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[nickyd]

If one can argue that an increased revalue of the Dinar would be a good thing for the Iraqi economy, it seems to me that a sudden sharp increase could be traumatic.  What about an incremental approach?

Let's say, for argument's sake, that a more realistic value of the IQD would be, say, 1 IQD = 2.50 USD.   Would it not be better to have the IQD be revalued by a significant, but not a drastic amount, over a relatively long period of time?  Say the IQD revalues at 1 IQD = 0.50 USD, and then 6 months later, it revalues to 1.50 USD, and continues accordingly so that the 2.50 value would occur in, say, 2-3 years?  It would seem to me that you would not have a run on investers cashing in all at once, with many willing to hold on to a significant amount of their Dinar to cash in at a future time.  It seems that this would make more sense from the Iraqi point of view.

Your thoughts?

[Retro]

1 IQD = 2.50 USD is far from being "incremental,  I would call it a huge sudden jump.

The problem in general with small Incremental increase is as soon as people see a small increase in the value of the Dinar there will be hundreds of thousands of new speculators coming in to the market, they will jump on board for as long as it is still cheap and affordable to buy Dinars.

The Iraqi Central Bank knows it,  this will create a huge problem for Iraq  100 time bigger than what is going on with all of the current speculators.

I doubt it will happen,  .  However a meaningful increase will wipe out most of the wann'a be avarage speculators.

[Sprinter]

An Incremental increase for me would be  2-3 Cents per Dinar.   Anyway at this point I am done with speculations, the universe has a plan of its own for all of us, therefore I am on a wait and see mode.   

[Jimbo]

1 IQD = 2.50 USD is far from being "incremental,  I would call it a huge sudden jump.

The problem in general with small Incremental increase is as soon as people see a small increase in the value of the Dinar there will be hundreds of thousands of new speculators coming in to the market, they will jump on board for as long as it is still cheap and affordable to buy Dinars.

The Iraqi Central Bank knows it,  this will create a huge problem for Iraq  100 time bigger than what is going on with all of the current speculators.

I doubt it will happen,  .  However a meaningful increase will wipe out most of the wann'a be avarage speculators.

I agree meaningful increase will resolve the issue you expressed.
But that can't happen until Iraq can prove its currency can be supported by such a value.  Which I believe will not be for a while.  Not until the violence is reduced substantially and they are actually competitive with Saudi Arabia in oil production as they hope to be.  Right now everything is in theory and expectation.
Once all these things are reality, then a revalue will be justified.
 

[Lola]

True words Jimbo, your view is realistic. 

Iraq has the potential to be a financial power house as we all know.  There is still long way to go before they can backup a RV.  There is no free lunch, Iraq in order to pay off all the speculators in Dollars, must have its oil and agriculture resources up and running on a much higher production capacity.

 

[nick2000]

That makes alot of sense Lola. But it all seems correct. Just have to wait, there's nothing else to do.