T in circulation w/ 2T still in reserves.

None of us are professionals here, we're just speculating, hoping, etc.

As per your article? I bet it was rather difficult to invest in their economy at this moment. Abiding laws, policies, and other issues (let alone stability, security, etc).

Will their rewards outweigh their risks?

But the question on whether it will appreciate or not in the market comes down to whether Iraq changes the way they value their currency or not.

They have never had a market driven currency, and instead hard pegged their currency to either the GBP (early days) or the USD.

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But the question on whether it will appreciate or not in the market comes down to whether Iraq changes the way they value their currency or not.

They have never had a market driven currency, and instead hard pegged their currency to either the GBP (early days) or the USD.

Which is the downside of our situation. If they continue to follow their current monetary policies, we won't see any adjustments even after a re-denomination.

The only money made by investing in IQD is to have a Warka accoutn & collect interest or play the ISX.

So, unless they change their policies... We could potentially be S.O.L

The rate would likely adjust, but slowly over time.... (Maybe staying on pace w/ the GDP, production, and private sector growth).

We would maybe see some adjustments after the re-denomination is completed. This would mean, the 000s are no longer valid or recognized. What the CBI would do, is re-assess what their entire liabilities are and adjust the rate accordingly. This would likely be done by doing an interior audit.

Now, if a good portion of the 000s never made it back to the CBI, it doesn't necessarily mean they'll adjust the rate to match it accordingly.. They could just as easily print more currency or distribute more currency to fill that gap completely leaving the exchange rate alone.

Or, they can re-vamp their monetary policies and we are talking a whole new ball game.

Heck - the GOI & CBI could not allow any foreign IQD beyond their borders upon the exchange process.... Making claims they're trying to prevent counterfeits from making it to the CBI... And basically sucker-punch all of us fools who speculated.

We will likely get back 60% of what we initially invetested. If they come out of the gate upon a R/D and rate adjustment to create incentive to use IQD over USD, we may recoup some of our losses. Unless that rate reaches roughly $1.35++ we may be lucky to break even.

If they don't do an initial R/V w/ their R/D - I'm jumping ship, because I doubt they do it in the middle of their transitional period. If anything, they'll do it at the end of the project. Which may make lower denominations more appealing. But I would advise to completely avoid using dealers as they have high mark-ups.

I've heard many theories (optimistic & pessimistic)... I've heard great arguments from both sides.. Each side can have a rebuttal played against them. RD camp, or RV camp, no one knows. I am prepared for the worst, yet hoping for the best. My thoughts have not really changed, but I try to stay realistic when posting... :)

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I've heard many theories (optimistic & pessimistic)... I've heard great arguments from both sides.. Each side can have a rebuttal played against them. RD camp, or RV camp, no one knows. I am prepared for the worst, yet hoping for the best. My thoughts have not really changed, but I try to stay realistic when posting...

Don't we all. But I am believing in the best, I wonder if trying to stay realistic is not measured by the glass half empty.

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The CBI Law states there must be an "equivalent exchange" when exchanging old currency for new currency. Some people think that law does not and will not apply, and instead of the 25,000 Dinar equaling $21,000, it will still be worth $21.00.

Does it say that, Markinsa? Because I cannot find that exact wording in my copy of it. If you have a link for this, would you please post it? Thank you!

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Does it say that, Markinsa? Because I cannot find that exact wording in my copy of it. If you have a link for this, would you please post it? Thank you!

It's under Article 36 Redemption of Currency in the 2004 CBI Law at this LINK.

It doesn't state "equivalent exchange", but rather "equivalent amounts", which would be specified through a regulation by the CBI.

Edited by HopefulTxn
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Does it say that, Markinsa? Because I cannot find that exact wording in my copy of it. If you have a link for this, would you please post it? Thank you!

http://www.cbi.iq/do...CBILAW-EN_f.pdf

Page 19 of the pdf

Article 36 Redemption of Currency

1. The CBI may decide to redeem banknotes or coins by issuing, free of charge, other banknotes or coins in equivalent amounts. A decision to redeem banknotes or coins shall be issued in the form of a regulation of the CBI specifying the period during which the exchange shall take place and the locations and times at which withdrawn banknotes or coins shall be presented for redemption.

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I agree, I don't think anyone has an issue with those numbers. What they have an issue with is what a 25,000 Dinar note will be worth, when a 25 dinar note is worth $21.00. The CBI Law states there must be an "equivalent exchange" when exchanging old currency for new currency. Some people think that law does not and will not apply, and instead of the 25,000 Dinar equaling $21,000, it will still be worth $21.00.

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If a 25,000 note is worth $21.00 now, then replacing it with a 25 note worth $21.00 would be an "equivalent exchange" no?

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If a 25,000 note is worth $21.00 now, then replacing it with a 25 note worth $21.00 would be an "equivalent exchange" no?

Let's say you go with that, then the CBI could use any standard, the exchange rates for British Pounds, Kuwaiti Dinar, or any other currency to establish what the equivalent would be.

But really, what do you think the actual intent of the Law is?

I believe the intent of the Law is to exchange 1 Dinar in new notes for every 1 Dinar of old notes.

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Where did you guys get the idea that this RV is about helping the world's economy? The CBI has said consistently that the purpose for the new currency is to ease cash transactions. When did they provide any other reason for it? Currencies are revalued and re-denominated all the time for the sole purpose of easing cash transactions and strengthening value. Improving the world's economy is the job of the IMF, the World Bank, and the G20 not the CBI.

Edited by Sam I Am
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Let's say you go with that, then the CBI could use any standard, the exchange rates for British Pounds, Kuwaiti Dinar, or any other currency to establish what the equivalent would be.

But really, what do you think the actual intent of the Law is?

I believe the intent of the Law is to exchange 1 Dinar in new notes for every 1 Dinar of old notes.

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that would be sweet, so just so I am clear, (my head is more muddled than usual tonight) Let's say they change the currency, you think they would give us (25) 1000 notes for each 25,000 note (or something to that effect)?

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