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Cons Edition 100 000

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1 Cons Edition 100 000 on Tue Sep 06, 2016 2:53 am

ikea


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Cons Edition 100 000

Written by Economic news editor
Date: September 05, 2016


Warned a number of experts and specialists in financial and Economic Affairs, the Central Bank of new edition 100 thousand dinars class and put it on the market, because it will increase prices and raise inflation rates as well as they will reduce the value of the Iraqi dinar and eliminate small groups of currency which will impact directly on citizens.

And Central Bank official revealed on condition of anonymity, the Central Bank's intention to issue a new edition category 100 thousand dinars to the market.

The source told reporters that "Iraq NEN" vassal "category the 100 000 printed creative including model and we will choose the time for placing on the market",

noting that "put on the market to help stimulate the economy through commercial transactions between traders and exchanges between companies, as well as the 100 thousand easy storage and pregnancy and designed along the lines of international currency if that high level security system it is difficult to falsify.

"Put it on the market requires, inter alia, promotional campaign to learn about, and being tied or the affinity (100) us dollars".

The Economist warned, just ask Greg coins with large groups in the market because it would affect citizens and indirectly in terms of increasing prices and rising inflation, as well as the breakdown of parliamentary value national currency.

Greg said in press statements vassal "NEN an Iraq that" time is not appropriate to ask the Edition 100 dinars that the Iraqi economy is at a precarious and unstable, especially given the low oil prices and limited income.

He added that this new class would cancel the deal with small groups gradually and be done the 1000 dinar smaller class instead of 250 dinars.

Finance expert, Nabil Madi, some analysts and economists thinks that selling the dollar on the Central Bank's auction the same amount and enter the new 100 thousand dinars to the market without pulling the equivalent of dinar would collapse",

and in my view it's not a relationship between Central Bank auction, which is sticky nominal exchange rate of the dinar against the dollar, and enter the category 100 thousand dinars dinar's collapse,

but the effect is to increase the number of times the circulation of Monetary Union ( The dinar) within an economy which increase the speed of circulation coins in the Iraqi economy.

He added that "as economic theory, the process of printing large new categories mean increasing the money supply (liquidity) which fits is directly related to increased rotation speed (fast) that speed of trading that proportional speed inflation caused by rising prices resulting from increased demand on the supply of new goods and services as a result of increasing liquidity."

"So if demand for domestic goods, displayed almost constant at the moment for lack of production or the alien comparable galore so that local product and especially satellite from filling a gap increased demand from spamming purchased, and no modern agricultural production techniques in order to provide a new view of agricultural product filling consumer needs leading to Ziad towards consumer demand to the product, which means that the trader to increase the import of foreign product to fill the lack of supply of goods The new application resulting from slippage to raise cash.

"Increasing Iraqi imports from abroad means increased absorption of the dollar from inside Iraq to the outside, which means increasing the desire of traders and speculators on their dollar of increased Central Bank auctions that desire means the dollar markup within the following auctions to increase the proportion of depreciation of the Iraqi dinar in front of other currencies including the dollar, which increases the desire speculators at this time to get the dollar though a higher price than the former price within Iraq to sign them down at a higher rate for the dinar Current time and dollar."

This brings together experts and analysts that it is appropriate to ask relevant currencies large groups because of what he's going through the Iraqi market instability.

The Central Bank has issued a new edition last year 50 000 to local market announced his intention to reprint another new currency category 100 thousand dinars.

M/denanner

2 Re: Cons Edition 100 000 on Tue Sep 06, 2016 7:28 am

Shredd

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This will of course help with reducing the note count which is good. It will be interesting to see what happens to the rates during this time. Decreasing the value is noted here which makes sense but supply is what I'm curious to see.


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3 Re: Cons Edition 100 000 on Tue Sep 06, 2016 8:33 am

tlm724

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Thank you ikea for posting and thank you Shredd for your comments


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4 Re: Cons Edition 100 000 on Tue Sep 06, 2016 1:15 pm

zlynn


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This article is a better translation than one I saw somewhere else.

The article is disappointing to me, because I think it indicates that we need to brace for a redenomination, which I think some call a lop. I welcome correction if I am wrong. In fact, I WANT to be wrong, but here's how I comprehend this article, based on these two statements:

"Put it on the market requires, inter alia, promotional campaign to learn about, and being tied or the affinity (100) us dollars".

"He added that this new class would cancel the deal with small groups gradually and be done the 1000 dinar smaller class instead of 250 dinars."

The first statement indicates the anticipated per note value after removing three zeros. The 100,000 note becomes 100 dinars equal to 100 US dollars, or 1 to 1. Likewise, the 50,000 note becomes 50 dinars equal to 50 US dollars, and 25,000 note becomes 25 dinars equal to 25 US dollars (not  $25,000). Most of us paid around $25 per 25K note. Even if the rate increased to $3 per dinar, the 25,000 note would then be worth $75 per note (not $75,000).

The second statement supports this view, stating that the 1000 note will be the smallest class, instead of the 250 that is now the smallest class. In other words, applying the information from the first statement, the 1000 note, after removing three zeros, will become 1 dinar, equal to 1 USD. The 250 will be demonetized because it would have more face value than all the other notes, after three zeros are removed. Demonetizing the 250 dinars note would leave the 1000 dinar note minus three zeros as the smallest class, equal to 1 USD. For the same or similar reason, the 50 dinars note was demonetized before releasing the 50,000 note. The 50 dinars note would have conflicted with the 50,000 dinars note after the expected removal of three zeros.  

My biggest concern in bracing for a redenomination is whether or not any US bank will exchange USD for Iraqi dinars. Would a bank actually exchange the US $100 bill for one 100,000 dinars note or four 25,000 dinars notes? It's hard for me to come up with a reason why they would. I can come up with several reasons why they would not.

I truly hope someone will show me that I'm wrong in my comprehension of the article.

5 Re: Cons Edition 100 000 on Tue Sep 06, 2016 7:42 pm

Shredd

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Logical thinking indeed but history shows us a redenomination is done when an economy is failing. Furthermore, reducing the note count, which is what the cbi has been doi g fir the past few years, would be pointless if they were going to simply lop.

Iraq has great wealth and has been making great strides in building the economic infrastructure for investment. They don't have a failed system, they already redenominated when sadaam was overthrown, they've been focussing on reducing the note count and they are rebuilding in a way that welcomes investment.

I know the larger note release seems counterproductive but the 50k has been out for sone time and the rate hasn't plummeted. This is a long play but they are still moving forward.


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6 Re: Cons Edition 100 000 on Tue Sep 06, 2016 9:33 pm

Busyman


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I subscribe the idea that it may be a LOP in country, but we are looking for an exchange rate increase IMO

7 Re: Cons Edition 100 000 on Tue Sep 06, 2016 9:58 pm

zlynn


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Thank you so much, Shredd! I feel much better. I appreciate the time you took to post a reply.

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