Marrakech II
16-12-2005, 04:40
With the new government hopefully taking the reigns of power in Iraq soon. There is a new push on Iraqi Dinar speculation. I have copied an article over from 2004. It still is valid today as it was then. So what do you think of this type of speculation? I had purchased $750(1 mill) worth of dinars awhile back. It is something I can afford to lose without a problem btw.
Exchange rates
Smuggling, hoarding send dinar on rollercoaster
By Ali B. Al-Shouk - 19-Jan-2004
BAGHDAD - Smuggling, hoarding and currency speculation sent the Dinar on a rollercoaster ride this week, pushing the value of the new currency up to almost ID 900 to the Dollar. On the day that the old notes bearing Saddam’s picture were phased out, the new currency saw some of the same market manipulation the older currency faced, prompting some economists to ring alarms that the beleaguered currency may be set for a more serious downfall.
”Large amounts of the new Iraqi Dinar have been smuggled out of Iraq to neighboring countries like Kuwait and Syria and Jordan, and the demand for the dinar is now much higher,” said Ali Fahmy, a trader in Kiffah market, as he watched the Dinar rise ever higher in value.
”There are now traders supplying dinars to speculators in other countries. For example, if I have $1000 and change it to 1.5 million ID, and then smuggle the money outside Iraq, after a while the Iraqi dinar may become so strong against dollar that I would then have a fortune. ”
The smugglers have taken to concealing the new Dinar in unlikely ways, traders say. Some have stuffed the new bills into car spare tires, or stashed banknotes in hidden tanks within trucks crossing the border. ”They come to us and want the dinar in high denominations like the 25,000 or 10,000 note. That’s because it’s easy to carry large amounts of the dinar and hide it in hidden places in bags or suits,” says Naji Tawfiq, a trader in Harthya.
Even Iraqis seem to be stashing away dinars in the hope that the exchange rate will return to its 1980’s high of $3.3 for per dinar. ”They are waiting till their ID1.5 million becomes $5 million. It’s a big gamble but they hope that their few million Dinars will one day be worth millions of dollars instead,” explains Ali Fahmy.
”If the smuggling continues, then we will face a real problem, as there is not enough currency for us, the Iraqis, to deal with in the markets. This may force the Central Bank to print more dinars with the effect that the value will fall,” suggests Hisham Al-Dagestani, a banking expert. ”We should punish anyone exporting dinars, and close the borders to stop it from happening.” But Central Bank officials put a different spin on the wide fluctuations. The huge fluctuations reflect rising confidence in Iraq and in it’s currency, they insist. Sabah Noori, manager at the Minister of Finance’s office, predicts global interest in the new Iraqi dinar to increase even further. ”When I was in Kuwait, I saw notes and signs in the streets about the Iraqi dinar’s value. People trust the new currency as it can’t be faked, because they believe that the Iraqi dinar is supported by the Americans. I heard people saying that they should buy large amounts of the new dinar to gain benefit in the future.”
”There are high hopes for the Iraqi economy,” says Iraqi Central Bank governor Dr. Sinan Al-Shibiby. ”It’s now a trustworthy currency, but the rise in value is not justified because it’s too big a jump, while you really want something smooth. People now want to have the dinar because it will be strong in the future.”
Well a crazy idea?
Exchange rates
Smuggling, hoarding send dinar on rollercoaster
By Ali B. Al-Shouk - 19-Jan-2004
BAGHDAD - Smuggling, hoarding and currency speculation sent the Dinar on a rollercoaster ride this week, pushing the value of the new currency up to almost ID 900 to the Dollar. On the day that the old notes bearing Saddam’s picture were phased out, the new currency saw some of the same market manipulation the older currency faced, prompting some economists to ring alarms that the beleaguered currency may be set for a more serious downfall.
”Large amounts of the new Iraqi Dinar have been smuggled out of Iraq to neighboring countries like Kuwait and Syria and Jordan, and the demand for the dinar is now much higher,” said Ali Fahmy, a trader in Kiffah market, as he watched the Dinar rise ever higher in value.
”There are now traders supplying dinars to speculators in other countries. For example, if I have $1000 and change it to 1.5 million ID, and then smuggle the money outside Iraq, after a while the Iraqi dinar may become so strong against dollar that I would then have a fortune. ”
The smugglers have taken to concealing the new Dinar in unlikely ways, traders say. Some have stuffed the new bills into car spare tires, or stashed banknotes in hidden tanks within trucks crossing the border. ”They come to us and want the dinar in high denominations like the 25,000 or 10,000 note. That’s because it’s easy to carry large amounts of the dinar and hide it in hidden places in bags or suits,” says Naji Tawfiq, a trader in Harthya.
Even Iraqis seem to be stashing away dinars in the hope that the exchange rate will return to its 1980’s high of $3.3 for per dinar. ”They are waiting till their ID1.5 million becomes $5 million. It’s a big gamble but they hope that their few million Dinars will one day be worth millions of dollars instead,” explains Ali Fahmy.
”If the smuggling continues, then we will face a real problem, as there is not enough currency for us, the Iraqis, to deal with in the markets. This may force the Central Bank to print more dinars with the effect that the value will fall,” suggests Hisham Al-Dagestani, a banking expert. ”We should punish anyone exporting dinars, and close the borders to stop it from happening.” But Central Bank officials put a different spin on the wide fluctuations. The huge fluctuations reflect rising confidence in Iraq and in it’s currency, they insist. Sabah Noori, manager at the Minister of Finance’s office, predicts global interest in the new Iraqi dinar to increase even further. ”When I was in Kuwait, I saw notes and signs in the streets about the Iraqi dinar’s value. People trust the new currency as it can’t be faked, because they believe that the Iraqi dinar is supported by the Americans. I heard people saying that they should buy large amounts of the new dinar to gain benefit in the future.”
”There are high hopes for the Iraqi economy,” says Iraqi Central Bank governor Dr. Sinan Al-Shibiby. ”It’s now a trustworthy currency, but the rise in value is not justified because it’s too big a jump, while you really want something smooth. People now want to have the dinar because it will be strong in the future.”
Well a crazy idea?