Re-basing the Iraqi Dinar

The Central Bank of Iraq is planning to rebase the Iraqi dinar but hasn’t decided yet on the timing of the move, the bank said in a statement last week.  Affirms its commitment to its strategic projects, particularly knocking three zeroes from the Iraqi dinar,” the statement said.

“Despite the technical and logistical preparations for the project we have yet to decide on suitable timing to implement the project,” it said. Choosing a suitable time wouldn’t be linked to economic aspects only, but rather to the security situation as well, it added.

“Most commercial Insurance Policies for Iraqi risks have monetary amounts in US dollars” comments Rob Edwards, Chief Operating Officer of AAIB Insurance Brokers.  “And this goes for sums insured, indemnity limits, deductibles and premiums, so there will be little effect for the majority of policies.”

If the rebase decision is taken it means a current 25,000 Iraqi dinar banknote will become IQD25, and a dollar will equal only 1.17 dinars.

Mr. Edwards continued, “Some policies written outside Iraq and the Kurdish Region of Iraq are for more modest sums insured, in particular auto exposures and these typically use Iraqi Dinar (ID) limits.  Underwriters and their reinsurers should keep a watching brief on this if they have policies with ID sums insured.”

Currency rebasing is usually monetarily neutral and is introduced to make commercial calculations easier and cheaper. Turkey, for example, knocked six zeroes off its lira currency in 2005. Russia did the same for its currency.

[Source: Zawya.  Full article here  http://www.zawya.com/Story.cfm/sidZW20100315000097/iq/?pass=1]

11 Responses to Re-basing the Iraqi Dinar

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  4. Orly March 28, 2010 at 9:48 pm #

    If they re-base , why would the world bank and IMF give then loans? knowing that they can loose money by doing that action?

  5. […] that it will change its tariffs and billing from dollars to dinars. And as AAIB’s Rob Edwards reports, his company will write insurance policies in either […]

  6. […] that it will change its tariffs and billing from dollars to dinars. And as AAIB’s Rob Edwards reports, his company will write insurance policies in either […]

  7. […] that it will change its tariffs and billing from dollars to dinars. And as AAIB’s Rob Edwards reports, his company will write insurance policies in either […]

  8. ben stolen April 6, 2010 at 9:19 pm #

    Why does Iraq sell so many dinars everyday with people actually buying them and the value is so low? Well the answer is to make the world pay for the war they lost because of Saddam. The only logical explanation to make money on your own currency is to rebase it and screw the world.! Now who gets to laugh last? Iraq will be the only one to profit once those in government do the unthinkable, and REBASE their currency! So keep up the good work!!!!!!!!!!

  9. Manda Krzyzanowski April 22, 2010 at 8:29 am #

    Great post, thanks a lot!

  10. Commercial Insurance | Mozilist April 27, 2010 at 8:54 am #

    […] Re-basing the Iraqi Dinar | Iraq Business News […]

  11. Minerva Guterrez August 30, 2011 at 10:29 pm #

    yes!!! YUI!!!

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