7-21-2015 *Kaperoni

[Vixen]

7-20-2015 *Kaperoni ~[Are we still floating?] Well, I can assure you the CBI will not randomly assign a new rate...And the rate will be based on the activation of the market economy and growth of that economy. Can it go up fast? Sure it can...And some experts in and out of Iraq expect it to do so because it is..in their words.."grossly undervalued". [when inflation hits how do you see them dealing with that issue at 1166 or pennies on the iqd?] the monetary tool for controlling inflation is raising the value of the currency. That is why the dinar is being held at 1166. I really cannot tell you how fast it would rise. It is really a direct result of the investment in Iraq. [but you said--- I would guess at least 2-4 years before the CBI would be in compliance for the blessing from the IMF to move to VIII (reference Guru Kaperoni's post 7-19-15).] the faster the investment comes into Iraq, and capital flows through the CBI's Capital Account, the more aggressively the CBI would have to manage the rate. [Where is all the influx of foreign currency coming from?] Iraq has signed well over 200 (maybe even higher) investment contracts with other countries for investment in many areas including agriculture, manufacturing, tourism, etc. It will come when the situation is appropriate...And the capital will flow like no other has ever seen before once it starts. And we should all hope for that because that "is" what will raise the value of the dinar.

7-21-2015 *Kaperoni ~If the CBI loan program works, it should help expedite employment and create some stability which hopefully will perpetuate the process which will begin to create inflationary pressure for the CBI... Like a snowball rolling downhill. But really, this all comes back to the same problem... Parliament needs to pass laws to create the environment...the CBI official made a very clear statement...That early 2017 they would release category 50, 100 and 200. The dinar exchange rate has to be appropriate for those valued notes...They did not mention anything lower...So we can make a very educated "guess" as to the rate at that time. I do not think there is anyway to tell when the dinar will start to appreciate unless you can see growth, investment in the market economy. Everything else is speculation as to timing... Which means IMO, that the dinar must appreciate between now and then (2017) to at least a penny or dime...And to be honest, that is pretty substantial. [but Kap you stated / said within a few years we will see a 1 to $1 rate, so your saying not till 2017?] ...again, if you believe what the CBI publishes as a timeframe, then yes. You all must understand the appreciation of the dinar is part of the process. Therefore, when you see the other pieces fall into place, you will know the dinar will rise. I think many economists in Iraq, including Dr Bakri have also said the experts think about "long term" meaning they want to do this right, and not create a situation where the dinar could or would collapses. The dinar clearly can appreciate fast if investors come in...And if it does, it will be great. But it will be directly tied to the economy so it cannot fail! The CBI will never just arbitrary create an exchange rate (RV) without sound principles to support it. Investment and exchange rate are directly related.