DrDinar Blog

Last 2011, Iraq was surrounded with several speculations about its booming currency and its new set of government officials but, the said year was a good start for the country’s economy. Now, let us take a closer look about some possibilities in the year 2012 and understand some facts behind the real increase of Iraqi Dinar price against the US dollar which is believed as a decision announced by the central bank of Iraq. Will there be more opportunities this 2012 than in the previous years?

The Economy of Iraq

Will the Central Bank of Iraq be strong enough to increase the Iraqi Dinar price against the USD? Is the economic growth reliable to raise the price? If we are going to check the current status of the country, we could just look at its oil reserves. As a matter of fact, Parliamentary Finance Committee recently stated that the country does not need to borrow from the International Monetary Fund although the budget deficit for this year is estimated to be around 13 trillion dinars. Why? The Finance Committee of the country knows that the deficit can be paid from the price of oil without obstructions.

For most people, they take this as budget deficit but, Dinar investors treat this as a part of the nation’s necessities given the fact that the country exports more than 2 million barrels of oil in a day. With an oil price of not less than $100, it seems that the economy will keep on pointing upward. Najiba Najib, a member of the Finance Committee, was even straight forward when she told the Kurdish news agency about the recent economic study about getting calculations to support the nation for the year 2012.

An estimated amount of 100 billion USD budget would make a great impact on how we could visualize the current economy of the country. If we try to convert the prospected budget, it would make up to more than 100 trillion Iraqi Dinars – a good sign of foreign exchange for modern Dinar investors. The only problem the country might expect is the US withdrawal because of the charges against the country’s Deputy President al-Hashemi’s involvement in terrorism. Although, the charges were denied by Tareq al-Hashemi, these allegations might affect the country’s current economic status.

An Increase of more than 3%

2011 was filled with speculations about the negative effects of redenomination to the increasing numbers of Dinar investors. Last year, news about the ‘deleting of zeroes’ was hitting the consciousness of Dinar holders. It raised hot questions that were even fueled when the Governor of CBI released prospected years if ever there would be a plan of replacing the currency.

As of this year, the tide tends to turn from ‘redenomination’ to the raising of Iraqi Dinar price as the economy of the country tries to compete with the world market. 2012 seems to be unpredictable for both foreign and local investors. Recently, Central Bank of Iraq increased the Iraqi Dinar price against the US dollar by approximately 3.4%. It was even noted that the decision was greatly influenced by the auction participated by more than 20 banks of the country. We can assess, based on the increase of price, that one US dollar will make up to 1166 dinars.

The unprecedented decision by the Central Bank of Iraq might affect the exchange rate of Dinar against the USD. In short, this might be a great start for the Iraqi market. But, will it also be pleasurable for some Dinar investors? Did the CBI make the right decision? Or is this another miscalculation that might lengthen the anticipated revaluation?

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Calling the Iraqi Dinar a scam is like Iran loyalists calling the USA currency a scam. You must filter your scepticism through a brain cell if you are going to refer to a countries currency as a scam in and of itself.

Yes it is true that violence prone Iraq, now independent from US coalition forces; Iraq has their work cut out for them no doubt. This reality does not for a second mean that authentic Iraqi banknotes are a scam.

Properly gauging the situation would refer to Iraq investing as a high risk investment with the potential for high return on investment. Merely calling the currency a scam sounds like the type of financial advice one would get out of a broke person.

However, there are several real scams that are associated with the sale of Iraq dinar currency or Iraq based investments.

Counterfeit currency is a real potential dinar scam, always be careful to make sure your dinars are certified authentic and that any other type of Dinar investing such as dinar accounts, bonds, stock, or any Iraq based investment is legal and not criminal in any way.

Be weary of web sites and articles that spout ‘Get Rich Quick With Dinar’ and neglect to inform you of the risk potential involved. There is an excellent chance that such web sites or articles are geared towards some form of short term profit to either sell you dinar no matter what.

Some Dinar cheerleaders just want you to join by artificially jacking your expectations beyond what the Dinar could ever deliver on just so such site could profit from advertising revenues in the highly profitable Dinar Google ads which pay $1 to $2 per click.

Having a diversified list of sources for your Iraq money information is just as important as having a diversified approach to your over all investment portfolio. Don’t put all your eggs in one basket. Take your research to a trusted certified financial advisor, and only invest what you can afford to loose.

Yes the Iraq Dinar has been endorced through the years by the likes of Jim Cramer from Mad Money and Mr Donald Trump but it does not mean that you should sell your mothers house with your mother in it to get more of it, that would be like selling the farm.

All this being said, enjoy the opportunity and find ways to enjoy the wait. Plenty of dinar investors enjoy starting rumours which drive other investors crazy. The last 9 years has aloud a well refined group of Dinar information web sites to come out the wood work.

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Written for http://DrDinar.com
This article may be reprinted online or
offline as long as this box remains and
is hyperlinked online.
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Around 66 oil reserves have been discovered in Iraq, while most of it still remains unexplored. It is suspected that more discoveries of oil fields will be made in the years to come. However, with the resources lying at its feet, Iraq is unable to utilize it to its maximum potential. The global oil industry is not really pleased with Iraq’s endowment. Constant strife, lifelong war has left Iraq crippled with none of its industries flourishing. The evolution of Iraq in all sectors has been hampered due to many decades of violence and the scars are still visible.

The peak oil production by Iraq was 3.9 million barrels per day in the year 1979, till date ie. Sept. 2011. Production from Iran suffered in the 1980’s due to war and deteriorated in 1990’s by the sanctions imposed on Iraq due to its Kuwait invasion. Iraq was permitted to enter the market towards the end of 1996 with certain limitations by the UN agreement. It further suffered in 2002 by restrictions imposed on its sales. The oil production in Iraq in the year 2010 was ranked below 2.36 million barrel per day.

Iraq signed contracts with international companies to develop its oil fields and realize their full potential. This measure was vehemently opposed by many Iraqis who wanted the oil reserves to remain in national hands. The oil production however, still remains below average.

Iraq has had to import oil and gas in a large capacity as its oil refineries performed only 50 to 60 percent of their full capacity. Iraq has spent millions on plans to develop its existing refineries and make further advancements where required. These plans however only exist on paper. Iraq has instead attracted foreign companies that are not willing to deal on fair terms. It can be estimated that this scenario will remain the same in the near future.

A large part of Iraq’s oil is wasted due to flaring. Iraq’s ambition to produce up to 12.5 million barrel per day by the year 2017 is opposed by many veterans of the oil industry. They fear that the world oil demand would not increase enough to allow for consumption of oil from Iraq as well as the increased production from other countries. In such a scenario oil prices would be volatile and affected negatively. Iraq might end up spending millions of dollars on enhancing its oil resources that it may be unable to use. To avoid conflict with other oil producing nations Iraq may have to hold back as none of the nations want to destroy prices on oil. Taking Iraq’s development projects into consideration, future oil price may definitely suffer.

Although the plans to develop oil fields are on, Iraq lacks a well developed infrastructure for increased exports.

Kyles Humphreys is an experienced journalist in oil related fields, who frequently writes articles related to oil prices & indexes and crude oil including tips on investment in oil. Please visit oil.com for more details.

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