First Let me clear this that I am not an investor of Iraqi dinar nor a dinar seller or pusher that often encourages you to buy Iraqi dinar to get rich soon. I am an economist and people often ask me about future of Iraqi dinar, whether they need to invest in or it’s just another scam? Will Iraqi dinar ever revalue so that we could plan about this? To find out answers of these questions I made a detailed search and find out following points that may help you while taking final decision.
Economy of Iraq
A strong economy is required to take such big decisions in the world like revaluation. The weaker economy will have the weaker currency; therefore let’s have a look on the economy of Iraq. Following economic report of the CBI shows the real picture for the Iraq economy.
If you look at the economy of Iraq for last five years, you will see a positive growth in the economy of Iraq. According to World Bank and IMF, The Economic Growth of Iraq is better than the other countries in the region. It is a surprising fact that despite massive political unrest and poor law and order situation, the overall growth rate of Iraq is better than the giant Saudi Arabia. The recent growth rate of Iraq is 10.292% as compare to 1.38 % growth in 2008. The World bank included Iraq in the list of fastest growing economies of the world in its recent reports all of these figure shows that Iraqi dinar will automatically regain its value back in the market by the strong economy in the near future, even if the revaluation does not occur.
People often want to know that how Kuwaiti dinar regained its value back in the international market in a shorter period of time and Iraq dinar with the country having second largest oil reserves in the world taking as much time to regain its currency value back in the market? People need to know that the currency of Kuwait was backed by gold and silver, therefore it took not a very big time to regain its value back in the market. Contrary to this, the currency of Iraq was backed by oil reserves. I know that crude oil is also known as black gold and the currency backed by oil is also keeping a significant value in the market. But Iraq remained under war for last 10 years and it had to face sanctions for export of crude oil in the international market. That’s why the value of oil reserve decreased to the zero. Looking the importance of gold and silver, central bank of Iraq is purchasing gold from international market. Gold reserve is the key to enhance the value of Iraqi dinar and considered as one of the strongest currency of the world. the following chart show the gold reserves of central bank of Iraq in the last 3 years.
This continuous increase in the value of gold reserve is the preparations for revaluation of currency or to make it stronger. So investment in the strong currencies cannot be a bad decision.
Oil Export of Iraq
Iraq has second largest oil reserves of the world with the capacity to export 25 million barrels per day by 20130, according to World Bank. Oil is the backbone of Iraq economy and higher volume of oil export will strengthen the economy of Iraq. The economists believe that if Iraq could achieve 7.6 million barrels oil export target by the end of 2016, there will be no need for revaluation. Iraqi dinar will regain its value back in the international market in the organic way. Keeping this oil target in the mind, Iraq designed five years economic policy and struggled hard to enhance its export of oil in the international market. the chart below shows that Iraq is going towards its target quite efficiently. One year ago the total oil export of Iraq was only 2.3 million barrels per day that is 3.25 million barrels per day in 2014. We hope the target is no so far for Iraq.
Membership of Council of 17
The Council of 17 membership is one of the biggest move towards the development of Iraq economy. Now Iraq is allowed to trade with the biggest market of the world. Council of 17 signed a paper in the favor of Iraq and allowed its access to the European markets. After this membership, I think the discussion over revaluation will be closed as it is not needed now after this membership. The economy of Iraq will be boost up in a very shorter period of time. The oil targets will be achieved before 2017 with this access.
Iraq is struggling hard for the membership of WTO for a longer period of time. There are two thing that Iraq needs to get membership of WTO: one is the vote and second is the value of its currency. Iraq needs enough members that could vote in the favor of Iraq in the WTO meeting. To get the favor of the voters in the WTO, Iraq has started visiting its friend’s countries to convey them for the vote in its favor. For the second option, Iraq is enhancing banking activities and direct foreign investment, enhancing the gold reserves etc. furthermore the frozen assets of Iraq has also been released in its favor that will empower its balance sheet and will be used to fill budgetary gap. But one thing that is so interesting for the membership of WTO is the time period. Iraq will have to enhance the value of currency in very short period of time that is only possible via revaluation of Iraqi dinar. Therefore some people looking this situation often talk about revaluation of Iraqi dinar. It may possible that revaluation happen in next few weeks as some experts believe. The facts and figures discussed above may change your mind if you were in the list of those people who considered dinar investment as a scam. The investment in Iraqi dinar is not a scam but it will also not revalue as some believe. It will take some time, but not as much as opponent think about it.