6-12-2012 Gypsy Vardo: Nominal value of a currency of a country is not measued by either of those two numbers. Simplistically put, it gets down to the law of supply and demand; a country's Central Bank has to support it's value through a series of auctions to buy and sell its own currency to support the value it wants.
A country might want a low value (like China to support its exports, Japan, too). We see the value of the USD falling like a rock because we are "printing money" like crazy, read over supply for the demand. The Central Bank manipulates its currency to support the national agenda. I guess the question is why would Iraq want a 'high' value for its currency. The supporters of 'the Plan' would say its all about a currency that won;t actually be in circulation and held in "reserves".
That gets a little beyond by ability to connect the dots if that would legitimately and to what degree keep the supply of IQD at an artificially low M1 and M2. In the real world, nominal values of currencies is a real tug-a-war between Central Banks and investor/speculators. If Japan thinks the USD is too rich for the Yen, it either buys Yen or sells USD. Currency values are the cumulative effect of the entire global market at work. Shabibi has to 'defend' the value by buying/selling the IQD to keep it within its range fo value. Iraq has been reducing its M1 to barely sustainable levels in its country. All of the IQDs out in the rest of the world will never see the light of day, but become currency reserves in other Central Banks and maybe used to settle oil payments, but are not destined to hit the market, so to speak.