Frank26
Notice even in the midst of all this military action with Iran next to you [Iraq],
Saleh who is in charge of the Iraqi finances comes out first thing this morning and tells you, 'We are secure and stable.' ;
What was it that we needed in order for you to have a new exchange rate with lower note currency?
...Security and stability...
Q: What effect will Israel's airstrikes on Iran have on any potential revaluation of the Iraqi dinar?
A: This week's Israeli airstrikes on Iran, targeting nuclear and military sites, will likely have a negative effect on any potential revaluation of the Iraqi Dinar, at least in the short term. Here's why:
Increased Regional Instability
The conflict between Israel and Iran is a major source of instability in the Middle East. Iraq, being a direct neighbour to Iran and having complex political and economic ties with both countries, is highly susceptible to the fallout from such tensions. Increased regional conflict generally leads to capital flight and a preference for safer currencies like the US dollar, which puts downward pressure on local currencies like the Iraqi Dinar .
Safe-Haven Demand for USD
As investors and even ordinary citizens become more apprehensive about the future, they tend to move their assets into more stable and liquid currencies. The US dollar is traditionally seen as a global safe-haven currency. This increased demand for USD in Iraq would further weaken the Dinar against the dollar in the parallel markets, making any revaluation less likely.
Impact on Oil Prices
While a spike in oil prices due to regional conflict might seem beneficial for an oil-dependent economy like Iraq's, the immediate effect on the Dinar is often outweighed by the increased instability. Furthermore, if the conflict were to escalate and impact shipping routes like the Strait of Hormuz, Iraq's oil export revenues could be severely affected, which would be detrimental to the Dinar.
Smuggling and Sanctions Concerns
Iraq has faced challenges with dollar smuggling to Iran, partly due to US sanctions on Iran. Escalated tensions and potential new sanctions could exacerbate these issues, further disrupting Iraq's financial system and the Dinar's stability.
Political and Economic Uncertainty in Iraq
The Iraqi Dinar's value is already influenced by a range of internal factors, including political stability, government spending, and efforts to control corruption. Regional conflicts add another layer of uncertainty, making it harder for the Central Bank of Iraq to manage the exchange rate and implement policies that could lead to a revaluation.
MarkZ
[via PDK]
Question: Is this attack on Iraq the start of the RV or a distraction?
MarkZ: Maybe it's both. We may be heading to a culmination here.
With this unrest gas and oil prices are about to go up…they may spike in the next day or two…which will mean a spike at the gas pumps...oil prices are in the low 70’s right now…an oil price spike would put Iraq well above the number they needed to revalue their currency.
As part of efforts to protect domestic industry, the Iraqi Cabinet has approved the imposition of an additional 20% customs duty on imported aluminium cans used for carbonated beverages, juices, and energy drinks.
This brings the total tariff to 50% per unit of measurement, applicable to imports from all countries and origins.
The measure will be in effect for four years without reduction, with implementation to begin four months after the decision date.
The General Authority for Customs has been tasked with enforcing the additional tariff and regularly informing the Ministry of Industry and Minerals of the quantity and value of imports, as well as the additional revenues collected.
The ministry will assess the effectiveness of the tariff in protecting the domestic producer, including the complainant's ability to meet local market demand, and will review the policy one year after implementation in line with the Product Protection Law.
(Source: Iraqi Government)
Walkingstick
Iraqi banks are mirroring our banks in the United States.
IMO these International standards are not for 1310. They're not. It makes no sense.
That's why 1310 has become silent. ; It doesn't make sense internationally.
It doesn't make sense logically. There has to be a new rate...
PMF Militia Leaves Iraq & CBI Prepares Infrastructure – Signals for Iraqi Dinar Holders Introduction Recent developments in Iraq show a ...