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When Will Iraq Revalue Their Currency?

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Elizabeth Leake Profile
Elizabeth Leake answered
Iraq’s tumultuous history and recent political and military upheaval has subjected the country’s currency to significant speculation and devaluation of their currency.  With a decision to reconsider the presence of coalition forces in the nation, there is much speculation that the IQD would be revalued.  Considering the situation in the region most indications are that a revaluation is not imminent. 

Today, the IQD, or Iraqi Dinar, stands at 1170 Dinars to the U.S. Dollar.  Although this is the official rate, the Dinar is exchanged at anything between 1100 to 1200 Dinars to the Dollar on the street.  Some of the factors that influence a currency’s revaluation are a stable government and a solid fiscal policy.  Currently, the International Monetary Fund specifies the exchange rate for the Iraqi Dinar.  Until The Central Bank of Iraq finds a stable political environment to exercise its financial policy, the Iraqi Dinar continues to remain in a fiscal hinterland. 

A safe political environment fosters a stable economy, through the creation of jobs.  Goods and services from these jobs earn money in the world market and the money that comes from these jobs can be used to give people more jobs.  This stability cannot happen with the Sunni-Shia conflict in the region and until the extraction and export of oil in Iraq finds its way into the world market. Rumor mills are rife with speculation about the ‘imminent’ revaluation, leading to large trades in IQD.  There has been news of Japanese investors being targeted by fraudulent brokers to buy large volumes of Iraqi Dinars and similar schemes in other countries.  If Iraq does revalue their currency in an upward direction, it is likely to be after one or two years of a stable economy.  With a war-torn society, struggling to cope with the massive damage that multiple trade embargos have done to the economy, perhaps the Iraqi Dinar will need to wait a little longer to see better days.
Anonymous Profile
Anonymous answered
This is, of course, a big question.
There is a LOT of activity right now that suggests the RV is Imminent.
1. Lower denomination bills hitting the streets.
(I have heard, but not verified demons as low as 10s and 20s)
2. Additional screens set up at the Auction House in Baghdad.
3. Security increased at all CBI (Central Bank of Iraq) locations.
(as well as these officers being informed that they will be working overtime in the next week)
As always, these things take time, even after announced.
Iraq is not known for timely action.
Mike OSullivan Profile
Mike OSullivan answered
Good question,  As one who has followed this since 2003, no one can answer this question, even after all this time.  Iraqi's are near impossible to understand, just look at all the killing between religious sects, so given this will never change, most don't understand that in Iraq, this is considered a daily fact of life.  When it comes to question of will it, and when, if ever there was a more logical time for a restoration, or revaluation to former levels, this would be a logical time period, but in Iraq, nothing is logical as we would understand it.  If this were the case, it would already be completed, after all, Iraq has established a stable currency over more than a year, stuck at the 1170 rate, even while all other currencies have been rising and falling, just as we have seen the U.S. Dollar do, but the Iraqi dinar has been rock solid, one of the most important goals which had to be established first before any restoration of value to former levels could be made.  These were official announcements, and yet we still wait.  With the obvious question tied Iraqi reserves, I don't expect to see an immediate restoration, but rather a stages recovery, perhaps starting at the .30 range to dollar, and then left to float as oil production ramps up as will reserves to back the dinar.  All this will take more time, but wiht all the talk and rumors over the past 7 years, you cannot count on any time line we have heard.  Elections are over, yes, but we as yet do not know who the winner will be.  Maliki has done little for the poor of Iraq, typical of all leaders as I see it, but surely he, as well as his followers will all be billionaires one way or another, as in, they have all filled their pockets, so now it is time to live up to the commitment to help the poor citizens who have seen little change over Maliki's term to date.  Will he be re-elected, probably, but he hasn't earned it, it is more about Awal who a flip flopper, like most politicians, so he is not worthy in my eye, but you never know, just like in the U.S., most are fed up with politics as usual, in fact, recent poll states 17% are satisfied with gov., so Iraq has learned well about democracy, no one is happy with any party or leader.  I give it a 50% chance that we will see a change in value of the Iraqi dinar in the next month, sorry, but no one knows for certain, but with all the oil companies lined up to start drilling for oil, and Iraq in desperate need of more revenues, the dinar cannot yet support a return to the previous $3.30 value which was an untested value under Saddam, as in, it was not internationally traded on FOREX.  It will revalue soon, this I believe, but not to a level higher than is financially possible and that means it will be well under the rumor of dollar to dollar.  Good luck to all, RecessionProof-Business.com
Anonymous Profile
Anonymous answered
We would all like to know, but it's Iraq's decision to make.  Of course, they can't tell you when.
Mike OSullivan Profile
Mike OSullivan answered
Maliki will not be elected for second term if he doesn't have something to show for it, and he has nothing, no electricity in most areas, no ample fuel for people, nothing has changed by his hand, only the U.S. Has made progress, especially in last year where a marked decrease in terrorist bombings has been evident.  Maliki will have to buy his election just like most politicians, so I predict we will see the restoration of the dinar before March elections. For all the updates of importance, visit the below website.  www.Iraqi-Investments.com

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