"Floating Exchange Rate" - Thurs. PM TNT Thoughts 1/17/19

by **Ssmith** Fri Jan 18, 2019 10:51 am

TNT

SouthernGuy:
DELTA: FROM IRAQI TV: The Economic and Investment Committee.... Iraq may be forced to float the dinar to encourage investment in Iraq.

Tessa:
good evening everybody. What does this mean what Delta is saying: "Iraq may be forced to float the dinar"? Float after it RVs first? Or what? Thanks for an enlightening answer…..

Sunny:
A floating exchange rate is a regime where the currency price is set by the forex market based on supply and demand compared with other currencies. This is in contrast to a fixed exchange rate, in which the government entirely or predominantly determines the rate.

Tessa:
Thank you Sunny. Can this fixed rate be changed to a floating exchange rate any time, or has a RV happen first?

Sunny:
Tony has said on several occasions not to be in a hurry to exchange and watch the currency rise as it's traded and he's watching for it to show up on the FOREX currency trading market. IMO that would be float as opposed to the CBI keeping it at a fixed rate…..

Once it becomes publicly FOREX traded, IMU as a currency trader it can be free to move according to supply and demand or the central bank can step in to support it. This was done with Japan for many years to keep it at a decent value and not drop to nothing when they had zero and negative interest rates.

Briona:
As long as they float the currency after the RV, that sounds good to me. Prior to the RV would be a different matter.

Ify:
but doesn't a Float means it becomes an International Traded Currency? even at 1 to 1 would be a great windfall.

Briona:
ify, I am hoping they mean once it hits Forex, as a float is what we expect at that time.