D42 Here's a question, if they stop the daily auctions and don't immediatly impliment a new exchange regime (float or other), won't they be loosing 10's of Millions per day they were receiving from the auctions?
How long can they take that kind of hit? Dinar4two
Rockstar No they will not they only make a small spread difference as a commission.
Rockstar Continues It still significant but I think they mainly used those profits to keep the dinar stable and build up their reserves while pulling the dinar off the streets.
Hopefully this is it and they have pulled all the dinar they expect too and now are ready to increase the value tomorrow!!! That's what I hope anyway!!!
Tlar If they do RV, the 32 exchange banks in Iraq will be buying dollars from the citizens as they push new dinar out. The process will only be reversed but the commissions should not be any different.
In fact initially it should accelerate profits. The banks that will be putting out the new dinar will be getting dollars in.
The push to de-dollarize and use dinar exclusively leaves these bank selling those same dollars they are collecting back to the CBI as they are accumulated.
The CBI will charge a small % to buy these dollars from the 32 exchange banks as they put out dinar, just as our Treasury will charge our banks to purchase the dinar we sell here to the banks.
It will become the normal course of business and a replacement of the existing profit center to buy these dollars without the use of auctions.
They will be attempting to mirror image the global banking system where anyone can freely walk in to any number of banks here in the US or around the world, selling any international currency, and freely swap it for the home countries currency.
This will become true for the dinar once it becomes an article VIII currency. You will be charged a fee so the buying bank makes money.
The CBI will also charge a fee to the buying bank by way of discounted purchase price on these dollars, and the CBI will be the holder and broker of those currencies just as our Treasury does for Chase or B of A, the two entry points for foreign currency into our Treasury.
So even with the auctions disappearing and de-dollarization just around the corner, both the CBI and the exchange banks stand to make substantial profits putting the dinar out trading for foreign currencies as they come in. tlar