_What everyone wants... it's not what you expect!
I think that persons familiar with the currency trade aspects of Forex would love to see the IQD posted the same way I would love to see APPLE split a few times so I could afford the stock!
Traders know it will come out at a rate (no matter where) and will be adjusted INSTANTLY to a market standard. From that point on, their trade rules based on charts, etc. and buy and sell points will become valid, and they can make money whether 1 dinar buys more today OR less tomorrow.
Forex wants this trading soon because they (can) make money on the mere trade... they don't have to hold the currency to complete the transaction and hopefully generate profit.
That is not true for the HOLDER of the Dinar though! HOLDERS of the currency require the purchasing value to increase, or they lose money. There is no break even, money must be transferred to have value!
What is often misunderstood is that Forex trades will have ZERO impact on the "in wallet" value of the Dinar for about a year!
Read More Link On Right
_ For ANY currency to be trade-able, the notes have to have a PRE-SET value and that is ALWAYS 1 = 1. That means the 1.00 Note = 1.00 in purchasing power.
Forex deals with the fluctuations in ESTIMATED FUTURE VALUE of the purchasing power, because they know that the currency will not always have the same purchasing power (it rises and falls based upon the base or basket or standard used to create the currency).
BUT REGARDLESS OF WHAT THE FOREX LISTING IS, 1 NOTE WILL ALWAYS BE WORTH 1 UNIT PURCHASING POWER and the same is true with ANY currency.
If they set the value of the Dinar at 1 Dinar = $10,000 USD then they will be forced to create notes or coins worth 1 millionth of that value to be able to buy bread and make change. The most common note will be the 1/10,000 Dinar note! If they set the value at 1 Dinar Note = 1 gumball then they will be lugging around dump trucks full of dinar to buy a Lexus.
Whatever they choose, they MUST have a currency in hand that relates to the purchasing value in a scale-able manner.
When we talk about RV it is about CREATING AND COMMITTING TO a NEW STANDARD that all future purchases (including Forex transactions) will deal with. Foreign holders of Dinar want that standard to be set high to guarantee they make money... but Iraqi's that use the dinar every day will get a one time bump... and from that point on, any dinar they need will COST more if the value is set high!
If the dinar is set at 1 now and tomorrow it is REVALUED to 3, they make money on what they hold. But when that money is spent they will need three times the dinar to get the same purchasing power! They need a way to afford the new valued Dinar without increasing costs three fold everywhere else (talk about inflation!).
And as a side note, I believe that since they are counting on the government to give them each a portion of the oil sales, then they are also counting on that to generate part of their livelihood! This is how I believe the government is planning on giving citizens a way to get the new Dinar and not cause massive inflation.
You can rest assured that Erbil is important.
Forex = Can make money no matter which way the dinar moves. Has no bearing whatsoever on the INITIAL rate. Changes initial rate instantly and constantly from that point forward. Usually it takes about 9-12 months for the Forex valuation to actually impact the average citizen's purchasing power... and it may go up!
Dinar investors = make money only if purchasing power increases and a one time new rate reflects that. Dinar holders CAN lose some of those gains based on how Forex responds to the initial rate.
Iraqi's = want easier accounting and fewer bills to lug around, and pride in currency. They are GUARANTEED TO Lose as much as they make on initial bump no matter how high it goes... unless secure and profitable investment options are available!
Iraqi's want a high INITIAL valuation and massive infrastructure investment opportunities. Raising the rate slowly will kill them... literally. Inflation is impossible to overcome when investment opportunities are not available that allow you to overcome the loss of purchasing power.
Without the ability to overcome inflation it is impossible to create wealth, and without true wealth there will not be investment, taxes, trade, or a currency that is respected or traded easily.
If CBI announces a rate today, they better have the very next comment be about massive infrastructure investment opportunities and banking laws regarding personal financial security (Erbil), or FOREX will slam the bejesus out of the Dinar in about 1 minute.