When Will the Iraqi Dinar Be Revalued?
The revaluation of the Iraqi dinar is ready to be implemented by the country’s Central Bank; however, the Parliamentary Economic and Investment Commission has decided to postpone the revaluation to 2019. The plan is to eliminate zeros from the value of the Iraqi currency, allowing the dinar to gain value on the global market.
With the anticipation of the Iraqi dinar revaluation, millions of dinars have been bought all over the world by investors. Those investors hope that the revaluation of the dinar will increase the value of the currency, which would make all of their dinars worth significantly more than when they bought them. However, the revaluation continues to get postponed and is set for 2019 as the country faces more pressing political issues.
Currency revaluation refers to a calculated upward adjustment to a nation’s exchange rate relative to its chosen baseline. The process is undertaken by nations with fixed exchange rates to deliberately increase the value of its own currency relative to a single currency, a basket of international currencies or whatever the underlying baseline may be.
Currency revaluation only occurs in fixed currencies, meaning the currency is pegged to a foreign currency, a basket of foreign currencies or a different quantitative benchmark. The process may only be undertaken by the underlying nation’s government or policymakers. The act of altering the value of a nation’s currency relative to other currencies is typically influenced by market pressures. The pressure is now.
A government typically revalues its currency when it wishes to increase the value of its currency relative to its benchmark currency. This maneuver would officially increase the purchasing power of the nation’s residents while decreasing the price of imports.
Revaluation is the inverse of devaluation, which is the official lowering of the value of a nation’s currency within a fixed exchange rate. Under this measure, the underlying government establishes a new fixed rate respective to the benchmark.
The International Monetary Fund encourages governments and policymakers to refrain from manipulating exchange rates to gain unfair competitive advantages over foreign currencies.