Thread: Low level of inflation in Iraq during 2007 and attempts to delete zeroes from the Iraqi dinar

Low level of inflation in Iraq during 2007 and attempts to delete zeroes from the Iraqi dinar

The adviser Central Bank Governor, the appearance of Muhammad Salih, a decline in annual inflation rate in Iraq to 14% over the past year 2007, compared with annual inflation recorded in 2006, which reached a rate of 77%, according to statistics of the Central Bank to measure inflation, pointing to the bank sought Central to raise the number of zeroes of Iraqi dinars.

Saleh said in an interview with "Uzmatik", "The real estate rents, transportation, a component of President indicator of inflation, the basis for calculating rates of inflation in the Central Bank in accordance with the policy of spending which the bank is responsible."

He added that one of the main reasons for high inflation in Iraq, was the high prices of oil derivatives in addition to a shortage in supply, and said that "the prices of oil derivatives Amendment, the latest shock and one of inflation, but fuel shortages from time to time, causing shocks continuing" as he put it.

Saleh pointed out that due to low inflation central bank decided to reduce the rate of interest at banks governmental organizations from 17% to 16%, having shown a decline in the inflation rate, stressing that raising interest rates in the bank, is one of the monetary policies which led to a reduction in inflation In Iraq.

On the other hand, revealed adviser Central Bank Governor "sought to delete the bank and raising the number of zeroes for the future Iraqi dinars, after the Iraqi dinar rose to 20%" He refused to identify the roof of a timetable for lifting these zeroes, but he indicated at the same time that " This will lift the zeroes are rational, reflects well on the Iraqi society and without negative impact upon "as he put it.

Saleh said that "raise the value of Iraqi dinar, depends on the level of inflation for central bank reserves of foreign currency," which he described as "large for the time being," declining to disclose the amount of these reserves.

The adviser Central Bank Governor, the appearance of Muhammad Salih, in his talk of "Uzmatik" that "the process of lifting the value of Iraqi dinar, will not stop as long as there is a chance to improve its value" as he put it.

It is noteworthy that the Central Bank of Iraq, which had been lifted in 2006 and 2007, the interest rate to cope with the sharp imbalance in prices then, reaching a maximum annual benefit beginning in 2007, to 20 per cent annually.

Translated version of http://iraqalaan.com/

I know it isn't Shabibi - but I thought you would want to read it.

Seaview,

If my understanding of your last post in this thread is correct, this indicates good news for dinar holders.

Or have I got it wrong again?

Thanks for posting info. Seaview. I like the subtle tone of of translation. I hope we can take some time understanding the implications of news and digesting info. in greater detail. Thanks,

FistFul of Dollars

Is this article being discussed here anywhere?

Originally Posted by investor

Seaview,

If my understanding of your last post in this thread is correct, this indicates good news for dinar holders.

Or have I got it wrong again?

I think it's a bit ambiguous. Probably intentionally. I always air on the side of caution with Iraq. so this is what I read for now.

"the process of lifting the value of Iraqi dinar, will not stop as long as there is a chance to improve its value" as he put it.

This I read as they will continue strengthening the dinar (gradual appreciation) as long as they are able to do so. If or until they are no longer able to strengthen the dinar value this way then they will lop.




Although – I like this bit :-

central bank reserves of foreign currency," which he described as "large for the time being," declining to disclose the amount of these reserves."



Glad I have ISX - but that is a gamble to - who knows - they may freeze foreign investors accounts and make us all start again.

I think I'm getting a bit jaded. Someone a bit more optimistic stick a more positive spin on it.........please.......

Why would Iraq or any country go through all the trouble and expense of printing and circulating a new currency just to LOP zero's off at a later date? If you lop zero's off a 25000 note it would be quite confusing to say the least when you try to make change. Also, what use would there be for smaller denominations??? IMHO, this is just disinformation to stem speculation...

Originally Posted by roadhawg

Why would Iraq or any country go through all the trouble and expense of printing and circulating a new currency just to LOP zero's off at a later date? If you lop zero's off a 25000 note it would be quite confusing to say the least when you try to make change. Also, what use would there be for smaller denominations??? IMHO, this is just disinformation to stem speculation...

Well I agree about the notes. They are of exceptionally good quality and have amongst the best security features in the world on them (re : minted notes). This is one of the reasons why I am in two minds about what they plan to do eventually. To reprint will cost a fortune if they are looking for the same quality and the US paid for the last lot - I don't suppose they have a mind to do the same again.