Iraqi Dinar Revaluation

By Don Wilson
Forex Trading Desk
February 8. 2013

U.S. national debt will exceed $17.5 trillion by the end of the summer.
The government has been underwater so long, it has gills...
But despite their desperate condition, the Feds still have a few tricks up their sleeve that will allow them to keep “kicking the can” down the road.
One of the gimmicks they've cooked up to stave the wolves off is becoming more and more evident: Iraqi Dinar Revaluation.
The dinar collapsed after the United States invaded Iraq and toppled Saddam. Prior to U.S. invasion, the Iraqi currency was trading over USD3 to one Iraqi dinar on the strength of the country's massive oil industry.
After the collapse, the dinar was trading significantly lower. At one point, a single dollar purchased one thousand Iraqi dinar.
Speculators began to take positions in 2004 hoping someday, the dinar would recover and the UN economic sanctions would be lifted, allowing the currency to be revalued. Since then, there has been much speculation regarding how and when that would occur.
But here's the really interesting part...
The U.S. Government is the Largest Holder of Iraqi Dinar Outside of Iraq
Does that really come as a surprise?
The U.S. Treasury does not officially list the Iraqi dinar as part of the country's forex reserves.

New Iraqi Dinar

However, the Treasure does say it did an initial currency swap with Iraq to fund their government and Ministries...
Exactly how many dinars were traded is not mentioned, but it does make reference to “billions of U.S. dollars” traded to Iraq.
About two months ago, Iraqi dinars could no longer be purchased; the recent Dodd Frank bill appears to have legislation related to the revaluation of a foreign currency and preventing mass hysteria.
From what I have been able to gather, it sounds like this plan was originally put together by George Bush, Dick Cheney, Alan Greenspan, and others years ago as a way for the U.S. government to be repaid (read: get kickbacks) for their efforts in Iraq.
Experts speculate the U.S. government received nearly 4 trillion Iraqi dinars at an exchange rate of 4,000 dinar to USD1.
If this is even close to true — and the UN allows Iraq to revalue their currency up to USD1: one Iraqi dinar — the U.S. government would stand to profit in trillions... as would anyone else who speculated on the dinar over the years.
Recent activity within the Central Bank of Iraq leads one to believe that the end game is near and revaluation will be much sooner than later.
Bush’s statement, “This is a war that will pay for itself,” will be true 10 times over.

Cabinet Secretariat: Government seeks to have the exchange rate at 1,000 dinars to the dollar

Monday, 04 February 2013 10: 39
Excluded the General Secretariat of the Council of Ministers to replace or cancel three zeros currency at this stage, it is seeking to raise the value of the dinar against the dollar.
And the Secretariat’s statement quoted Ambassador News Agency received a copy of it today its Secretary-General on improved relations, as saying that “the project currency substitution and cancel three zeroes discussed during the last period of the Council of Ministers, the Council stressed that this project is not a priority for the Government at the moment, there is no real problem in this area.”
“The Exchange itself requires significant tuning process, there are still issues concerning this aspect after the fall of the dictatorial regime, with limited currency block, it now has doubled from what it was at the time, and pull this block is a difficult task.”
He added that “some have wrong impression involves deleting zeros will reduce the volume of cash in circulation as the quantity, and the fact that it does not diminish, even by 1% despite the Government believes that the currency is a good thing if there are suitable conditions for its application, but does not give them priority when providing stable conditions”.
He noted that “the Iraqi dinar to rise the price of the dollar, and economic and financial viability of dinar was able to be stronger than it is currently, and that the chances of higher value are available, especially with the growth of the accumulated reserve at the Central Bank which exceeded [65] billion dollars, rising steadily along with high economic growth in Iraq, and is now one of the most developed countries in the world thanks to the expansion of oil production“.
Confirmed that substantive and economic components available in the direction of the rising dinar exchange rate against the dollar, noting that “the Government is seeking to have 1000 dinar exchange rate against the dollar, meaning that the price of the currency class 100 $ 100,000 Iraqi dinar”, stating that “any improvement in the political situation can contribute to achieve this faster.”
The Cabinet decided in its meeting held on 10 April, wait in the application deleting zeros from the local currency to further notice.
The Iraqi Central Bank, the Bank Adviser Mohammad Saleh appearance, has confirmed to IGN need Iraq to an administrative reform of the currency, and the deletion of zeros is the step comes within the country’s administrative reform process, in order to reduce the cost of cash transactions in the economic process, in addition to the need to provide small groups currency used in trade transactions of small daily.
Officials at the Central Bank, in addition to some politicians and economists urged the Government to delete the zeros from the currency and issued new currency large cash categories, in addition to having small coins.
Observers say that the Government intended to delete zeros from the currency as a step towards improving the purchasing power of the Iraqi dinar, but economists underestimated the importance of this step, saying that the cost of raising the zeros will be greater than the benefit of raising the zeros.

