Iraq to remove three zeros from the dinar
Iraq to remove three zeros from the dinar
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://www.albawaba.com/main-headlin...s-dinar-386838
WHAT DOES REFORM REALLY MEAN To IRAQI DINAR
Interesting,
Good question, and one that has been asked many times due to the massive confusion with all these articles being released over and over which always seem to be in conflict. As I see it, you cannot remove zeros without revaluing at the same time. Heck, people would need to have a pickup truck filled with dinar just to fill up with gas, so does that make sense. The dinar is almost worthless now, so imagine if the removed three zeros without revaluing at same time.
All these many statements over all these years and we are still confused as to what will eventually happen. Simply amazing, and I blame much of the confusion on translation issues. We here remove zeros for years, yet we never saw it happen. We hear reform used over and over, and nothing has happened. Now we hear of wanting the strongest currency in region, sure sounds good, then we heard new lower denom notes, sounds good, then new coins, obviously of even smaller denom, also good, but the thing I liked was reform, they have used this word many times, so I wonder what reform really means in Iraqi language? Could it mean restore currency to former value before devaluation in 2003? Or does it mean revalue? Guess we will all know soon. lol
Success to all, Mike
