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...What's the number 1 thing that could delay it [The RV]? It's oil prices going up...If the price per barrel goes up then Iraq can delay the RV coming down the road...what are the windows? It changes. ...I have absolute confidence in the value of the Iraqi dinar. Let's say oil prices go up and it delays it...You have confidence? Yeah, absolutely! 100%. Nothing is going to change that. It's the timing that might deflect it here or there but that's not going to change it. It's simply not going to change it....
- GURU HUNTER
- Posts : 2881
Join date : 2015-04-20
His underlying assumption here is that higher oil prices will provide more revenues for Iraq, thereby relieving the economic pressure to increase the value. In the past the stated purpose for the RV was to return the dinar's value to its rightful place before Saddam Hussein started screwing with it. Both are wrong. There is no pressure at all to raise the value of the IQD. Whether the price of oil goes up, down, or sideways the dinar is on a managed float to maintain exchange rate stability as per the CBI's stated policy. A year from now the IQD's value will still be around $.00085 whether oil is selling for $100/bl or $30/bl. As for the rightful value of the dinar, if anything it's overvalued. Divide the foreign currency reserves total of $50 billion by the M1 money supply of 70 trillion dinar and you get about $.00071 instead of the current value of $.00085.
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