GOI recognizes its inability to cancel three zeroes of the dinar however seeks to increase value; Any improvement in political situation will make process happen faster

GOI ruled out today to replace the local currency dinar or cancellation of three zeroes [however] are currently pointing out that he was seeking to increase its peak from 1166 to 1000 dinars to the dollar, adding that high value opportunities available with the growing backlog in the central bank, which exceeded $ 65 billion.
The Secretary General of the Council of Ministers Ali Mohsen Keywords that this project is not a priority for the government at the moment there is no real problem in this area. He added that the replacement of the currency in itself requires a significant adjustment process, as there are still issues with this side after “the fall of the previous dictatorial regime where the mass of currency in circulation is limited, but it’s now doubled from what it was at that time and therefore the process of withdrawing this block is large and difficult task. “
Keywords pointed out that there is a false impression among many involves the deletion of zeros will reduce the volume of cash in circulation in terms of quantity but the fact that he does not reduce even by 1% .. He said the government believes that the change of currency is a good thing if there are appropriate conditions to be applied, but is not only to give him a priority when providing stable conditions.
The Iraqi official said in a press statement today Athens that “the Iraqi dinar because it is up by one candidate against Atarōhnak economic and financial viability enables dinar to be stronger than it is now .. He noted that the high value opportunities available, especially with the growing backlog in the bank Central, which exceeded $ 65 billion and rising steadily along with high economic growth in Iraq, which is currently one of the most developed countries in the world thanks to the expansion of oil production.
The secretary general of the Iraqi cabinet that ingredient objectivity and economic available in the direction of the high exchange rate of the dinar against the dollar and said the government is seeking to have that exchange rate 1000 dinars to the dollar in the sense that the price of the currency class hundred dollars a hundred thousand Iraqi dinars adding that any improvement in the political situation in the country will contribute to make this happen faster. The value of the dollar victims of 1166 Iraqi dinars.
For its part, official sources confirmed within the Central Bank of Iraq that the draft deleted three zeros from the Iraqi dinar would cost the state budget $ 172 billion dinars ($ 150 million). She noted that the replacement of the Iraqi dinar Btabath new which will be issued in three languages ​​Arabic, Kurdish and English and printed to be forwarded to one of four international companies specialized cost $150 million spread over printing, transportation, insurance and work outside working hours to destroy the old currency that will be inside Central Bank.
The CBI said in August last he plans to delete the zeros from the Iraqi dinar to facilitate financial transactions made through cash in most cases. Among the difficulties faced by Iraq if they are to foot the deletion of zeros from the dinar is the withdrawal of about 30 trillion dinars in circulation in the Iraqi market (about 27 billion dollars) and then disposed of and replaced with a new currency.
For his part, warned economic analyst Ibrahim al-Mashhadani of the implementation of the project to delete three zeros from the currency, pointing out that this project is important and needs to be political and economic stability over the country when applied. He pointed out that such a project can not be passed through a little period of time, he needs more time to study it in detail and see pros and cons to avoid economic problems may occur because of it.
He Mashhadani that the project needs to stabilize economic and political more before implementation and these two factors are not available at the moment as a result of the exceptional circumstances experienced by the country although it is important in terms of ease money supply that are exposed to fraud and many difficult traded pointing out that countries This experience, which fought were enjoying economic and political stability in countries such as Turkey, which deleted 6 zeros from its currency.
The economic advisor to Iraqi Prime Minister Abdul Hussein Al-Anbuge, said that the process of deletion of zeros from the local currency will increase the phenomenon of money laundering. He noted that the government informed the Central Bank of the existence of threats to economic security in the event of bank insisted on the deletion of zeros from the local currency. He added that this process costs time and effort of the government and the Central Bank and raises the level of fraud some terrorist groups to carry out smuggling money out of the country.

