PIMPY: "What does Iraq need to do right now to reinstate their old rate of $3.22?, 18 SEPT

  Pimpy  

 Question: "What does Iraq need to do right now to reinstate their old rate of $3.22?" 

 Professor Boskin [of economics] graciously shared the following information which I am pleased to relay to you...It should be able to give you an idea of how far away this thing might be...

The first thing he's talking about is implementing monetary reforms. 

 PIMPY:   We've been hearing about that for years so we know they definitely are implementing monetary reforms.

 PROFESSOR: ...The Central Bank of Iraq may consider removing zeros..

. PIMPY:    Obviously if they're going to remove the zeros off the currency, they're going to re-denominate and print new bank notes.

  PROFESSOR:  Establish a currency basket system...the value of the dinar would be determined against a weighted average of several currencies...

  Reduce their dependency on the dollar. 

 PIMPY:  At the beginning of this year they were not supposed to use the US dollar anymore. 

 PROFESSOR:  ...Focus on diversifying its economy beyond oil dependency...

 PIMPY: Right now...only 89% of [the budget] is dependent on oil sales.  A lot better than where it was. 

 PROFESSOR: Improve trade balance...Enhancing exports...Reducing unnecessary imports ...thereby supporting a stronger dinar. 

 PIMPY:  They have things to trade but not a whole lot of options. 

 PROFESSOR:  Maintain internal stability...Monitor inflation rates...

 PIMPY:   Right now Iraq is somewhere around 5%...He's saying if they want to reinstate the $3.22 rate these things have to be taken care of.  I do find it interesting we've been listening to them talk about deleting the zeros and he's put that in here...A lot of this stuff Iraq has already started...Kudos to Al-Sudani.