Parliament’s (time): Central plans to change the current currency
BAGHDAD – Shaima Adel - Confirmed the parliamentary Finance Committee approved the proposal of the Central Bank in order to reprint a new series of banknotes and change the images, while the central bank began to re-print the banknotes in Iraq…
…He added that the (current notes will continue trading with the new will not be pulling them now or in the future… (Article Link at end of Commentary)
TLAR Commentary ~ From Dinar Updates
The CBI under Shabibi decided early on at the end of 2010 that they were going to re-print the small denominations, fils through the 100 dinar denominations.
In 2006 at a strategic meeting the CBI had let it slip that they had actually printed 14 different notes on the original printing in 2003 but they had only released 7 of them.
TLAR Continues: They had decided to reprint the smalls based on the fact that the original notes were printed like the same ones in circulation and were two easy to counterfeit.
Also they had promised the Kurds that their language would also be added to the notes making the new smalls have three languages represented on them instead of just Arabic and English as was done on the original printing in 2003.
The CBI under Shabibi had envisioned pulling as many of the 5000, 10,000 and 25,000 notes as possible before they actually deleted the zeros, so in April of 2012 an intense program began with the CBI keeping every big 3 zero note that came into the bank and only releasing the 250, 500 and 1000 dinar notes back as they came in.
Shabibi also had no intentions of re-printing the 250, 500 and 1000 notes, deciding that these notes would be the crossover notes into the new smalls.
In other words these would be the notes still circulating at the time they deleted the zeros and these notes would be allowed continue to circulate until eventually all of them would be traded into the bank for new smalls.
It was a good plan to transition from the large notes to the small denominations and the CBI is still following it today, removing the big 3 zero notes and releasing only the 250, 500 and 1000 from banks.
In 2012 for many reasons the rate of the dinar drifted down. Because of counterfeits in the market, the condition of real bills and pressure buying of USD over market by hard currency starved Iran and Syria, the rate of the dinar actually went down on the street.
The official program rate was still 1166 but on the streets the dinar was bringing as much as 10% less. This was mainly caused by Iran who was willing to pay anything it had to over the program rate to purchase USD to stay afloat. Their own currency had collapsed with the sanctions.
Many of the dollars Iran bought out of Iraq were bought with bogus counterfeit dinars and this was a major concern to the CBI and citizens alike.
Iran is a sophisticated state sponsored counterfeiter. For years they printed the US $100 dollar bill earning the title “super bill” due to the fact it would pass most all bank detectors as real.
The US has spent billions of dollars and redesigned and re-printed our bills many times to finally make our currency too complicated for Iran to effectively print our money anymore.
In 2010 the US let Iraq know that Iran had begun counterfeiting the currency and that Iran was setting up networks of phoney companies and organizations to pass counterfeit dinars throughout Iraq.
The sole purpose of these Iranian entities was to sell dinars, real and counterfeit, for US hard currency. Maliki’s government did nothing to stop it choosing to turn a blind eye to it. That is another subject for discussion.
So why am I telling you this? The CBI has made a strategic decision to re-print the 250, 500 and 1000 dinar notes before they actually delete the zeros giving them value.
They too will have all the new features making it almost impossible to counterfeit including a raised portion of the bill that will allow the blind to feel the denonination of the bill.
One of the complaints alot of government MP’s have had which has stalled this project is “mafias (Iran) were prepairing to rig the currency.”
What the CBI fears is that when they delete the zeros using the 250, 500 and 1000 notes as the crossover notes to the new uncounterfeitable smalls, Iran will immediately start printing the old notes and they will flood the market with these counterfeits buying USD at a higher rate.
So the CBI has decided to reprint these notes while they have no value and either release them at the same time as the smalls or a little before they release the new smalls.
Iran has been counterfeiting the large 3 zeros notes exclusively (5000, 10,000 and 25,000 notes) because of value. The lower notes the 250, 500 and 1000 up until now have values less than a dollar so they haven’t been worth Iran’s time or money to counterfeit.
When they delete the zeros this value will astronomically go up and Iran is ready to counterfeit them. Because of the sophistication of Iran’s distribution system, within a week Iran will be selling these new couterfeits into Iraq. So the decision to re-print these bills is a prudent one IMO.
There are many economists in Iraq that feel this is an unnecessary expense and suggest that the CBI just delete the zeros and collect these notes along with the rest of the large three zero notes at the same time.
This argument also has merit but for reasons unknown to us the CBI has decided to re-print these notes choosing to follow Shabibi’s original plan which called for them to be left in circulation to die of natural causes.
The good thing is every article says that all dinar currency of any denomination put out will be good forever. Some of the articles indicate this printing is being done now. Some indicate it is already done and ready to go. We are close.
Parliament’s (time): Central plans to change the current currency LINK