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Sudden decrease in the rate of the dinar against the dollar is concerned about the Iraqi market


Docneose
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This may put more pressure on Shabibi and Iraq to pull the RV handle

Sudden decrease in the rate of the dinar against the dollar is concerned about the Iraqi market

Posted: December 16, 2011 in Iraqi Dinar/Politics

Tags: Baghdad, Central bank, Central Bank Iraq, Economy of Iraq, Iraq, iraqi, Iraqi dinar, List of banks in Iraq

Iraqi businessmen said that the sudden decline of the dinar against the dollar during the past two days off from Kulagafi Find the Iraqi market, resulted in the start of a wave of foreign remittances and increase high levels of foreign exchange.

He said the owners of companies and economic institutions in connection with the “arenas of Liberation” on Thursday that the Iraqi dinar has fallen of 1117 dinars to the dollar to 1245 with the central bank cut of the sales of the dollar to less than ten million after it exceeded this figure in the rate of sales day of the U.S. currency about ten times or more.

Central Bank building in Baghdad and the Rafidain Bank

Businessmen stressed the movement draws vast financial witnessed Iraqi banks during the past two days by the companies and economic institutions as well as merchants and citizens, as they made clear that the simple drawings that institutions were banking imposed on the transfer of funds out of the country have risen to about five times because of the rising popularity of the conversion the money.

And linking the economists in the conversations between U.S. withdrawal and the escalation of divisions in the country, and fears that led to the devaluation of the dinar, as well as the country’s vulnerability to a wave of external demands may affect the cash reserve in case Iraqi lift the U.S. out to protect the Fund of Iraq’s money, which was estimated at about two fifths billion dollars.

http://bit.ly/v2Bpeu

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"Revaluing will strengthen the dinar."

While that's true, I don't understand why, when they are struggling to get investors into their country, they would revalue now and make foreign investment more expensive, thus less desirable. Certainly the value of the dinar will increase over time. But doing it suddenly right now doesn't seem to make sense.

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"Revaluing will strengthen the dinar."

While that's true, I don't understand why, when they are struggling to get investors into their country, they would revalue now and make foreign investment more expensive, thus less desirable. Certainly the value of the dinar will increase over time. But doing it suddenly right now doesn't seem to make sense.

That's why we're here... for a potential RV! Investors want a higher value dinar, not an undervalued currency. So, now is the time...

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Investors want a higher value dinar"

No, they don't. They want to get in for as little as possible, to reap the maximum rewards later. If I can buy some land and build a refinery in Iraq now for $10 billion, why would I hope for an RV that would mean it would then cost me $10 trillion to buy my land and build my refinery? Your reason for wanting an immediate RV is because you are investing in the currency, and it is the exact opposite of what someone investing in the country would want.

I've been investing in currencies for a long time. A lottery mentality never works. You want the country to succeed so that the value of their currency increases over time. I always invest with a ten year time frame in mind. YMMV, of course.

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Investors want a higher value dinar"

No, they don't. They want to get in for as little as possible, to reap the maximum rewards later. If I can buy some land and build a refinery in Iraq now for $10 billion, why would I hope for an RV that would mean it would then cost me $10 trillion to buy my land and build my refinery? Your reason for wanting an immediate RV is because you are investing in the currency, and it is the exact opposite of what someone investing in the country would want.

I've been investing in currencies for a long time. A lottery mentality never works. You want the country to succeed so that the value of their currency increases over time. I always invest with a ten year time frame in mind. YMMV, of course.

lol you might read what you type again, imo value rise u have more in your pocket. you take $10 Usd billion an get $10 billion Iqd which one you gonna have to get more of.

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I love how everyone "in the know" is claiming that the IQD is the STRONGEST currency in the ME.... Uhhh... Is that a joke??? Cause the way I see it, its NOT.... yet

I'm with you, Alex. Every time I see something touting the strength of the dinar I just scratch my head. Are we missing something here...? :huh:

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Maybe this story will help explain how it works:

When my son was a junior in high school, he was a foreign exchange student in Germany. They were still using the Deutsch mark at that time. And at the beginning of his year, the mark was very strong against our dollar. Let's just say it was 3:1, meaning it took three of our dollars to buy one mark. If he was used to having $500 (This is just for illustration, guys.) a month for his spending money, then I needed to wire 3 times the number of our dollars ($1500) to his Deutsch Bank in order for him to be able to get the equivalent of 500 of our dollars in marks. It cost me a LOT of our dollars for him to have the same buying power in Germany that he had here in the states. But by the spring, the mark had weakened against our dollar. Let's just say it was now 2:1. It only took 1000 of our dollars to give him the same buying power in marks as $500 here in the U.S.. It was better for me, but still bad in how much I had to wire him each month.

Now, if we were the German parents wanting to send our son or daughter who is the U.S. spending money for the month, and let's say that child was used to having enough money to be able to spend what $500 here would purchase, then at the beginning of the year, we would have only had to wire 166.67 marks for them to have $500 here. Their mark was a lot stronger against our dollar. It bought more. Then at the end of the year, the dollar got stronger and the mark was weaker so that we had to wire 250 of our marks for our child to have the same amount of spending money.

Thus, if the dinar is not as strong against our dollar (1 of their dinars for 2 of our dollars), then it takes less of our dollars to buy the same amount of goods as it would if their dinar is strong against our dollar (1 of their dinars for 3 of our dollars) just like my situation at the beginning of my son's year. So if we wanted to trade our dinars for dollars, do we want the dinar to be weaker so that we get $2 back or do we want the dinar to be stronger so that we get $3 back? I would prefer the stronger dinar. It would certainly buy more dollars than a weaker dinar. But an equal strength dinar to dollar or $1 dollar for 1 dinar would be just great, too. But if the dinar weakens in relation to the dollar, then we won't get as much $$$$ for our dinars.

So maybe that will help. When I received my dinars, they were worth $0.012 or one point two cents, a really weak dinar against our dollar. I want that dinar to be stronger against the dollar so that I will get more dollars back when I give them 1 dinar.

Now, I am not an ecomonist, so if I've mixed this up, please tell me how I need to change my thinking on the matter. But with my son for my own experience in changing international currency, it seems that this illustration makes sense.

cd :):)

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