The biggest article out right now on the Iraqi Dinar seems to be the one about redenomination. Us Dinar speculators are hearing more and more talk about the slicing and revaluing.
One such article came out today on Reuters and several other news agencies regarding the Central Bank of Iraq’s decision in 2007 to come out with lower denominations. The article started with a headline that reads,
“Iraq plans to slice three zeros off currency notes”
And then later in the article it says:
“The dinar’s value will remain unchanged, he said.”
Are you kidding me, Reuters? How can the Iraqi Dinar “slice three zeros” and then remain unchanged in value? It can’t, so one of your points is wrong! I’m betting on the first point being wrong.
It’s widely accepted that sometimes countries will “lop” zeros, either off the notes or off the exchange rates. This is usually necessary when inflation is rampant or there are multiple currencies in place. Iraq has neither, so we have to wonder whether Iraq would truly “lop” it’s currency.
Next, Iraq has been allowed into the Extractive Industries Transparency Initiative (EITI) by unanimous decision, according to the Iraqi Ministry of Oil. Iraq will have one of the largest reserves among the groups in this organization, which obviously has positive implications for Iraq’s political influence on future oil based transactions.
And when I say “oil”, I mean black gold. For all the “green” movements in the world right now, oil is still king and will remain king for a long time to come.