Iraqi Dinar – Overrun Data
There has been a lot of speculation about rebasing or “trimming” the three zeros of the Iraqi dinar lately and there is a lot of misleading information about what this would mean and I would like to give you just the facts.
No one knows if and when Iraq will change the base of the dinar.
Yes, the Central Bank has talked about removing three zeros from the Dinar, however no definitive steps have been taken to proceed. If the Central Bank decides to change the base of the Dinar, nobody knows exactly when it will happen. Any rumors about the timing are speculative.
The base change of the Dinar is expected to be neutral from the monetary point of view and the Dinar banknotes will maintain their value against the dollar.
Your physical bill, either 25,000 Iraqi dinars, 10,000 Iraqi dinars, etc. it is expected to hold its value against the dollar. Removing the three zeros would mean that those high denomination dinars will no longer be printed and an old 25,000 Iraqi dinar note (the physical note) will be treated as the new 25 Iraqi dinar note. There will be a window of time to exchange notes. Just as an example, let’s say right now $1 buys you 1,000 IQDs. Let’s say that tomorrow, the Central Bank drops three zeros from the Dinar. You can now exchange your old 1,000 Iraqi dinar note for a new 1 Iraqi dinar note: they are treated as equals. So if the base change, as expected, is currency neutral, $1 buys you a new 1 Iraqi dinar note (which is the same as an old 1000 Iraqi dinar note).
This does not hurt Iraqi dinar investors! Please note that removing the zeros is a decision to be made by the Iraqi government and the Central Bank. For dinar investors to profit from the dinar, the value of the dinar must rise against the dollar, which is based, among other things, on the stability of the Iraqi government and the strength of the economy. Removing the zeros may change the appearance of the notes, but it doesn’t change the way any investor will make money from the dinar: strengthening Iraq as a country and not just an arbitrary decision by the Iraqi government. If one country could drastically change the value of its currency by changing the base, all countries would! We care about restoring strength to the Iraqi economy as a whole, which is the only way dinar investors will make a profit.
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