"RV UPDATE" BY PIMPY, 3 APRIL

 Pimpy 

 Community request  "Please tell us about the smaller notes, 500s, 250 and 50s. Will they be a throwaway?  What is the good and bad of them?"  If they do a re-denomination there won't be a need for a 500 or 250 note...They're going to create the notes like the ones we have.  You will see a 1, 5, 10, 20, 50 and 100 denomination...They don't lose the purchasing power.  The 10 has the same purchasing power as a 10,000.  The 5 has the same purchasing power as a 5,000.  The one has the same purchasing power as the 1,000...

 Community Comment:   "It's the exchange rate.  I don't know where they get taking zeros off the bills."   Every study out there that talks about the deletion of the zeros tells you it comes off the bank notes...If they delete the zeros, your 25,000 becomes a 25 dinar.  They're going to take the zeros off [the rate as well].  .00076 becomes .76...still the same value.  You have a smaller denominated note but your purchasing power stays the same.

  We're dealing with two different things... We have what's known as the nominal value, which is the numbers on the bank notes and then we have an exchange rate value.  That's two different things.

This is [from] the World Bank data bank - Real Effective Exchange Rate is the nominal effective exchange rate in measure of the value of a currency against a weighted average of several foreign currencies divided by a price denominator or index of costs...   Iraq already reports a real effective exchange rate.  They report it all the time...It's reported to the IMF regularly...

The IMF, WTO, World Bank and whoever don't have a say whether or not Iraq LOPS off their zeros.  That is decided by the Central Bank of Iraq as well as the government of Iraq.   You're confusing the 'lopping of the zeros', 'the deletion of the zeros', 'the reducing of the zeros', 'the removing of the zeros', as somehow a loss in value.  It is a neutral event.  It doesn't affect outside investment into the Iraqi dinar.  I told you when you remove the zeros all you're doing is lowing the nominal value of the currency.  Has nothing to do Iraq's exchange rate versus other wold currencies - noting whatsoever.  

https://dinarevaluation.blogspot.com/2024/03/rv-update-by-pimpy-31-march.html