Central Bank of Iraq raises the value of Iraqi Dinar

Saturday, January 21, 2012 13:44 GMT

Central Bank of Iraq announced, on Thursday, that it revaluated Iraqi Dinar 3.4% in exchange with Dollar. This decision will affect the exchange rate of Iraqi Dinar against US dollar in Iraqi markets, Central Bank stressed.

“During his daily auction of foreign currencies’ exchange, Central Bank raised the value of Iraqi dinar against the dollar with a percentage of 3.4% which counts 4 Dinars,” deputy governor of Iraqi Central Bank Mazhar Mohammad Saleh told Alsumarianews noting that after the current change each 1166 Iraqi Dinars equal 1 Dollar. “Nominal rate of Dinar doesn’t coincide with its purchasing power or with its real exchange rate against the Dollar,” Saleh revealed.

“The current account of Iraq payments has a surplus of 5 to 8% in comparison with the GDP,” Saleh advanced stressing that this surplus is a strength indicator and points that Central Bank has major reserves.

“Central Bank of Iraq’s decision will affect Dollar exchange rates which slightly increased lately in Iraqi markets,” Saleh declared adding that Iraqi Dinar will become a riveter in Iraqi markets.

Central Bank of Iraq had announced, on Thursday, exchanging Dollar categories for 1166 Dinars per Dollar after it used to sell 1170 Dinars per Dollar. Auctions of the Central Bank are taking place, daily, with the participation of 23 different banks.

At the end of this week’s sessions, Central Bank of Iraq scored a slight decrease of about 1 million Dollars reaching therefore more than 199 million Dollars in comparison with the 200 million Dollars scored on Wednesday.

Deputy Governor of Iraqi Central Bank Mazhar Mohammad Saleh revealed, on December 14, that Central Bank is willing to create 3 money categories following the deletion of 3 zeros from Iraqi Dinar. The currency exchange requires about two years, Saleh pointed out.

Reserves of foreign currencies in Central Bank of Iraq increased, for the first time in Iraqi history, to 60 billion Dollars, Saleh announced on December 6 explaining that Central Bank can curb inflation if it reached two decimal ranks. Current levels don’t raise concern though, he assured.

STATEMENT on so called “RV” Speculation in Iraq

January 3rd 2012

I have been trading the Iraqi Dinar since March 2003 and am one of the oldest Dinar Dealers in the world . We have never written nor followed any bulletin board nor other posts on so called overnight , magical “RV” – Revaluation of the Iraqi Dinar . We do believe in long term appreciation of the Dinar against traditional currencies such as the Euro and US Dollar which we have steadily seen over the past 9 years but urge caution in believing in dramatic overnight currency increases . With this in mind , BEFORE investing in Iraqi currency , please consider this :-

1. Investing in any currency is a HIGH RISK investment – only invest what you can afford to lose .
2. Be fully informed of the political and economic situation of the currency you are buying.
3. Bear in mind that the Iraqi Government has CLEARLY stated VARIOUS times over the past year that they intend deleting 3 zeros from the current Iraqi money . ie. a zero lop in order to ease financial transactions as written about previously in my blog .

If this was to become a reality we will make every effort to exchange the old currency for the new ones for our clients provided we have a sufficient time window and it is carried out in and orderly and patient manner and provided the appropriate authorities allow us to move the old and new currencies freely . We are not responsible in any way for sudden chnages in government policies towards movement of currencies nor any change of currency overnight .

We strive to serve our customers needs but there are limitations to which we can act at times and this needs to be borne clearly in mind .

For this reason we have clients whom we have recommended in the past purchase Call Optiosn through us as well as hold cash within the Iraqi banking system , but equally like any investment , this too comes with risks .

We still belive the long term potential for Iraq is good and over the long term the currency has good potential for appreciation , but all the above mentioned factors must be taken into account before making any decision to purchase the currency . Certainly not on rumours spread over social media and bulletin boards .

3rd January 2012