5-29-13 SWFloridaGuy: "Central Bank begins next month, the application of measures to reduce exchange rate volatility. Will begin implementation of a package of measures designed to restore the exchange rate of the dollar against the Iraqi dinar to normal."
It's hard to hear more encouraging news than this if true and considering the abounding amount of analogous reports we have received inferring similar news, I'd say for once I'm a little excited about what could happen in the very near future.
We'll just have to hope for the best and wait and see as usual. The news appears to be sensational but don't bother reserving a seat for me on the roller coaster just yet.
I do have two questions however ... why would they announce this to the world beforehand and how does one determine the exact nomenclature of what the phrase "normal" means in this context.
It's hard to imagine that this doesn't mean a rise to where it was before it became practically worthless and that they are moving toward a more realistic, competitive rate somewhere on par with the USD.
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Others will claim this means $3+, double digits etc. Yes, I understand it held a very high value decades ago but remember that was also a different currency.
On a positive note they have only increased their wealth since then but I still don't believe that initial high-rate theory to be realistic for one second. I can't imagine they could maintain that long term stability without eventually leading to the collapse of their economy.
Only after time and letting the market drive the rate up could this be achieved, which is entirely possible. Also, for those of you who say 1 to 1 is a small RV, please keep in mind that is a 100,000% increase overnight and the largest previous RV in history was Romania at around 40%. So, although Iraq has far more potential than previous countries who RVd, let's keep things in perspective.
There is also another theory presented by the lopsters claiming we are misinterpreting this completely. I'm not here to judge them for their opinion but I choose not to believe this.
I won't list the reasons why because I'll end up writing another 3 page post and at the end of the day, I have to be humble enough to admit that I can't guarantee that they are wrong (although I do disagree with them). I am excited to see what the near future holds for us.
Today's Article - Central Bank begins next month, the application of measures to reduce exchange rate volatility and to restore the exchange rate of the dollar against the Iraqi dinar to normal!!
Confirmed the parliamentary Finance Committee, Wednesday, the Central Bank of Iraq next month will begin implementation of a package of measures designed to restore the exchange rate of the dollar against the Iraqi dinar to normal to prevent a repeat of the case of exchange rate volatility.
And plunged the value of the Iraqi dinar gradually over the past weeks to reach the price per dollar to about 1129 dinars after it had been stable for 1120, the highest rate up to the exchange rate during the past two years.
Committee member said Haitham al-Jubouri's "Twilight News" that "the CBI told the Finance Committee that will begin next month, the application of measures to curb the rise of the dollar against the Iraqi dinar, and some of these measures did not disclose the details they will be strictly confidential."
Jubouri explained that "one of the most prominent measures that the Iraqi Central Bank will begin to apply is to open letters of credit in the government and private banks," noting that "the Finance Committee has informed the Iraqi Central Bank support for all procedures in reducing the rise in the dollar against the Iraqi dinar."
The Finance Committee has this month and central bank governor Abdul Basit Turki agency and discussed with him the reasons for the high price of the dollar against the Iraqi dinar.