Thread: Monetary policy to delete the zeros of the Iraqi currency

Thought I would put this here where everyone hangs out. How do you interpret this?

Monetary policy to delete the zeros of the Iraqi currency

Iraqi Central Bank is working on a strategy to delete the zeroes of the Iraqi currency in and out of their face value while maintaining the values of cash and purchasing power.

Central Bank of Iraq adviser to the appearance of Mohammed Salih said that this year will witness the launch of this strategy, stressing that the bank has completed 50% of the preparations that are working on since 2005.

Salih said the strategy was based on the principle of gradual substitution of the Iraqi currency with another is lower than in the nominal value, and pointed out that the positives of this strategy is that it will be less expensive and easier to trade.

For his part, sees Dr. Hilal Al-Tahan, that the application of such a strategy will not cause economic turmoil, or damage to the local market at the present time, while the economic analyst is willing to find satisfaction بليبل that the timing of the launch of this strategy is not appropriate, noting that the country's economy must be in a position of strength before the application of such changes.

http://www.iraqhurr.org/content/article/1946613.html

on face value, reading it sounds crappy... but as we know..so many stories and ideas floating. I refuse to believe this will end crappy for us!

Hi Friends!
That was an old article that was refreshed several days ago. The longer you hang around this saga the more you will become skeptical of anything that sounds like a "looping" or, "lop" of the IQD. Ain't gonna happen.. It has been disputed by Shabibi himself. (S runs the CBI- he is the Top Dog when it comes to the IQD.)

Thanks al.. Been in this so long, seems we have reached a point where "older" articles have started to recycle and trying to put a fresh spin on them. Oh where is the SD $0.18 when you need it,,LOL Hope everyone has a safe, warm and Blessed weekend. Looks like I get to shovel snow again... I left Florida for this guys.. tells you how smart I am... 67

This is how I intrepret what will happen but hope that it does not.

What is being said: Cancel the zeros and return the dinar to former value.

Example: 25000 note minus the three zeroes is now 25 x 3.35 new rate equals $83.75 US

ugh..that would suck =(

well, I mean would still be a nice return, but..um..yea.. suck

Iraq Planning Currency Redenomination

BAGHDAD -- The Iraqi Central Bank is planning to redenominate the national currency in an effort to ease transactions and allow people to carry less paper money, RFE/RL's Radio Free Iraq (RFI) reports.

Mudhhir Muhammad Salih, a member of a Central Bank advisory panel, told RFI that a plan has been made to remove three zeros from the currency and phase out the current banknotes late this year.

Salih said by the end of 2010 the new banknotes will be fully introduced while the old banknotes will be gradually removed from circulation. He did not specify when the new notes would be issued.

Both will be legal tender in Iraq until the old notes are completely withdrawn.

Iraqi officials have had a long-running plan to redenominate the Iraqi dinar. In 2006, the Finance Ministry recommended to the Central Bank that it carry out such a plan.

Salih pointed out that banks are having a hard time accepting cash savings and deposits, but by dropping the zeros it will make it easier for both the banks to deal with their customers and for the general public to carry money. He said some 80 percent of Iraq's money supply is cash in circulation.

Salih added that in 1990 the value of banknotes in circulation was about 25 billion Iraqi dinars but is currently some 25 trillion dinars.

Economic analyst Hilal al-Tahhan told RFI that the bank's move is overdue. He said he expects the currency change to go smoothly because of the decision to allow both the old and new banknotes to coexist, leading to less turbulence in the economy.

The current exchange rate is 1,167 Iraqi dinars to the U.S. dollar.

http://www.rferl.org/content/Iraq_Planning_Currency_Redenomination/1950504.html

so what exactly does that mean?....if they keep both the new denominations and the old ones,which we hold,will our 25,000 dinar bill be worth the same as a 25 dinar bill?....is that what they are saying?....anybody knows exactly what that statement by Salih with the Central Bank means??....help????....lol...Pat

of course until it happens, everything is specualtion.

25,000 dinar bill be worth the same as a 25 dinar bill?

but that wouldnt make sense. I do believe they intend to reward the surviving Iraqi people

They will, as we now do have that confirmation, announcement today, issue new low denoms.. 5, 10, 20

and both will be in circ. I cant see any logic suggesting that the 25k notes would magically be only worth the same as a 25 note. They plan to pull in and get of the street so to speak, the large denom bills. But I firmly believe the RV is a straight across the board RV

I still completely, and intuitively, believe that those of us holding large denoms, will be made rich!

go go Dinars!

Well here's how I understand it: if they remove 3 zeros from the current currency, so that a 25,000 dinar bill will be worth 25 dinar in the future, they will have to increase the value of the dinar accordingly. Otherwise everybody who owns dinars today would loose a lot of money and this can't be intended. As the article says today it's 1,167 Iraqi dinars to the U.S. dollar. If I calculated it right (I'm not a maths genius...) the exchange rate would have to rise to a minimum of 1.167 dinars to the dollar in the future, so our dinars would still be worth the same.