Iraqi Dinar Exchange Rate Manipulated?

Investigators in Iraq have opened an inquiry into alleged manipulation of the exchange rate between the Iraqi dinar (IQD) and the US dollar, and arrest warrants have reportedly been issued for several officials including the head of the Central Bank of Iraq (CBI).
Hassan Karim Aati, spokesman for the Commission on Integrity, said on Tuesday that the Commission is looking into the matter, and studying documents from a parliamentary committee investigating the corruption allegations.
The investigation focusses around 16 officials in the CBI.
While it’s understood that no charges have been brought, Baha al-Araji, the chairman of parliament’s integrity committee, said 30 arrest warrants had been issued, including for CBI governor Sinan al-Shabibi and his deputy Mudher Saleh [Mudher Kasim, Mudher Saleh Kasim].

What’s the Real Reason for Shabibi’s Dismissal?

Perhaps the biggest story of recent days was the shock dismissal of the Governor of the Central Bank of Iraq (CBI), Sinan al-Shabibi, and the issuing of arrest warrants for him and many of his staff.
The nature of the allegations against Mr Shabibi are not entirely clear, but appear to center around manipulation of the exchange rate between the Iraqi dinar (IQD) and the US dollar.
Considering the fact that the exchange rate has been managed within a relatively tight range for quite some time, this accusation looks a little strange.
But there has been tension between the Central Bank and the government for years. In January of last year, Nouri al-Maliki secured a court ruling placing the Central Bank under the control of the cabinet, rather than the parliament, much to the displeasure of al-Shabibi.
The latest charges have been brought by Iraq’s Commission on Integrity, whose former head resigned last year, alleging political interference in his inquiries.
Suspicions abound that the Central Bank affair is an attempt by al-Maliki to increase his control of the bank. While we wait for more details to emerge, the international business community will be watching developments closely

MP Rules Out Deleting Zeros from Currency Soon

Posted on 27 October 2012

Iraqi MP and member of the Parliamentary Economic and Investment Committee, Nahida al-Dayni, has ruled out deleting the zeros from the Iraqi currency soon.
Speaking to All Iraqi News Agency (AIN), she said:

“The process of deleting the zeros from the Iraqi currency will not be done soon due to the lack of security and economic stability in Iraq, in addition to the lack of the required observatory role and the reduction of the IQD to the USD.

“The increase and decrease of the prices are related to the regional situation … The possibility of fixing the price of the USD to keep the same ratio of the IQD in the local markets.“

Previously, the Council of Ministers decided to postpone the process of deleting the zeros from the Iraqi currency until further notice.

Iraq calls on the United States to support efforts to emerge from Chapter VII

Published on Wednesday, September 26 / September 2012 09:36

BAGHDAD / obelisk: called the Iraqi delegation in the works of the 67th session of the Juma General of the United Nations, Wednesday, the United States to support Iraq’s efforts to emerge from Chapter VII of the UN Charter, and to address the remaining issues with Kuwait within the framework of the resolutions of international legitimacy.

The Foreign Ministry said in a statement obtained by “obelisk” a copy of which, “The Iraqi delegation headed by Vice President Khudair Khuzaie met, at the UN headquarters in New York, U.S. Secretary of State Hillary Clinton and the parties discussed how to support the United States to support Iraq’s efforts to emerge from Chapter VII of the UN Charter, and to address the remaining issues with Kuwait within the framework of the resolutions of international legitimacy. “
The statement added that “During the meeting the parties discussed relations, Iraq – U.S. and work of the Joint Coordinating Committees emanating from the strategic framework agreement.”
The statement pointed out that “the meeting also touched on the Iraqi stance of the Syrian crisis and to emphasize the importance of the political transition process and stop the bloodshed and support the mission of UN envoy and joint Arab and non-militarization of the conflict.”
It is noteworthy that Iraq is taking part in the session of the 67-Fri-General of the United Nations, in New York City, U.S., with a delegation headed by Vice President Khudair Khuzaie and includes parliamentary figures and Foreign Minister Hoshyar Zebari.
Iraq has been under since 1990 Chapter VII of the UN Charter, which provides for the imposition of sanctions by the following occupation of Kuwait in August of the same year, and under Chapter mentioned right for the international community to use force against Iraq as a threat to international security, as well as freezing of large amounts of its assets financial in international banks to compensate those affected by the invasion of Kuwait.