June 24, 2011 BAGHDAD -- A senior Iraqi Central Bank adviser says the government has adopted a two-pronged plan to restructure the national currency in order to facilitate large transactions and make government accounts more efficient, RFE/RL's Radio Free Iraq (RFI) reports.
Mudhhir Muhammad Salih, a member of the bank's advisory panel, told RFI on June 23 that in the short term, larger banknote denominations of the dinar will be issued to simplify major transactions.
He said that because so many Iraqis still deal mainly in cash, it is cumbersome to carry bags full of money to pay for expensive items like cars. The inconvenience leads people making such purchases -- as well as many entrepreneurs -- to use dollars for those kinds of transactions instead of dinars, something the government wants to end.
He added that large denominations equivalent to around $100 will be issued to simplify major purchases, and new coins and lower denominations will be introduced for smaller transactions.
In the longer term, Saleh said a redenomination is needed wherein three zeros will be dropped so that the 25,000 Iraqi-dinar banknote -- currently the largest denomination -- becomes a 25-dinar note.
He said the change is inevitable, considering the economy is expecting high growth in the coming years with a planned increase in oil production to finance reconstruction projects.
Saleh said there are currently some 29 trillion dinars in circulation in Iraq, represented by some 6 trillion banknotes of various denominations, most of them quite small. He said this also causes complications for the central bank and government, as well as commercial accounting departments.
Saleh said the monetary-restructuring plan was drawn up with the help of foreign experts and financial institutions, including the International Monetary Fund (IMF), of which Iraq has been a member since 1945.
The plan will soon be presented to the cabinet, which is expected to subsequently send a bill to parliament.
Saleh noted that until 1980 the Iraqi dinar exchange rate was 1 dinar/$3.3 compared to $1/1,168 dinars now due to hyperinflation that occurred during the latter part of the late ousted leader Saddam Hussein's reign.
http://www.rferl.org...n/24245867.html
Milliondays chat comments regarding this article..
[millionday] A LOP IS A TOOL THAT IS USED TO DROP THREE ZEROS ECONOMICALLY FROM A COUNTRY`S INFLATION -
[millionday] THEREFORE -- THE INFLATION HAS THREE ZEROS (MUST BE A 1000 OR ABOVE)
[millionday] SIT ON HANDS NOW
[millionday] THE CURRECNY HAS THREE ZEROS
[millionday] THE PRICES HAVE THREE ZEROS
[millionday] A LOP IS AN INFLATION TOOL
[millionday] THE INFLATION IN IRAQ IS 6.6% THERE IS NO POSSIBLE WAY FOR THEM TO LOP
[millionday] IF YOU DONT SIT ON YOUR HANDS -- YOU ARE GOING TO MAKE ME UPSET
[millionday] THE LOP IS USED WHEN ALL THREE ECONOMIC INDICATORS ARE SHOWING THREE ZEROS [
millionday] THE INFLATION PERCENTAGE
[millionday] THE PRICES
[millionday] THE CURRENCY
[millionday] IN THIS CASE THEY ARE NOT LOPPING
[millionday] THE REASON THAT IT IS CONFUSING SOME -- THEY REFUSE TO READ
[millionday] IF SOMEONE COMES IN HERE WITH THE COMMENT THAT IT IS GOING TO LOP -- KNOW THAT THEY ARE HERE FOR ONE OF THREE REASONS [millionday] 1) THEY ARE LOST
[millionday] 2) THEY DONT READ AND HAVE NO KNOWLEDGE OF ECONOMIC TOOLS
[millionday] 3) THEY JUST DONT LIKE HAPPY PEOPLE
[millionday] THEY CALLED THE CURRENCY "THE THREE ZERO CURRENCY" WHEN THE CHANGE WAS MADE IN IRAQ
[millionday] THE CITIZENS ARE THE ONES THAT READ THEIR NEWS
[millionday] THEIR NEWS IS WRITTEN FOR THE CITIZENS JUST AS OURS IS -- SO REMEMBER THAT WHEN WE ARE READING IT THEY ARE WRITING TO THEIR CITIZENS
[millionday] THE PRICES IN THEIR COUNTRY WILL REFLECT THE NEW CURRECNY
[millionday] IF YOU READ THEIR NEWS AS IF YOU WERE SITTING IN THEIR COUNTRY -- IT MAKES ALOT MORE SENSE --
[millionday] THE REPORTS OUTSIDE OF THE COUNTRY ARE NOT CONTRADICTING -- IT IS JUST MEANT FOR GLOBAL NEWS
[millionday] UNDERSTAND THE CONTEXT AND YOU WILL UNDERSTAND THE ARTICLE
[millionday] ALSO -- REMEMBER THAT WHEN KUWAIT RVD -- THE WORLD WAS TOLD FOR A WEEK THAT THEIR CURRECNY WAS USELESS AND WE DID NOT HAVE INTERNET ACCESS AS WIDESPREAD AS IT IS NOW -- OR THE INVESTORS THAT WE HAVE NOW --
[millionday] DO NOT CONFUSE LOP WITH THE REVALUE OF THIS COUNTRY -- REMEMBER WHAT WE HAVE SAID AT PD AND TRUST US
[millionday] 1) CURRENCY HAS THREE ZEROS
[millionday] 2) INFLATION HAS IT TOO (ABOVE 1000)
[millionday] 3) PRICES HAVE THREE ZEROS
[millionday] ALL AT ONCE
millionday] THANK YOU FOR YOUR RESPECT PLEASE RETURN TO YOUR REGULARLY SCHEDULED PROGRAMMING
