Pimpy
I found the steps Iraq would need to take in order to reinstate its $3.22 rate...Stabilize the economy by addressing issues such as inflation, unemployment and corruption...diversifying the economy beyond oil dependence...
Monetary policy - To reinstate a specific exchange rate the Central Bank of Iraq would need to implement appropriate measures...like interest rates, reserve requirements and open market operations.
Third, Foreign Reserves - Iraq's foreign reserves...The more they get the better it is for them...particularly the US dollar would provide the CBI with the necessary resources to support the desired exchange rate...
Currency Auctions ...Adjusting the auction mechanisms and policies could help control the supply and demand dynamics of the IQD...Fifth, Government of Iraq - Investors...have to feel their investment is secure. Having a stable government and stable economy goes a long way. Political stability...that encourages domestic and foreign investment ...Lastly, International Support...IMF and World Bank...these organization can provide financial aid, technical assistance and guidance on implementing economic reforms...Those are the steps necessary to reinstate the $3.22 rate. I still think it'll go up in increments just so they can make sure there is stability in the economy without bankrupting themselves...
Iraqi dinar is going to go up in increments because as you go up one step at a time you're able to see what kind of shock you're going to have to your economy, if at all. As they keep making a move forward with the value of the Iraqi dinar measured against your economy they're able to determine whether they can keep going forward and make the value of the Iraqi dinar increase or whether they should decrease the value of the Iraqi dinar.
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