Iraqi Dinar to Devalue?

By John Lee.

One possible consequence of the budgetary crisis facing Iraq is a fall in the value of the Iraqi dinar.

As a result of the massive burden of public sector wages and salaries, in addition to subsidies for food and energy, the country faces major expenses in looking after its nearly 2 million internally displaced persons (IDPs).

It must also find the cash to build up its armed forces to fight the continuing threat from the Islamic State.

The Financial Times reports that economists are concerned about 2015, when Iraq will "almost certainly" run a deficit. Baghdad could borrow against its reserves but at the risk increasing inflation and weakening its currency.

According to Luay Khateeb, founder of the Iraq Energy Institute and a fellow at the Brookings Doha Centre, "the moment they do that the Iraqi dinar will devalue.

(Source: Financial Times)

(Dinar image via Shutterstock)

3 Responses to Iraqi Dinar to Devalue?

  1. Iraq Investor 15th October 2014 at 09:51 #

    OUCH! This has got to hurt the Dinar RV industry, if that scam is still going on.

    What ever happened to 4aprofit and his friends who used to post here? Have they finally abandoned the dream of getting rich from the dinar?

  2. Stew 15th October 2014 at 16:17 #

    You don't yet understand the mentality of dinar investors.
    Good new means Iraq CAN rv the dinar.
    Bad news means Iraq MUST rv the dinar.

  3. Matt 16th October 2014 at 17:15 #

    I work with a Dinar "investor". No matter how bad the outlook is in Iraq, he won't let go of the thought that his "investment" is going to pay off. There's always a "drop-dead" date that he speaks of with a ridiculous value of $3.00+ to the dollar. His personal life is affected negatively on a daily basis because of his relentless talk of these false notions. How do I get him to wake up to reality? This has been going on for over 4 years!