Will the Iraqi Dinar go up soon?

The answer to this question is not as easy as yes or no, since there are so many things influencing the value of the Iraqi dinar. (Among these are violence, inflation, and reconstruction to name just a few.)
However, there are some positive signs in Iraq that suggest that the country as a whole is stabilizing, which should help to push the Iraqi dinar higher.

Iraq’s economy is tightly interwoven with Iraq’s oil supplies, so as oil prices stabilize it also has a positive impact on Iraq’s economy and its money supply.

The Iraqi government is also working with the International Monetary Fund and the United Nations on ways to support their efforts in economic reform, reconstruction, investment and higher educational areas. These efforts will also support guaranteed water resources, removing the existing landmines, and developing agriculture to help the Iraqi people become self-sufficient. Both the United Nations and the U.S. government are well aware that greater security in the region will only come with greater economic improvements.

To that end, the U.S. military will no longer use United States dollars to pay for anything in Iraq or Afghanistan. In an about-face in the way business has been conducted, they are attempting to keep U.S. money out of the hands of Al-Qaeda and the insurgents, by instead paying out funds via electronic funds transfer in the local currency. This measure is seen as one which will build up trust in the Dinar and the banking systems, which is essential to any increase in the dinar’s value.

Other good news for Iraq has been that the United States, the United Arab Emirates, and Cyprus have all forgiven 100 percent of the Iraqi debt. Iraq’s leadership has also asked China to forgive the $8.5 billion U.S. dollar debt it has with them, highlighting China’s role in Iraq’s reconstruction process. There has been no response from China yet.

What does all of this mean? Experts are saying that the Iraqi dinar should be restored to its past value (which was $.30 pre-war, and also was over $3 U.S. pre-Gulf War, and now is stable at a low 1170 dinar per U.S. dollar) before the end of the year or soon thereafter, due to the already mentioned reasons, and one more important one, below.

The whole Middle Eastern region is discussing publically the unification of all their currencies similar to what we saw with Euro. With this discussion being had by the governments in the region, and the fact that it makes sense for them all to get away from dollar exchange at the same time a collapse is seen as imminent, oil-rich Iraq will definitely be a part of these equations. This has been in the works for quite some time, and is expected to be implemented within the next twelve months, and should have a very profound, exponential effect on the value of the Iraqi dinar.

So, will the Iraqi Dinar go up soon? It appears likely that it will.