Pimpy
Iraq has a few more things they really have to fix. Taxation [and] their tax system in general. In addition to that they have to learn how to balance a budget...Balancing their budget, fixing their tax system would go a long ways in Iraq...
If you increase your money supply that is going to cause the value of your currency to go down. Think supply and demand. The more you have of something the less valuable it is. What does that mean?
You have to get rid of the 3-zeros. By getting rid of the 3 zeros you need less bills to make purchases...
90% of Iraq's exports are in oil... Remember Iraq wants to be competitive in the trade market. Increases in their exchange rate would cause the items they are exporting to go up in cost. Since 90% of the exports is oil, this is different...An increase in Iraq's exchange rate could lead to a stronger Iraqi dinar relative to other currencies. This would mean for each unit of oil sold, Iraq would receive more foreign currency.
Iraq's revenues from oil exports could potentially rise. So they can increase their exchange rate and what they could do to balance that increase in their exchange rate is either increase or decrease their oil production...We also know their foreign currency reserves have increased to $115 billion. Increasing the exchange rate would also increase their currency holding, which is good because they can us that to protect the Iraqi dinar. Increasing the exchange rate would benefit Iraq big time.
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