Thread: Iraq/Dinar News. 09/05 to 01/14/07

Originally Posted by laurenr

What time do the figures change on the CBI ?

wont be until the 29th at 4am EST

Originally Posted by phiberoptik

wont be until the 29th at 4am EST

Uhm, that has already passed.

just a note....

if that meeting was supposed to be about security why was jabor there? he deals with FINANCES. security people werent there or werent mentioned by name. neither was the minister of interior which would be required in details about territories.

What time is it now EST ?

Originally Posted by choochie

Uhm, that has already passed.

ya my fault ment the 30th

Originally Posted by laurenr

What time do the figures change on the CBI ?

12:00 PM-1:00 PM IRAQI TIME
4AM-5AM EST
2AM-3AM MST
1AM-2AM PST

AFTER A WEEKEND IT'S ABOUT 1:00PM IRAQI TIME

ISX-Data.com Editorial
Will the Iraqi Dinar Rise? Not Likely
A brief look at the realities of a meteoric currency re-valuation

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By: David Sotnick (email)
Published: 09/07/2006
this author's past articles


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Many have speculated that the Iraqi dinar (IQD) is set for a meteoric rise in 'value', with claims/rumors of the dinar being pegged 'in the near future' at levels ranging from $0.01 USD per dinar to as much as $1.00 USD per dinar.

First, let us examine these claims for what they must be; a scam, pure fiction or, at best, reasoned speculation.

Lies, Damned Lies and Statistics
Clearly, the vast majority of dinar-related claims appear to be a blatant scam, preying on the misinformed. Dozens of websites abound with information on the supposed previous value of the dinar, at or above $3.00 USD per dinar. On the surface, these claims are true, if one happily ignores the fact that this arbitrary level was picked by Saddam and his cronies and had absolutely no basing in economic fundamentals. Beware any source claiming these numbers as some kind of indicator of future value.

A second prevalent claim is that, much like the Kuwaiti dinar (KWD) during the first Gulf War, the Iraqi dinar is set for an overnight rise in value on a similar scale. Some simple facts however, reveal that these situations share nothing in common other than geography and the players involved. The Kuwaiti dinar had been historically valued at levels at or near those levels seen immediately after the liberation of Kuwait by Coalition forces (and in the 15 years since). The catastrophic, yet brief dip in the KWD's value was purely reflective of the economic uncertainty that the Iraqi invasion caused. The fact that once the Iraqi's were removed from Kuwait the currency bounced back to 'normal' levels should not surprise anyone. The KWD's worth was founded in decades of economic management by the Kuwaiti central bank, which had a track-record of demonstrating that a high exchange rate was sustainable for the Kuwaiti economy.

In discussing the IQD, a parallel is often made when attempting to justify the 'impending' rise in the value of the Iraqi dinar. Often people will cite (selectively of course) the valuations of several neighboring Gulf countries currency exchange rates. Oman, Kuwait, Bahrain and others are touted as the 'natural' exchange rate for the region, given their similarity in both peoples and of course resources. However, this precludes the fact that Iran, Iraq's closest neighbor and clearly, if one is to look at the situation on the ground, most influential, has an exchange rate of over 9,000 Iranian Rial to the USD. If one feels the need to believe the superficial comparisons made in the positive, one also needs to look at those that may reflect negatively on the Iraqi situation.

A final comparison that you may see involves the supposed rise in value of the Afghanistan Afghani. In short, this currency has not experienced any real gains since the liberation from the Taliban. What it did experience was a phenomenon known as 'zero-lopping', in that the government decided to simply remove a number of trailing zeroes from their printed bills out of sheer convenience. Prices, and the Afghani's exchangeable values, immediately reflected these changes. No rise in value was or has been seen to the respective currency holder, or to the Afghan people.

One needs to remember that physical currency is simply a piece of paper with pretty pictures and an arbitrary number printed on it. Real value can only obtained through the trade of this paper, and its relative worth when compared to other currencies, which brings us to Iraq.

Reasoned Speculation, or How I Determined the Value of the IQD
At this point, in this author's opinion, targeting a specific exchange rate for the IQD is nonsensical, unless the person spreading the rumor has the ear of the Central Bank of Iraq (CBI) or has a complete understanding of the macro and micro-economic situation on the ground in Iraq. I would venture that nobody has such a complete picture, and that you would be better served to simply throw darts at a board when it comes to determining values.

Predicting the future of the Iraqi dinar is akin to predicting the future price of a given companies shares, without the 1) information needed to do it properly, 2) a language barrier which prevents all but a few from actually understanding what little information IS out there, and 3) a low-level civil war that makes gathering economic indicators and trends nearly impossible.

So what do we have to go on in terms of the true valuation of the dinar? Most obviously, the historical exchange rates of the current Central Bank of Iraq (CBI) regime. These rates have been steadfastly 'pegged' at close to 1500 IQD per USD now for almost three years. If one is to look at the daily currency auctions posted on the CBI's website, we can see that they seem to be managing the currency quite responsibly, and if anything have managed to stave off downward pressure, rather than stop some magical upward swing that many hope for. Through all the political bickering, sectarian violence and oil disruptions, the rate has traded within a very tight range of values.

In the face of an inflation rate hovering around 50%, the bank has done an admirable job of maintaining the current value of the dinar. One should not be surprised that given the on-the-ground realities, inflation and other economic factors, the dinar is probably slightly OVER-valued today. If the CBI was to back off on it's currency interventions, the value, at least in the short-term, would likely drop.

The Re-Pegging Myth
If the CBI were to decide tomorrow to 're-peg' the dinar to some arbitrary value (i.e. intervene to maintain the auction prices at a higher exchange rate value), of, say, 1 dinar = 1 USD, they would be insolvent within a month. Not to mention the obvious problems that these imaginary re-pegged exchange rates would create. Imagine the average Iraq citizen instantly becoming a USD millionaire, and then using these riches to flee the country and live like royalty elsewhere in the region. Or the range of weapons that the insurgents could then acquire with their billions of dinar/USD. Or the fact that individual currency speculators holding in some cases billions of dinar, now magically worth billions of USD, would have a net worth almost equal to Iraq's entire GDP (estimated to be ~94 billion for 2005). Ridiculous.

One should expect a loosening of the constraints of exchange on the dinar over the coming months/years, and one should expect some movement when this happens. One should not expect to suddenly be worth more than the entire country of Iraq.


**END ARTICLE**

Originally Posted by DinarDarling

A full curfew has been placed on Baghdad now.
This was announced at 1:45 p.m. West Coast time.

Any information as to why?

yeah, lol.

DISTRIBUTE THOSE SMALL DENOMS!!!!

SoulSurfer,,

Isn't this a very old piece of info we've all seen before ?

Doesn't the evidence we've seen over the last 2 months show that this cr*p is eroneous ?

Why is it being posted yet again when it is so old ?

Originally Posted by $onedaysoon$

in the article is that the old MOF or new MOF? need confirmation please

jabor is the new one.