DrDinar Blog

CBI To Fix Iraqi Dinar Exchange Rate In Ramadan

Since Iraq is a Muslim country with more than 70% of the population observing the Islam belief, there is no doubt that the country will observe the holy month of Ramadan. However, how can this holy month affect the fluctuating exchange rate of the Iraqi Dinar? Does religion have to do with the Central Bank of Iraq?

Ramadan or commonly known as the month of fasting for the Muslims comes from the Arabic root “ramida” which means dryness or heat. During this month, Islam believers who are 7 years old and above are expected to refrain from eating, drinking, vices and sexual relations from dawn until sunset (most probably from 4AM to 6PM). In short, there is a great chance that the exchange rate of the Iraqi Dinar against the US dollar will likely stabilize because food prices and other commodities will go lower in prices compared to the previous months.

This can even be stressed when Al Sabah news in Baghdad released a statement that, “The central bank exchange rate of the dinar against the dollar will stabilize during the holy month of Ramadan because of the tendencies of food prices in the world to lower, not higher.”

Even the Deputy Governor of the Central Bank of Iraq, in the person of Mohammed Saleh, said last June 30, 2012, “The central bank monitors the rate policies foreign exchange to local currency, which indicates that the exchange rate of foreign currency before the local will stabilize in the month of Ramadan, because the food in all countries in science refers to the decline in prices. He added that »the month of Ramadan in the summer differs from winter to the availability of agricultural products and fruit in Iraq, leading to a lack of high food prices substantially.”

Mohammed Saleh then asked the Finance Committee in the House of Representative in Iraq to lower the Iraqi Dinar exchange rate against the US dollar. This was asked with the intention to reduce the rising prices of goods and other commodities in the holy month of Ramadan.

Moreover, on the same day of June 30, 2012 in Baghdad news JD, Cameron Kerry, (the US Department of Commerce Chairman of the US of the Committee on Business Dialogue in Iraq) said, “His government’s desire to start a new page of economic relations through increased trade to the level required and seek to attract investors to Iraq, the cooperation of the private sector for both the two countries to reach a positive outcome of the dialogue.”

What was Cameron trying to tell? He was telling that the U.S. Commerce seeks to bring private investors to Iraq – a great solution that might contribute to the promoting of foreign relations and the country’s eager registration to the World Trade Organization. However, there was still a little concern from the Minister of Commerce, Khairallah Hassan Babiker with regards to Kerry’s statement.
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Babiker said, “Iraq has a lot of opportunities that can be exploited by U.S. companies to support the Iraq reconstruction effort and to encourage the private sector to contribute to the development of trade and economic cooperation to be considered the main player and the main engine for the development of trade between the two countries.”

Iraqi government and even some other foreign countries are joining hands to help the once great Babylon to recover. Indeed, CBI gives respect to the Islam faith and the people who might have been observing the month of fasting. Maybe, this could also help assess the Iraqis that in the midst of fluctuation and unstable economic condition, they still have the courage to proclaim to the world that they are still a nation that respects Allah as much as they could implicit.

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CBI To Import Counterfeit Iraqi Dinar Detectors As 2013 Approaches​

Tide seems to turn on the issue on how Iraq relentlessly exerts tremendous effort to strengthen its currency and release its new notes thus, the country is taking precautionary measures to check for counterfeit money which keeps the exchange rate strong by the way. So, how will they do this?

Baghdad revealed last June 26, 2012 that the Central Bank of Iraq is intending to buy necessary equipment (electronic devices) to detect the original notes from the fake ones. This is really a serious issue as year 2013 is approaching. This was even stressed by the Deputy Governor of CBI, Mohammed Saleh, when he said that the CBI will be importing advanced counterfeit money detectors. These electronic devices are expected to be linked on the web to produce updated information and help traders to get the latest and updated methods to detect fake ones.

It was even noted by Saleh that the intended electronic devices will work and shall be circulated after the distribution of the new notes which will be expected by the start of 2013. This will definitely enhance the integrity of the new notes when the time comes for its release to the public.

