11-16-12 LoriC: The U.S. Secretary of State in the Bureau of Democracy, Human Rights and Labor Thomas Melia has been involved in 20 meetings during the past 3 days regarding Iraq's emergence as a sovereign democratic government and to promote human rights. A year after the withdrawal of U.S. troops from Iraq they are being helped along so they can be released from Chp7 sanctions and be fully sovereign.
Melia said that many are trying to pressure the government in order to continue the process of reform and push forward democracy forward. Iraq isn't receiving all this support and pressure to catch up to international standards because everyone has a bleeding heart for them. As the IMF stated, Iraq will be a tool for global economic recovery because they have not been affected by the economic crisis. Iraq may be content with procrastination but the rest of the world is not.
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1-16-12 Highlander: My understanding is this. If they issue a brand new series of notes to replace our current notes then they have to honor the value that our notes had which of course is currently 1166 dinar per dollar and the new series would carry the new value.
If they issue additional notes to the current series then our notes would carry the new value. Yes they are legally obligated under the IMF Charter to honor their currency and I see no reason that Iraq won't do so.
Of course the method that they choose to do this process under is the outstanding question. I hope this helps.
Article IV: Obligations Regarding Exchange Arrangements Section 1. General obligations of members. Recognizing that the essential purpose of the international monetary system is to provide a framework that facilitates the exchange of goods, services, and capital among countries, and that sustains sound economic growth, and that a principal objective is the continuing development of the orderly underlying conditions that are necessary for financial and economic stability, each member undertakes to collaborate with the Fund and other members to assure orderly exchange arrangements and to promote a stable system of exchange rates. In particular, each member shall:
(i) endeavor to direct its economic and financial policies toward the objective of fostering orderly economic growth with reasonable price stability, with due regard to its circumstances;
(ii) seek to promote stability by fostering orderly underlying economic and financial conditions and a monetary system that does not tend to produce erratic disruptions;
(iii) avoid manipulating exchange rates or the international monetary system in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage over other members; and
(iv) follow exchange policies compatible with the undertakings under this Section. Section 2. General exchange arrangements
(a) Each member shall notify the Fund, within thirty days after the date of the second amendment of this Agreement, of the exchange arrangements it intends to apply in fulfillment of its obligations under Section 1 of this Article, and shall notify the Fund promptly of any changes in its exchange arrangements.
(B) Under an international monetary system of the kind prevailing on January 1, 1976, exchange arrangements may include (i) the maintenance by a member of a value for its currency in terms of the special drawing right or another denominator, other than gold, selected by the member, or (ii) cooperative arrangements by which members maintain the value of their currencies in relation to the value of the currency or currencies of other members, or (iii) other exchange arrangements of a member’s choice. Read more