Replies to post #10756 on Iraqi Dinar Discussion Board (IQD)

[Aerospace]

Currency auctions are a way for the central bank to intervene in the exchange rate.
Iraq’s central bank is buying much more of their currency than they are selling, so that puts pressure on the currency to appreciate.
Vietnam’s central bank is intervening by doing the exact opposite. They are selling much more of their currency then they are purchasing, causing the currency to depreciate.

Currency is basically supply and demand.
The economy does play a part. It is the "demand" side of the equation.
The supply side of the equation is the money supply. Vietnam, last I checked had 810 trillion dong in supply. With an exchange rate over 16000 to 1, that means Vietnam has about $50 billion worth of currency floating around to service a $260 billion economy.

Iraq has 21 trillion in supply at 1230 exchange, so $17 billion worth of currency for a $80 billion economy.
But remember, most of Iraq’s economy right now is oil sales, dollar denominated.
They really need to grow the rest of the economy to drive up the demand side of their equation.