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Wednesday, June 27, 2018

KAPERONI TIDBIT, 27 JUNE

I believe the CBI will leave the peg and float the currency allowing the currency to rise gradually.  What that means is the value of the dinar will go up but just not overnight. I believe it could take 6 months to 2 years for it to reach parity with the dollar once it begins. Again keep in mind there's a lot of factors that play on how fast a dinar rises primarily how fast investment comes into the country. That is why it's important that the CBI properly prepare everything. Not only the banking system but the laws to support investment and having a stable investment climate


with 60-plus trillion dinar in circulation, if you're expecting any kind of overnight event you're dreaming other than a LOP...a one-to-one rate or higher then it's going to be a LOP.   Moving to a float is the right thing to do and it allows the world to set the value as well as counter inflationary pressure created by investment. Such a move will not give any kind of overnight RV or RI but a gradual appreciation overtime.  And we may have to wait several months or even a year or more for it to rise to a level that we all are comfortable with.  Just remember monetary policy is not a random event that every action the CBI takes has a purpose.

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