It seems that Iraq has learned its lesson from the fraud that it had experienced during the existence of mafia fraud in the Iraqi invasion of Kuwait last 1990. The mafia fraud was one of the reasons Iraq was not able to lay hold of its currency’s integrity. As a matter of fact, the fraud even lasted for more than 10 years (from 1990 to 2003). Iraq seems to be telling the world that this illicit movement by some unpleasant individuals needs to be abolished and reprimanded rather than living in fear of fraud.

Will this significantly reduce the existence of counterfeit money or will this restrict some speculators and traders to trade freely on the free market? Well, whatever the outcome, everybody knows that the country is doing its best to obtain stability on its currency. There was already an announced contract by the Central Bank of Iraq. The contract involves the reduction of a coin-friendly environment.

Mohammed Saleh said, “The Iraqi government contracted to purchase equipment for the destruction of eco-friendly currencies according to the latest global technologies. The new devices will be distributed to banks and will be erected in places under the ground, indicating that new hardware will work to transform the categories of paper to be destroyed to ashes, and without issuing any heat or waste gas.”

However, if these detectors play a crucial role in maintaining the integrity of the new notes, why wait for 2013 and why not come out now? Well, the implementation of the said counterfeit money detectors is still subject to the final decision of all the members of the Commission to further regulate the contract thus, the involved documents for the approval of these electronic devices shall wait for the members’ approval. It was also noted that the Finance Committee has directed the Central Bank of Iraq to reduce the dollar exchange rates and stabilize the Iraqi dinar as Ramadan approaches. Furthermore, Iraq also has planned to add 36 security features on the new notes to eradicate forgery. Jubouri told the press last July 5, 2012, “There are a lot of specifications will have to (thirty-six) ensure that Amaknyh feature forged, while the currency in which the current (8) features.”

So, what could be the composition of the new currency that it might distinguish itself from the fake ones? Finance Committee MP, Najiba Najib, has her answer to this when she told the Baghdad Agency News last June 27, 2012, “The currency will be Viah paper and other metal will be released in early 2013, but it needs to be taken by the Central Bank reserves and the measures necessary to detect cases of fraud and forgery, which was repeated in the current currency by their weak souls.”

Therefore, it is obvious that Iraqi Government really planned these counterfeit detectors to be specialized only for the new notes which will come out by January of 2013. Such preparation brings us the idea that Iraq learned its lesson from the previous fraud it had experienced.

Although the financial institutions of Iraq have not yet released the appropriate methods on how to detect the original ones from the fakes, Iraqi financial experts believed that this will raise confidence in the currency, as well as reducing the possibility of unnecessary inflation caused by bogus banknotes.

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Whether you see the dinar as a good investment depends on how you perceive the opportunity filtered through your own beliefs, values, and rules on what a good investment should be. If you will postpone any pessimism on the dinar for a moment and allow me to make a point – Why is the pit bull a good dog? This depends who you are asking. Imagine a loving pit bull and it’s loyal owner on a quiet evening at home moments before a home invasion, talk about having a dog in the fight! Dinar on the other hand is best held by owners who tolerate the thrill of the gain combined with a stigma that dinar is not considered a safe investment.

I just read a goofy article headline that read “Is Dinar a scam or a safe investment?”, the dinar is neither one or the other! A countries currency can be risky due to post war politics but since when is a legal currency considered a scam? Producing counterfeit Iraqi Dinar banknotes in America is a felony, it’s a major crime. Iraqi Dinar is a legal currency governed by all laws pertaining to the possession of a world currency. Forget to declare over $10,000US worth of Iraqi Dinar banknotes to US customs while entering the USA and you will be treated and prosecuted as a criminal.

Bottom line, any countries currency is not a scam, it’s a real currency even if it’s a ‘restricted currency’ regarding it’s trade at world banks. The method by which the currency is acquired can be a scam such as false or misleading advertising, mail order fraud, proceeds of crime, counterfeit, but real dinar scams are a whole other article for another blog post.

