Statement by on Proposed Redenomitization of the Iraqi Dinar

Further to my statement of last week , I wish to state the following :-

  • We have been dealing in Dinars since March 2003 . We are not investment advisers and have never purported to give investment advice . We have never expressed any optimistic opinions about a so called RV (revaluation) that appear in bulletin boards and other forms of social media that we have never taken part in. Whilst we are obviously aware of never ending rumors regards this and have clients that firmly believe in this , it is our opinion and has been , that as Iraq rebuilds the currency will slowly appreciate .
  • Purchasing any currency is HIGH RISK . I would never personally advise anyone to purchase what they cannot afford to lose . It is imprudent to put your life savings for example into the Dinar in my opinion .
  • The Iraqis have stated various times since 2005 that they intend to redenominate (zero lop) three 0´s from the Iraqi Dinar. The Central Bank of Iraq , CBI , has now indicated that they have Parliamentary approval for this now and plan to change the old currency currently in circulation for New denominations after a zero lop in September later this year and to run the two currencies side by side for a period of 1 year whilst they do the change . In reality the initial change will have zero impact on the value of the Dinar as it is merely a change of denominations as many other countries have done after having periods of high inflation and then seeing stability in their economy . In the long run , it is my opinion that it could appreciate slowly as the outlook looks brighter in Iraq .
  • With this in mind we have discussed the issue of currency change with principal dealers we currently deal with in the Middle East and whilst we will try our best to have some process to exchange the old for the new , we cannot guarantee this as there are many complications with such a change and many steps involved with returning the currency for change as well as many risks involved . At this stage we are looking at a potential buy back of old currency plan instead of change provided certain criteria are met . These are our current plans , they can and may change over the coming months .
  • Since we commenced dealing in Iraqi money in 2003 we have faced many challenges and shipping of the currency as well as government regulations and controls of the shipping agencies we use to move the money has changed dramatically . It is largely due to this that a change of physical currency for new is complicated for us at the moment . The Iraqis are fully aware that a large percentage of their money supply is in foreign hands , so we hope they will assist also in this process since Buyers always showed immense optimism in their money . Since they have decided to change it now , they should make provisions for the large currency holdings outside their country and provide some means of exchange as well . In no way can we have predicted or be held responsible for any currency change like this . Our responsibility was purely to deliver what what was bought at the time of purchase and this is what we have done for the past 9 years without any complaints of any kind .

  • We cannot be held responsible for government controls , changes of regulations , currency changes and other factors that may occur over time . Purchasing currency always involves risk much like does any purchase of any item , and it is up to our buyers to be fully informed at the time of purchase as to what they are buying and the risks involved .
  • As stated above , we are actively looking into plans to assist with the currency change for clients we have dealt with and who might be interested in what we are able to propose . As the issue becomes clearer we will divulge further information .
  • Potential buyers and holders of current Iraqi Dinars are fully entitled to opinions they might have on the Dinar , the above is our honest opinion on things as they stand now as of today . The Iraqis may still delay the zero lop and external factors may affect it but I felt it necessary to make the above statement based on what we are aware of .

Central Bank of Iraq Currency Redenomitization – Statement by

Statement regards CBI intention to Redenomitize the Iraqi Currency commencing September 2012 – by

1. There has been talk for many years now (since 2005/2006) that if there was a redenomination or a dropping of the three zeros there would be a recall of all denominations of notes printed in 2003 and replaced by the New Iraqi Currency

2. We will try our best to exchange the old 2003 currency for the new one providing we are able to move the currency freely through normal logistical channels and in turn we will charge a fee for this and in addition the re shipping fee . It will be our client´s responsibility to return the old Dinars for exchange to our main dealing office in Amman , Jordan .

3. The Central Bank of Iraq indicates they will allow a period of 1 year for these notes to be changed and that during this period both old and new currencies will run side by side .

4. What do dropping three zeros(re-denominitization) mean? When governments drop zeros in currency it means several positive things, one being that the currency is restructuring and the second being that it is trying to lower the inflation rate. The 25,000 Dinar Note would become 25 Iraqi Dinar, and the 10,000 Dinar Note would become 10 Iraqi Dinar for example , but the value of all the notes would be the same. The new money would have the same value in trade as the old money , the only difference would be for accounting purposes of Iraq as a country as the money supply in Iraq currently is too large for realistic accounting purposes.

Removing zeros from Iraqi dinar to start in September

20 Feb 2012

BAGHDAD – The process of removing three zeros from the Iraqi dinar and replacing current banknotes with new ones will begin in September, announced the economic committee of the Council of Representatives as part of an agreement with the Iraqi Central Bank (ICB).

The announcement, which will see the ICB re-print 30tr dinars ($26bn), was made despite government fear over the project.

Economic committee member Abdul-Hussein Abtan said: “The agreement includes granting the process of switching currency [for a] full year where [both the] old and new currencies will be dealt in the market during this stage.”

The ICB described the project as a positive move for the Iraqi economy. But particular arms of government expressed fear that the project will increase cases of money laundering and are working to convince the ICB to stop the process. The securities committee said deletion of the zeros will affect negatively financial trading in the stock market.

Abtan added however that the process “will contribute to dealing [with] inflation and facilitating economic cooperation with international banks and reducing social differences in the community.”

The ICB previously said that it will consider the requirements of the project with the Council of Ministers to determine whether or not a law needs to be implemented.

The financial committee of the Council of Representatives said on Sunday that the passing of such law would allow Iraq to address economic inflation.

The move to delete the zeros will reduce the number of bank notes in circulation and simplify Iraq’s payment system.

The ICB is responsible for maintaining price stability, implementing monetary policy and regulating the banking sector.
© AK News 2012

Iraq has more than $60 billion in foreign reserves

Iraq business
07 Feb 2012

Iraq now has over $60 million in foreign currency reserves as a result of the country’s oil sales, according to a report from Azzaman.

Mudher Saleh, a consultant with Iraq’s Central Bank, said the reserves are the highest in the country’s history, and are more than enough to cover the total volume of national currency currently in circulation.

Saleh made the remarks following a surge in demand for the US dollar, fueled mainly by sanctions on neighboring Syria and Iran, saying the Central Bank was determined to meet demand for dollars. The bank had no problems selling dollars in return for dinars, he added, and this has boosted confidence in the local currency.

External trade with the dinar as the currency of choice was on the increase. Trade flow between Iraq and Iran and Syria has skyrocketed recently, according to Azzaman, with Iraq supplying the demand for sanctioned goods.