Iraqi Dinar Discussion Board

[Aerospace]

Monetary and exchange rate policies
http://www.imf.org/external/pubs/ft/scr/2008/cr0817.pdf

19. The key objectives of monetary and exchange rate policies in Iraq are to reduce inflation and counter dollarization in order to enhance the central bank’s control over monetary conditions. The appreciation of the exchange rate has succeeded in increasing the demand for dinars and contributed significantly to the drop in inflation. The CBI will continue to gradually appreciate the exchange rate until annual core inflation (excluding fuel and transportation) has come down to near single-digit levels, from 16 percent in October.
We will continue to keep a close watch on the effects of this policy on inflation and adjust the pace of appreciation as needed. Once our inflation target has been achieved, the CBI will return to its previous policy of maintaining a stable exchange rate as the nominal anchor for the economy. The CBI will continue to provide the full amount of foreign currency
demanded at the cut-off rate on the daily auctions.

So... stated goals are to counter dollarization. Which blows away the theory of them buying back all the dinar. That would be a total 180 from stated goals.
And... They will continue to GRADUALLY appreciate the rate until they get to single digit inflation and then return to a stable rate.
That is exactly what we have seen. As inflation has dropped, the exchange rate movement has dried up.