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[Jimbo]

http://www.rferl.org/content/Iraq_Planning_Currency_Redenomination/1950504.html


February 06, 2010
BAGHDAD -- The Iraqi Central Bank is planning to redenominate the national currency in an effort to ease transactions and allow people to carry less paper money, RFE/RL's Radio Free Iraq (RFI) reports.

Mudhhir Muhammad Salih, a member of a Central Bank advisory panel, told RFI that a plan has been made to remove three zeros from the currency and phase out the current banknotes late this year.

Salih said by the end of 2010 the new banknotes will be fully introduced while the old banknotes will be gradually removed from circulation. He did not specify when the new notes would be issued.

Both will be legal tender in Iraq until the old notes are completely withdrawn.

Iraqi officials have had a long-running plan to redenominate the Iraqi dinar. In 2006, the Finance Ministry recommended to the Central Bank that it carry out such a plan.

Salih pointed out that banks are having a hard time accepting cash savings and deposits, but by dropping the zeros it will make it easier for both the banks to deal with their customers and for the general public to carry money. He said some 80 percent of Iraq's money supply is cash in circulation.

Salih added that in 1990 the value of banknotes in circulation was about 25 billion Iraqi dinars but is currently some 25 trillion dinars.

Economic analyst Hilal al-Tahhan told RFI that the bank's move is overdue. He said he expects the currency change to go smoothly because of the decision to allow both the old and new banknotes to coexist, leading to less turbulence in the economy.

The current exchange rate is 1,167 Iraqi dinars to the U.S. dollar.

[frantastic1]

So how will be change ours over here in the states ? And when we do are we still waiting on a rv  with the new money ??    

[Sprinter]

I am not worried about how we are going to change to the new notes,  obviously they are giving plenty of time to do that,  and when it will happen the solutions will come. 

[Jimbo]

So how will be change ours over here in the states ? And when we do are we still waiting on a rv  with the new money ??    

I have no idea what this means.  I figured I'd share what I found out myself.

It doesn't look good though.


I am waiting for an article from Reuters or Associated Press with this news before I come to any conclusions.

[Lola]

Jimbo, if and when it will happen I am sure all the Exchange dealers would want to make extra commission,  they will charge us.. and we will convert our Dinar to the new currency.

The article say that the exchange from the old to the new Dinar will have no time limit. A solution will always be there as long as someone can make a profit , weather Banks or online Dealers.

As you said, for now lets see if this article is supported by any other sources, and beyond that,  well...  will cross that bridge when we get there.  If you noticed not too many of us here are stressed about it.  Time will tell.

[I-man]

Agree Lola,  I think most of us here are pro at it, facts, research, and less drama.

Personally I will wait until we know more.

Besides I have no doubt that we will be able to exchange if they decide to print new bills.  All other stories are just speculations at this point.

[nickyd]

If the "old" IQD will continue to be legal tender until they are phased out of circulation, and there is no deadline to trade them in for the "new" IQD, why should any of us incur the fee to replace the money? 

If, say, an "old" 25,000 IQD bill is equal in value to, say, a "new" 250 IQD bill, and both remain in circulation simultaneously as legal tender, give me a reason why I should pay a dealer to get the new bills.

Nicky

[Amin]

I am with you on this Nicky,  you should see the Panic on some other discussion sites... unbelievable.

[frantastic1]

It said you would have up to 1 to 2 years and the old dinars would be done . so you would have to trade in or lose out .

[nickyd]

Although the article talks about the new and old bills "co-existing," I would assume that is being done to avoid panic and a rush to convert before the old bills become worthless.  However, I would think that all commercial transactions would be done in new bills exclusively as of a date certain -- and the old bills would only be accepted in the banks for conversion after that date.  Otherwise, it would be confusing to have 2 sets of prices for everything, and co-mingling the currencies, "coesistence" notwithstanding.

In other words, on conversion day, if an Iraqi needs to go to the market to buy some bread and milk, and he doesn't happen to have any "new" money, he would need to go to the bank first to exchange his old money before he headed off to the market.  These trips to the bank would become less and less frequent as salaries and payments are done with the new money and the old bills are taken out of circulation and put through the shredder (or furnace?).

[frantastic1]

How about like this you have 1 year to turn in the old money then it is no good !

In that year the money is the same as 25,000 or 25 .

 stop turning this into a bunch of bull shit

[marion]

Frantastic,  one thing we all agree on this site is to respect all opinions,  and be respectful to others.  Thanks

[Retro]

Nothing happens until it happens, am I going to lose sleep over it and try to second guess what the Iraqis are planning to do ?

hell No !