"ANALYSIS OF "FREE FLOAT" OR "LOP" OF THE IQD" BY PIMPY AND BREITLING, 19 OCT

 Pimpy 

 In Iraq they have the ability IMO to do a controlled free float...People ask me, 

'Why doesn't Iraqi dinar free float?' 

Because it could be very very risky. 

 They could benefit from it.  They might go in the right direction.  People might think they have something to offer...worth investing into, that they have a bright strong future...which I think Iraq does and

  I think they could benefit from being on the Forex but they have to have the restrictions removed off their currency...Iraqi dinar is on the local one [Forex].  They're not on the big Forex.  

There's still problems with the exchange rate...Right now the solution they've come up with is increasing the interest rates for customers if they deposit their money and leave it there [In a bank].  7.5% is a pretty good size interest rate if you're going to leave your money in a deposit at your bank.  In the past we used to have stuff like that but we don't anymore unfortunately.  

Article: "Al-Kadhimi: The decision to increase the interest rate will activate the banking system inside Iraq" 

  Will increasing interest rates on your account to 7.5% draw people in?  Heck yeah it will!  If a bank did that in American you would see a lot of people run to it...

 Quote:   " The Central bank's decision...falls within banking reform measures... of prime minister Al-Sudani's directives... The decision...will certainly encourage citizens to deposit in banks which will stimulate financial movement...in addition to... reducing the exchange rate of the dollar against the Iraqi dinar."  

That's really what the goal is...If this doesn't work there's going to be other measures that need to be taken in order for them to do something about closing that gap between the parallel market and the set rate of 1320 dinar.

 Breitling

  LOP - If they're going to LOP they don't need to shut the dollar off in their country.  They don't need to reduce their money supply.  They don't need to get rid of the 50 dinar note.  

They don't need to pass banking laws.  They would have said that's what they wanted to do.  They said they wanted to add value to their currency and that's it.