Quote Originally Posted by tpiddy View Post
So this info is saying the oposite, right?
ISX-Data.com / The Unique Situation of the Iraqi Dinar


"
The Central Bank of Iraq (CBI)

The Central Bank of Iraq (CBI) was set up as an auction system, with the CBI sitting on the newly printed currency, auctioning older outdated dinars and other foreign currencies with Iraqi banks for new dinars. Now that the currency exchange has been completed, the CBI also sends nearly half of it's daily auction of dinars to foreign banks in Kuwait, Jordan and beyond.
If you go to the CBI official website you will see the daily auction, the currency is now primarily sold in exchange for US dollars. The CBI is slowly but surely acquiring US dollars to help back the worth of the dinar. Everyday the amount of dollars in it's vaults increases.
The exact number of dinars in print, in circulation or on hold at the CBI is exactly known. By doing some very simple steps, full control is achieved through:
  1. Limit the amount a person can bring with him if he is leaving Iraq, to a very small amount (in this case, 100,000 dinar);
  2. Knowing the exact amount sold to banks outside of Iraq.
Once you know the amount of dinars out there, viola, you have complete control over it's fate. The CBI simply sells more or less to hold the dinar in a position exactly where they want it to be.
Given this situation, the dinar will not strictly be pegged. It has been called 'pegged' by some, but in reality you will have some small fluctuations on the dinar value, which you have likely noticed if you have followed it over time. These fluctuations are a balancing act by the CBI.
Simply put, truly pegged currencies don't move from the currency it is pegged to."



i keep beating this dead horse, as i have 2 buddies that fight with me everyday about the cbi auctions....



That article is dated September, 2006. A lot has changed since then.

Yes, in the earlier auctions the CBI was doing both buying and selling of dinars. However, since last fall they have been primarily selling USD in exchange for NID. There has been very little (in comparison) NID sold for USD.