New Iraqi Dinar: Two-Year Review
With any investment, it is important to periodically review performance. This provides a basis for assessing whether the investment is as worthwhile as originally perceived and, also, for making “buy, hold, sell” decisions. Iraqi dinar is unique in that it is not an investment security or currency with a price determined through organized trading. Buying and holding dinar is easy (though dealer pricing varies widely), but selling (for individuals, at least) is presently done through mechanisms like e-Bay rather than a developed exchange market.
Nonetheless, there is exchange rate pricing data available which provides some guidance as to how well the dinar is doing. It also provides rough indication for assessing investment performance if the new Iraqi dinar was traded and exchanged actively.
The following chart was prepared using the average Interbank “ask” price as reported by Oanda.com. The “ask” price is the price at which sellers are willing to sell a currency. The “bid” price is the price at which buyers want to buy a currency. The ask price is always higher than the bid.
According to this data:
- the 6/30/06 price ($1540.70) is 5.52% higher than the price on 7/1/04 ($1460.00). This represents a 2.8% annual rate of gain if the dinar could have been freely exchanged in a market environment at these rates.
- As comparison, the S&P 500 stock index increased from 1128.94 to 1270.20 (12.5%) for the same period.
- the average “ask” price over this 730-day period was 1493.06925
- the highest “bid” price during this same period was1473.8000
- the lowest “bid” price during this same period was1384.7000
Of course, most people who buy Iraqi dinar realize it is long-term (5+ years) prospect. Still, a two-year review provides useful information for buyers (and prospective buyers) to consider.
Technorati Tags: Iraqi dinar, e-Bay, exchange rate, investment performance, Interbank
