Replies to post #13147 on Iraqi Dinar Discussion Board (IQD)

[AUdad]

Aerospace can explain it better then I... He and myself do not agree on 90% of his post but he is highly intelligent and does extensive DD on currencies.

(side note) just dont let him get you down with his gloom and doom theories concerning the Iraqi dinar.. LOL!!

[Aerospace]

When a country “lops” it is always accompanied by an issuance of new currency. As you know… they can’t physically remove the zeros from your bill.
They will issue a new currency and do an exchange… 1000 old for 1 new. Therefore lopping 3 zeros.
If the exchange period is short, everyone would have to exchange pretty quickly at exchange sites… most Iraqi banks would do it I guess. If the exchange period is long, you could probably still use your old currency and shop owners would take it for goods and do the swap themselves. If that’s the case there would be two exchange rates effective in the country. One for the old currency, and one that is probably 1000 times higher for the new currency… if indeed it was 3 zeros lopped.
I don’t know that Iraq will do this, but there has been a lot of talk about it. The Minister of Finance want to do it… but it’s really up to the Central Bank of Iraq.