Jun 23, 2011

The Central Bank of Iraq is much like our own Central Bank. When Bernanke speaks, he has to be very careful what he says, because everyone reacts to every little nuance.

So when the CBI says that they are now going to "restructure the local currency" and that it "will raise the level of local currency . . . to reach U.S. $1.00," that is a very important announcement. In effect, it appears that the CBI has just announced the FACT of revaluation of its currency, as well as an actual RATE of $1.00/dinar, making it on par with the US dollar.

Of course, they are probably on the low side in their estimate of the new rate. If it revalues at $1.00, the currency is sure to float a lot higher in the coming weeks, unless there is rigorous policy to keep it stable.

If this report is true (and properly translated from Arabic), then we could very well be looking at this week end for this announcement to actually be implemented on the FOREX. At that point, there will be no more dinars available at the current rate.

http://currencynewshound.wordpress.com/2011/06/22/cbi-has-decided-to-execute-monetary-restructuring-raising-of-the-zeros/

Baghdad, June 22 (Rn) – The Central Bank of Iraq, Wednesday, that he decided to restructure the local currency in order to develop the payment system in the country.

The appearance of Mohammed Saleh told the Kurdish news agency (Rn) that “the Central Bank of Iraq has decided to start the execution of the strategic and long-term specialized restructuring of the local currency to the development of the payments system in Iraq.”

He added that “the central bank will raise the level of local currency and the currencies of developing new approaches to reach U.S. $ 100, which would address the economic gap in the financial payments system in the country.”