‘Sudden Change’ Is The Keyword of USD/IQD Revaluation (RV) and/or Reinstatement (RI): The Likelihood of RV/RI Rates
By: Maijanfad (6 December 2021), Submitted to Dinar Chronicles
Sudden Change
Referencing to my earlier writing in IDC, Why Iraqi’s Dinar Should be Around the Value of Kuwaiti’s Dinar | Dinar Chronicles, here is the update on Iraqi’s Dinar (IQD) and its nexus with Kuwaiti’s Dinar (KWD) over US Dollar (USD).
First, let us see Figure-1 from which we can see the sudden drop in rate from a constant IQD(0.30-0.35) per USD or USD(3.33-2.86) per IQD to USD(0.0007-0.0008) or IQD(1,200-1,460).
This happened from the year 2000 until today with ‘sudden’ fluctuations in between. In 2001 IQD ‘suddenly’ jumped to 2,325 per USD from 1,167 then ‘suddenly’ dropped to 0.31 in 202 to 2003.
In 2004, ‘suddenly’ IQD leaped to 946.63 and sprang to 1,470 in 2005 and hovered around 1,200-1,460 per USD until December 2021.
As stated in my previous writing that there is no macroeconomics or technical fundamentals that can explain these other than a political decision.
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This too can be seen from the IQD/KWD nexus as seen in Figure-2.
Just like rain, nothing happens all of a sudden and abruptly transpires like IQD and USD phenomenon. It must have preceding events such as polar shift that causes the wind to blow which in the end leads to the rainfall.
Data source: https://fxtop.com/en/historical-exchange-rates.php?MA=0&TR=1. Processed
Figure-1: USD/IQD Historical Exchange Rate (1960-2021)
Missing Year Reconciliation – RV/RI Rates
Let’s now reconcile the missing year rates of 20 years. The estimation process is given in Table-1 and both Revaluation (RV) and Reinstation (RI) rates are provided in Table-2.
Table-1: Missing Year’s Reconciliation
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Data source: https://fxtop.com/en/historical-exchange-rates.php?MA=0&TR=1. Processed
Table-2: Estimating Missing Year’s RV and RI Rates
Data source: https://fxtop.com/en/historical-exchange-rates.php?MA=0&TR=1. Processed
From Table-2, we can anticipate the RI/RV rate is between USD 3.07-43.60. My guesstimate (remember the sudden changes and no underlaying fundamentals), the rates would be between USD 3-14 per IQD.
Let’s hope the ‘sudden change’ again happens suddenly.
Data source: https://fxtop.com/en/historical-exchange-rates.php?MA=0&TR=1. Processed
Figure-2: USD-IQD-KWD Nexus and Sudden Changes (1960-2021)
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