LOL… thanks for making me work Tono.
A forward market for Iraqi currency.
Iraq will set up a market that will allow companies, individuals, and I guess other countries to purchase a set amount of dinar sometime in the future (forward) at a set price.
Say a grocery store chain in Turkey makes a deal with a date grower/seller in Iraq to buy 10,000 pounds of dates in July of 2012 for a set amount of dinars. Because they don’t know what the exchange rate might be in July of 2012, Iraq will allow them to enter into a contract right now that states Iraq will sell them a set amount of dinar in July 2012 for a price determined right now. A forward contract.
It just protects businesses and such from exchange rate fluctuations.
Dow Jones Newswire: A current 25,000 Iraqi dinar banknote will become IQD25, and a dollar will equal only 1.17 dinars.
