Iraqi dinar has been a hot topic of discussion amongst the people dealing in international currency trading. It has been quite some time now, that Iraqi government is thinking about revaluating the dinar.

1. A Blueprint Of Expected Iraqi Dinar Revaluation
Iraqi dinar has been a hot topic of discussion amongst the people dealing in
international currency trading. It has been quite some time now, that Iraqi
government is thinking about revaluating the dinar. Even the financial analysts are
looking with hawkish eyes at the Iraqi regime to see when they bring about the
revaluation. However, no one knows precisely when the currency revaluation will be
enacted.
Iraqi dinar is currently trading at 1.00 IQD = 0.000863669 USD, which means that
one can exchange 10,000 Iraqi dinars for mere 8.63669 USD. The deep devaluation
of dinar has become one of the main reasons of falling demand of the currency in
national and international market. This is why many in the government are now
vigorously demanding for currency revaluation. This revaluation is proposed to be
done by shedding away the three zeros from high denomination Iraqi notes like
10,000 IQD or 25,000 IQD, and removing all the low denomination notes like 100
IQD or 50 IQD. This would mean that, if today 1 USD would exchange for 1000 IQD,
then a 10,000 IQD note would be worth 10 USD. Now, if three zeros are shed from
10,000 IQD notes then rebased 10 IQD would be worth 10 USD. This means that
dinar after shedding three zeros would come at par with USD. Also, the country will
then print new notes and provide a small time frame for collecting all the old notes.
So, one can exchange an old 10,000 IQD note for 10 IQD new note, which will have
the same value in international market as the earlier note. The trading of new IQD
notes with old IQD notes can be done at Central Bank of Iraq. So, one can buy Iraqi
dinar from bank with old IQD notes, and the new note will have the same value in
the international market as the older note.
The entire buzz about Iraqi dinar revaluation might confuse an amateur investor,
but ask analysts and they would say that currency revaluation will not hurt the
investors in any way. It will only make the currency more easy to use at home and
increase its demand. This is turn will be beneficial, not harmful for the investors.
Moreover the increase in Iraq’s oil production over the recent years is only expected
to grow higher over the coming years. So, the only thing that can harm the investor
prospects is the deterioration in security conditions in Iraq after American marines
completely evacuate Iraq and leave it on its own. However, if the country’s young
democratic government could sustain these few challenging years, dinar would
surely regain its pre-1991 gulf war exchange value.
Author:
The author is an expert financial analyst. Here, he gives an overview of how Iraqi
government can actually enact Iraqi dinar revaluation. He feels that there is high
possibility that to curb illegal practices and money laundering, that people would be
allowed to buy iraqi dinar from bank of Iraq.