STATUS OF THE RV
As the choo choo train rolls down the tracks to its final destination, the reinstatement we read yet another article by Ali Daadoush, the Iraqi economists. Remember him? He wrote a couple articles in the past about how the Project to Delete the Zeros will work and the benefits and drawbacks of it.
So, just recently he published yet another article on this same subject matter titled “DELETE ZEROS AND EVALUATE THE DINAR“.
But this time his new article is concentrating on the revaluation part giving examples of countries that recently revalued and how it worked. The part that sparked my interest the most was about when he wrote and I quote “After the revaluation, it was linked to a basket of global currencies.”
He was referring to the Chinese government Yuan and its revaluation of its currency in 2005, which was then linked to the US dollar prior to the revaluation.
However, after the revaluation, it was linked to a basket of global currencies. Why is he telling us this?
Is he saying Iraq will experience the same kind of move with the IQD?
I believe he is telling the citizens of Iraq that this also is what will occur to the IQD when it too revalues soon.
I have to tell you again this has been the IMF’s plan all along to take the Iraqi dinar off the sole de facto peg to the US dollar and then place it in a basket of currencies with weighted percentages for each of the currencies.
This will mitigate the risks on the peg if anyone of the currencies takes a hit. In 2011 Iraq published an article by the CBI also telling us that five (5) currencies would be used in the basket and a year later changed it to six (6).
We will have to wait to see what the final basket looks like. These are the currencies of the major developed countries. The author does not go on to explain how these new pegs work in these baskets so I will explain a bit today for you.
You can reference the PDF on the internet. From this link for further information on this subject matter. It explains the technical issues behind the choice, composition, and operation of a basket peg under a system of floating exchange rates. It is by economist Shinji Takagi.
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