*** No plans to make ID1000 = $1 – CBI (lifting 3 zeros)

March 3, 2010 - 05:01:06

BAGHDAD / Aswat al-Iraq

There are no plans to make the exchange rate of ID1,000 equal to $1, Central Bank of Iraq (CBI) said on Wednesday.

“Iraq’s currency policies are far from such decisions,” the CBI said in a release received by Aswat al-Iraq news agency.

The CBI said that the current exchange rate, ID1,170 = $1, is balanced, stable, and can be preserved through Iraq’s foreign currency reservoir of $43 billion.
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The lifting 3 zeros and what it means?

Does it mean lifting zeros from the notes or from the value of the notes?

First, articles have stated that the larger bills (25, 10, 5, 1K) will eventually be taken off the market between now and the end of the year. Smaller bills which are the 1, 5, 10 & 25 along with coins will be issued.

Some articles have stated that 3 zeros be taken off the purchasing power, which is the value of the note. So, 3 zeros off the value of .00089 would be .89.

So, after the RV happens, the smaller notes will be put into circulation and the larger notes will go back to the banks and gradually be taken out of circulation.

Iraqis that are holding larger notes will either deposit their money or exchange for the lower denominations. The larger notes will be kept or destroyed and will no longer be used. For everyone holding larger notes outside of the country, the banks will accept the larger notes for deposit and those notes will eventually be sent back to the CBI. Governments may, possibly, use the larger notes as oil notes/certificates for large transactions. The CBI will continue with their currency auctions where a percentage or amount of dinar will be bought back off the world market which all Central banks around the world do everyday and that way any dinar outside of iraq won't bankrupt the CBI.