Exchange Rate Calculations and Observations

I have noticed a lot of confusion in the chat room and forums regarding exchange rate calculations. At times, I have even notice mistakes made by some of those providing intel.

Normally, I would not make a big deal about minor mistakes, except that, the tiniest of mistakes in exchange rate calculations has huge implications in regards to the expected value of dinar at time of RV.

I think these types of mistakes are probably responsible for some of the outrageously high end projections for the rate. For example, I have seen it stated that, if the rate is showing .0525 that means a $19 rate in USD. This is simply not true. This is a common mistake when working with exchange rates.

So to be clear, let's examine the exchange rates, how they are presented, what they mean and how can we use them.

First, exchange rates are always given in pairs: IQD to USD, GBP to IQD, etc.

The order of the pairs is critical to understanding the exchange rate.

IQDUSD =X .00086 means that 1 IQD = .00086 USD
USDIQD=X 1168 menas that 1 USD = 1168 IQD

For example, here are some of today's rates for GBP (hopefully this will change today)

IQDGBP .00052504
GBPIQD 1899

What you will notice is that when you reverse the order of the currencies, the rate is 1/old rate.
So in the example above, 1/1899 = .0005265 (slightly different because of rounding)

So, for us, if the exchange rate has the IQD in the front, a bigger number is better. If the IQD is the second currency in the pairing, the lower the better.

So, if you expect for example a $3.22 rate, this is what that would look like:

IQDUSD=X $3.22
USDIQD=X .31

So when you see posts that say the exchange rate of IQDGBP=X .0525 = $19, this is not correct. This actually means 1 IQD is worth a little more than $0.086, or 8.6 cents. I calculated that by taking the .0525 gbp X 1.63 to change it to USD.

Now for the interesting part. As many of you may know, they Yahoo Finance page has be showing the IQDGBP rate sporadically at .0525 instead of .0005. When this happens, it only last for a few seconds to a few minutes, then it disappears. I have not seen this happen against any other currency except IQDGBP.

However, last night, on the following UK forex site, it showed IQDGBP at .03 for at least one hour that I watched it. MORE IMPORTANTLY, it showed this same percent increase on any currency pairing with the IQD. And it showed it in both directions.

For example, it showed IQDUSD at $0.055 and USDIQD at 19.

Not sure what all that means, but it seems to be indicating that something is going on in the forex data.

Okie has mentioned that until the rate hits, any of these anomalies that are showing are not the actual rate, but just a placeholder value. I hope he is right.

We shall see soon I hope.

thanks for listening to my ramblings...