EASING THE CONFUSION!! (FROM ANOTHER SITE)

July 2nd, 2011
I have read pretty much all the articles and posts for the last year pertaining to the Iraqi Dinar and I am more amazed each day at the mistakes that people make. Then those mistakes are taken by others as fact and soon you have rumors flying around that are just ridiculous. Let me address a few.

1. There is a new 100,000 Dinar note coming out. What? Are you kidding me? Even Scooter jumped on this. The article below is where they got this from. The article simply states that Iraq is going to a new monetary system that resembles the US dollar. It will go from small change to $100. This assumes the exchange rate will be close to 1 to 1. If it is 3 to 1 then the Dinar will be more valuable but in any case they won’t need more than a 100 Dinar bill just like we do not need more than a $100 U.S. bill. The 100 dinar note will be the LARGE bill followed by smaller denoms and coins. Since the 100 Dinar note will be worth $100-$386 US dollars this makes perfect sense. This is how the US works and their Kuwaiti neighbors. This will NOT be confusing for them since they have been using the U.S. dollar for commerce more than their Dinar.

BAGHDAD — A senior Iraqi Central Bank adviser says the government has adopted a two-pronged plan to restructure the national currency in order to facilitate large transactions and make government accounts more efficient, RFE/RL’s Radio Free Iraq (RFI) reports.

Mudhhir Muhammad Salih, a member of the bank’s advisory panel, told RFI on June 23 that in the short term, larger banknote denominations of the dinar will be issued to simplify major transactions.

He said that because so many Iraqis still deal mainly in cash, it is cumbersome to carry bags full of money to pay for expensive items like cars. The inconvenience leads people making such purchases — as well as many entrepreneurs — to use dollars for those kinds of transactions instead of dinars, something the government wants to end.

He added that large denominations equivalent to around $100 will be issued to simplify major purchases, and new coins and lower denominations will be introduced for smaller transactions.

In the longer term, Saleh said a redenomination is needed wherein three zeros will be dropped so that the 25,000 Iraqi-dinar banknote — currently the largest denomination — becomes a 25-dinar note.

He said the change is inevitable, considering the economy is expecting high growth in the coming years with a planned increase in oil production to finance reconstruction projects.

Saleh said there are currently some 29 trillion dinars in circulation in Iraq, represented by some 6 trillion banknotes of various denominations, most of them quite small. He said this also causes complications for the central bank and government, as well as commercial accounting departments.

Saleh said the monetary-restructuring plan was drawn up with the help of foreign experts and financial institutions, including the International Monetary Fund (IMF), of which Iraq has been a member since 1945.

The plan will soon be presented to the cabinet, which is expected to subsequently send a bill to parliament.

Saleh noted that until 1980 the Iraqi dinar exchange rate was 1 dinar/$3.3 compared to $1/1,168 dinars now due to hyperinflation that occurred during the latter part of the late ousted leader Saddam Hussein’s reign.

2. My bank person says “It is supposed to revalue soon”. Well let’s see. If they know this then they most likely own Dinar. If they own Dinar then they most likely have kept up on the progress of the pending Dinar revaluation on the internet through news articles and Guru posts just like the rest of us. It is VERY unlikely that they have inside information. Most of them say that it will revalue soon because they read it the same place you do. Did any of these people think to ask the bank people where they got their information?

It sounds like the revaluation of the Iraqi Dinar will happen real soon. Articles coming out of the news says as much. Please stop reading in between the lines on everything. It is driving people