Safe investments as a rule, don’t normally yield high returns on investment. Many dinar owners would not have been attracted to the dinar in the first place had the dinar been truly a safe and secure investment. Selling dinar in 2004 was done by relating military fire power to the oil rich banknotes, investors were attracted to the risk. Many early investors have already doubled their money as a reward for having a high risk tolerance at that time of war.

Do you believe Iraq will experience a revaluation that will help the value of the dinar despite any cosmetic changes that occur to their banknotes?

Do you value risk even though the Iraqi dinar is not considered as risky as it once was over 8 years ago?

Do you have a personal rule that a strong return on investment must be coupled with a safe secure investment? Not a good rule.

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A New Currency For Iraq In Review

There have been a lot of questions raised when CBI announced last June 2012 that they are to circulate new currency for Iraq. What will happen to our Iraqi Dinar notes? It seems that Iraq will not be the only one to face a great challenge, but also the people who have involved in the currency. However, time will come that all the important details that we need to know and understand will be revealed.

When will the new currency be put in circulation?

Central Bank of Iraq had just forwarded the date for the circulation of the new notes last July 4, 2012. They said that most likely, the new currency will begin to circulate by January 1, 2013. This will be effective after lopping off the zeros. According to CBI Governor, Sinan Shabibi, “There are many procedures and many misgivings Bank is keen to implement them in order to be the process of replacing the currency safe and easy..” So, this could mean that Iraq and the rest of the world shall welcome a new currency just when New Year knocks on their doors.

What are the categories to be expected from the new notes?

It is wise to know the categories of the new currency. As a matter of fact, it is a necessity otherwise; one could just go lose on his or her investment.

Straight from Finance Committee member Najiba Najib, noted from “Integrity of Electronic” Today Iraq last July 3, 2012, “The deletion of zeros will be for two years and that the government banks will be a place to change and take the old currency and replace currency El Jadida and will have several advantages which will be a coin a large Iraqi equivalent of $ 180 As for the new currency with a category about 50 dinars and 100 dinars and 200 dinars and 250 dinars, and in addition to the new currency will be issued in accordance with the Constitution of the Arab-Kurdish language in English and there will be symbols reflect the civilization of Mesopotamia from Zakho to Basra, Iraqis are proud of them.”

It was also noted by Finance Committee of the Liberal bloc MP Magda El-Tamimi, that “For smaller groups, it will issue class (25, 50.100) Fils as well (250, 500, ½, 1, 2) JD.”

Having 50 fils and 250 fils is not bad after all, isn’t it? This could mean a faster transaction with lesser cash involved. However, there is one dilemma for some investors and people who got involved in Iraqi Dinar.

Where to exchange the old Iraqi Dinar?

Although CBI has not yet released the final statement as to where exactly can we exchange our old dinar, we can still base the situation from the last redenomination that happened from October to January 2004. During this period, people were able to exchange their old notes from Iraqi banks and other official locations such as post offices situated throughout Iraq. There were no fees charged.

During those times (which we could hope that it would be the same this coming year), people who got bank accounts would see their current balances being converted automatically. Salaries were even pain in the new dinar in the earliest possible time. There were also some dinar traders who offer this type of service but, with certain transaction fee. However, whether the processes for exchanging our old notes to new ones will change or not, we can still have control over our money as long as we keep ourselves updated. Besides, CBI won’t risk going lose on proclaiming things that might hurt their people and foreign investors, will they?

What about exchanging your dinars outside of Iraq? It has been anonymously confirmed that some of the larger more reputable Dinar dealers will be doing these exchanges in America and other common wealth countries for a small fee. Assuming that the exchange is of no cost on the streets of Iraq, you can ethically expect a small fee which should be taken into consideration when calculating your return on investment in the future. It could be a small price to pay to stay in the game.

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