Posted by BNA13: Breakin' It Down - Exchange Rates
Around here and across Dinaro World when you hear the term "exchange rate", the discussion is almost exclusively about currency. And sometimes the talk is about the EUR, or GBP, but 90% of the time it's about the Iraqi Dinar and it's exchange rate to the US Dollar..
Currently there exists only one exchange rate between the IQD and the USD. But it can be expressed in two different ways. For example, One Dollar US will buy 1166 at the CBI. It is written 1:1166. Of course we can't do that, so we get a lot less for our buck, but that's another story.
If you want to show how many dollars a single dinar will net ya, it's written like this, 1:.00087 (or there abouts). One rate, two expressions. 1:1166, 1:.00087 (or so)
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Now I know most of you guys know this already, so here is the point. When the big day arrives, we will have a total of three currencies to deal with, IQD, USD, New Lower Denoms.
As each of the three will have a relationship to the other two, we will have (3) exchange rates to talk about. And when we are bloviating as I'm doing now, or we are reading or listening to someone else's bloviation, it could get confusing if the subject is not made clear.
Already we are seeing the confusion after just a few articles from the CBI started to talk about a second exchange rate.
Here are the 3 rates we will be dealing with.
1. The original. IQD:USD, Meaning "000" currency to USD.
2. Old Currency "000" to New Lower Denoms. Let's say IQD:NLD
3. New Lower Denoms to USD. NLD:USD
Now of course, these rates can also be expressed two different ways once the numbers materialize.
So if this helps, I'm happy. If you are confused, just ask, I'll try again. If you understand and agree, let me know. If you understand and disagree, please point out the error of my ways.