Article: “Central bank: Stamping contracted 10 000 specie to diversify their savings and get a 24 carat gold” I suspect that the Iraqi economy is skewed so that the vast majority of the money is held by a small percentage of the population.
Therefore, while this won’t mean anything to the vast majority of the people in Iraq because they cannot afford to purchase the coin, those who can, will. This small percentage of the people probably hold over 80% of the dinars anyway.
Furthermore, since gold is a “real” asset which will move up and down in value as gold around the world does, this will insulate the gold holders from a falling dinar.
Therefore, this “adjustment” of the rate to a lower rate is almost certainly being done to scare the big fish into purchasing the gold coins, thereby turning in their paper money. All in all this seems like a well thought out plan on the part of the CBI to reduce the paper money in Iraq quickly.
Quote: “Central banks are buying gold coins called gold and confirms the arrival of the 100 dinar coin” …this new CBI announcement appears to be straight forward and is in keeping with what they said they would do four weeks ago.
At that time the CBI stated that 70% of all of the currency that is out in Iraq was being kept by individual citizens and that they (CBI) had plans to draw that currency into the banks. Well, here it is. However, what is more amazing is what appears to be the placing of a value upon the individual dinar based upon a world accept value of gold.
If the translation is correct the CBI is stating that they are selling 15 and 25 gram coins for 100 IQD and 250 IQD. The current spot price of gold is $1,100 per ounce. 25 grams is .77 oz. .77 of $1,100 is $847. Divide $847 by the 250 IQD and you have an equal value of $3.38 per IQD.
Interesting that the CBI would offer an accepted asset of great value for a currency of less value UNLESS the value is in the process of changing.
Parliament’s Finance Committee unveiled a project to reconsider the dinar exchange rate against the dollar with the government and the central bank, denying talk about the quest to change the dollar exchange rate thousand dinars.
The decision of the Finance Committee MP Ahmad Haji Friday, “This is contrary to the fact that price of the dollar against the dinar will not be up to 200,000 dinars for one hundred dollars, pointing out that there was a project studied by the Central Bank and the Council of Ministers, the Finance Committee to reconsider the exchange rate of The dollar against the dinar.”
It is still a project under study and no decision, where they are studying Iraq could reconsider the exchange rate, whether it is in the Government’s interest or detrimental to the citizen?, noting that a review of the exchange rate would be the government’s interest But hurt the citizens, as this will increase the exchange rate to runaway inflation, an increase in commodity prices, stressing the need to take into consideration all aspects before making a decision.
The deputy Haji said that a review would be an increase in the dollar, any decline in the price of the dinar against the dollar, because the government can not raise the price of the dinar against the dollar, at the time of its imports in dollars and expenditure in dinars, pointing out that the increase in price of the dollar is the benefit to the government.
Iraq faces a financial crisis due to the sharp decline of oil, reaching financial budget for this year total expenses of more than 105 trillion deficit accounted for 22.8%.
Finance Minister Hoshyar Zebari noted on Monday in a newspaper interview that “there are several alternatives [oil], including borrowing from international institutions, few benefits, we did it.
For example we have received help from The International Monetary Fund, a few days ago we received one billion and 200 million dollars from the World Bank, we have introduced a monitoring program on how we manage the financial and economic policy, if we could get more help, as we intend to sell sovereign bonds, because the situation in Iraq this year better than last year From this point of view.”
He explained that “The other option is to raise the Iraqi dinar exchange rate, although it may be a risk having repercussions.”