1-28-13 SWFloridaGuy: Iraq already has revalued. The question is if they are going to do it again and how high of a rate they can support. A month ago the Secretary General of the UN said that regarding compensation, "The Board of Directors of the Compensation Committee of the UN noted Iraq's commitment to fulfilling its obligations," and expressed that appreciation continued to the GOI and the Committee of Financial Experts Iraqi for their continued cooperation with the Compensation Committee.
We can look at that in 2 ways, it's either saying they're just going to continue to work with them as they have been or they are working with them on a plan right now. The timing sure does feel good for them to make a move now. Whether that's a small move or a drastic one, who knows. We've seen on par with the USD mentioned many times though. We all already recognize Iraq's potential if you look at their history.
1949 - US$4.03 = 3.58134g gold Iraq. Then they changed the rate changed from fixed to a hard peg.
1967 - US$2.80 = 2.48828g gold.
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1971 - UK£1.166 = 2.48828g gold (nominally). Gold convertibility for all countries ended in practice when the United States abandoned the gold standard on 15 August 1971. So, Iraq unpegged from the USD and remained to the pound until December when they repegged to the USD after the United States devalued the dollar against gold.
1972 - US$3.04 = 2.48828g gold (nominally). Switched to the USD as the anchor currency.
1973 - US$3.3778 = 2.48828g gold (nominally). Did not follow the devaluation of the US dollar on 13 February 1973.
Since 1995 we've seen a rise from 3,000 to 1,164-1,166 which is pretty significant. The 2007 IMF international compact with Iraq raised interest rates in an attempt to allow a gradual appreciation of the dinar in an attempt to fight dollarization of the Iraq economy but of course they would never advertise that they had plans of a more significant rise and I don't think they should have announced anything. Just like I can't understand why Turki would say anything other than delete the zeros. That's what I would do.
I doubt they'll go international until the rate is much higher but that's just my opinion. What's interesting about their earlier years that they had a registered gold parity with the IMF. Since then, the Bretton Woods system has collapsed but they can still do a PEP or broad based commodity peg. Harvard, Yale and independent studies have all spoke of this. My point is that gold and oil are very important to Iraq's economy, which is convenient for us because they have such large amounts of both. This is why they are the fastest growing economy in the world.