The question I have is how the process of revaluation of the dinar changes (if any) being pegged to gold. In other words, would it be a gradual or a more sudden increase?] There would be no “revaluation” but rather now a value that follows the gold standard. This is what we are being told and how I understand it. One possible scenario: The CBI will just announce that the IQD is now backed the the gold standard. So if you go to the bank, now any bank for that matter, they would simply looked up the buy rate at the time and pay you in USD that value.
So lets look at both sides of the coin now. So it is not pegged to to Gold, what else could it be pegged to? Yes the USD, which is still fairly close to a 1:1 or a bit less at the moment, regardless worth something. If there will be no immediate future value, …all will cash in and walk away. So who are the winners here, most everyone including yourselves. Now it comes out at a $3 plus rate, who is the winners here, again you are, but I do not see how Iraq can support that type of cash out now that oil is so low. Iraq needs to be able to set themselves up for success, not a rate that cannot be sustained.
[Let’s say hypothetically that the switch is flipped today and the dinar is now backed by Gold. What would the dinar value be at this point? Is it even possible to determine that or is there more to it than just looking at the price of Gold?] New York Gold Spot Price (24hrs) Gold Price Per Ounce $1,101.65…Here is how it was explained to me. Lets say the CBI said that one IQD is now backed by one ounce of gold. It is my understanding that one IQD would be equal to $1,101.65 or a 25K note would be worth $27,541.25 USD, less any spread and fees.
This is not an opinion I bring but a FACT. But there is lots of news coming out about the necessity to do something with the value of the dinar against the US dollar. Since late October it is common conversation by Iraqi economists to put pressure on the GOI and the CBI to do something to raise the value of the dinar. We know that the dinar must go international if they are to be as diversified as they claim the need to move towards in their economy to get over this economic crisis. But it is not as simple as just “pulling the trigger” on the RV to correct the situation. No matter how hard Iraq wants the RV they will not be allowed to do it until they are fully ready.
…just this week we witnessed a news brief by the IMF on the SMP and then we read about more February timelines / deadlines for Iraq to accomplish certain goals related to currency reform. This was all excellent news and now we wait and watch to see their next move. This is all we can do and so speculation…will not make the RV happen any sooner. In fact it is not even about the RV but rather getting their currency back online so Iraq can easily and efficiently trade with the rest of the world. …my contact in the CBI was trying to tell me…to be aware of any news related to currency reform. This statement in itself was telling me we are not that far from the RV.