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Stephanie Starr
@StephanieStarrC
Now watch the CBI.
Redenomination restructures the currency.
Revaluation changes its value.
The question is whether Iraq intends to do BOTH.
Redenomination: simplifies the currency, reduces oversized denominations and can pull massive amounts of hoarded cash back into the regulated banking system.
Revaluation: changes the actual external value/exchange rate of the currency.
And according to the reporting, one purpose of replacing the existing notes would be to force hoarded dinars into the banking system and potentially remove trillions of dinars that are never legitimately exchanged from circulation. An Iraqi economist discussing the proposal today described it as a mechanism that could isolate illicit cash and strengthen formal banking controls.
That is a BIG piece of monetary reform.
Think about the progression:
Banking reform
➡️ AML & compliance reform
➡️ International banking integration
➡️ Bringing hoarded currency into the banking system
➡️ Reducing excess physical currency
➡️ Redenomination / deleting the zeros
➡️ Exchange-rate adjustment / potential revaluation
The final piece is still the most important: the Central Bank of Iraq must officially announce the implementation details and exchange-rate policy.
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Source(s):
• https://x.com/StephanieStarrC/status/2089363588343329000
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