Adam Montana: "the "new rate" does not need to be in the Budget" 11/28/19

by **RamblerNash** Fri Nov 29, 2019 10:51 pm

Adam Montana

The "hot topics" on the subject seem to be budget, budget, and also...Budget. Included in the Budget is always some kind of reference to the rate of the Iraqi Dinar, and every year we have a variety of interpretations on how the Budget will work with a change in the value of the Dinar. To keep things extremely simple, we can just summarize - the "new rate" does not need to be in the Budget. The Budget doesn't have to take a rate change into account. The rate mentioned in the Budget doesn't mean a thing! The reason is very simple...

When they change the rate, there are a few ways they can do it. In any of these cases, a one paragraph amendment to the budget will keep things correct. For example, the exchange rate is currently 1190:1 (IQD:USD).   If they move the exchange rate closer to $1, they might move the decimal 3 places to the left making 1.19 IQD = $1 USD.   Adjusting the budget is mind blowingly simple - a one paragraph amendment reads as follows: Due to the sudden difference in exchange value as implemented by the Central Bank of Iraq on (December 4, 2019), all values in the Budget shall be adjusted 3 zeros to the left. In other words, an allocation of 1,000,000 Iraqi Dinar is now adjusted to 1,000 Iraqi Dinar.

It doesn't have to be complicated! And that right there covers pretty much everything...There was also a comment recently by one of the gurus about the new notes being introduced after the rate is changed...I happen to agree with this one.  There is no reason to introduce new notes without a rate change. Introducing them before a rate change wouldn't make sense. And the fact that there are new notes for us to talk about is a huge indication that there is a rate change in progress or planned.

11/28/19