[SWFloridaGuy] There was an excellent article released. "The Iraqi Parliament and the Finance Committee supports the Central Bank of Iraq (CBI)’s efforts to revalue of the Iraqi Dinar through the removal of three zeros from the currency. The removal of three zeros is expected to raise the value of the Dinar as well as facilitate dealing with the currency and the payroll system in the country."
No country has ever accomplished what Iraq is about to. They have reached this stage with a lot of help and I propose this is by design and all part of the ingenious reconstruction plan for Iraq. Economic policy is influenced by international capital markets and also by foreign central banks. This revaluation is how the government of Iraq will reassert monetary sovereignty, dedollarize and give the citizens confidence in the national currency.
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[SWFloridaGuy] Many overlook the psychological aspect and simply focus on the economic implications. Establishing their credibility is also a major factor, not only with their own citizens but also with international capital markets. Iraq must revalue their currency if they ever hope to be respected as a borrower and a location for private investment in the eyes of global capital markets. This is NOT going to be a case of redenomination. The Iraqi dinar is not being recalibrated due to years of struggling with hyperinflation. They are one of the wealthiest countries in the world and soon their currency will reflect that. These foreign central banks that have invested so heavily into the reconstruction of Iraq will prosper and Iraq's debts will be paid.
[SWFloridaGuy] FACT: Democratic governments only redenominate in response to hyperinflation. FACT: Authoritarian governments only redenominate in the presence of civil conflict. Neither of these conditions describe Iraq. I believe once the zeros are removed from the IQD the large notes will retain their value. I also believe a rate somewhere on par with the USD is realistic. Anywhere close to equal the USD would make it a historic revaluation. In my opinion this has all been part of a very well-orchestrated plan and the end result will be a very favorable outcome for all parties involved. We will see the removal of the zeros and a simultaneous revaluation of the currency.
[SWFloridaGuy] Locally the currency may be exchanged at branches of the Rafidain and Rasheed banks. The Iraqis will have a time limit to deposit all their dinars to facilitate the change into the lower denoms. Iraq is positioning themselves to become economic leaders both regionally and globally and no longer will they be isolated from the international community. Iraq got to where they are today with a lot of help. They received this help, not because they are a charity case, but rather because (like we do) others see Iraq's potential. Therefore in order to profit themselves, they have been willing to offer assistance in the reconstruction, rebuilding the infrastructure and revitalizing the banking sector, thus helping the CBI institute the framework for a functioning monetary policy that achieves stability. Simply put, a revaluation is an upward change in the currency's value and that is what is on the horizon for the Iraqi Dinar!