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    Recognized currency

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    Seck
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    Recognized currency

    Post  Seck on Tue 29 Jan 2013, 17:33

    Currency is an internationally recognized currency it is apart of the flexible exchange rate system and therefore is considered a liability at that point. Value of the currency can fluctuate dramatically however when a country chooses to purchase foreign fiat currencies such as the US dollar to deposit within their reserves it can stabilize the value of their currency by “backing” or “supporting” it’s value The larger a countries reserve deposits grow the stronger the domestic currency becomes. CBI/GOI is using it’s foreign currency reserves to meet the national demands while still working to de-dollarize within it’s borders and strengthen the purchasing power of the IQD. In laymens terms, they are using the USD for imports while forcing the locals to use the IQD. The Iraqi people became largely dependent upon the use of USD to purchase all of their daily needs. It was essential for the CBI to de-dollarize and force the Iraqi people to use the domestic currency in order to reestablish faith and strength for the domestic currency. Once this process is complete the CBI can then move to the next phase of their monetary policies set forth by the IMF within the Framework Agreements.

    sandyf
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    Re: Recognized currency

    Post  sandyf on Tue 29 Jan 2013, 22:40

    Hi to all, saw the message on a random visit to PTR.

    There is a lot of confusion over the terms 'recognised', 'International' and 'tradeable' in terms of currency. A lot revolves around the IMF Article 8.
    It is my understanding that when a country accepts the obligations of Art 8, the CB basically agrees to redeem the currency worldwide. It should be borne in mind that Iraq has never been an Art 8 currency.
    Art 14 does not prevent a currency from being traded. When I say traded, I do not mean as a currency pair. Central banks regularly trade currency through the Interbank network on an 'Interest' basis, this is what LIBOR is all about.

    It would be in our interest to see Iraq move to Art 8 but I think it is something that could just come about in the event of any currency reform.

    sandyf
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    Re: Recognized currency

    Post  sandyf on Tue 29 Jan 2013, 22:44

    The Interbank forex markets, as obvious from the term is the highest level in the foreign exchange markets where banks exchange currencies directly with one another. The Interbank forex markets can also be referred to as the forex wholesale market where most of the currency transactions are performed and is mostly used for trading within the banking community. The interbank forex markets is unregulated and decentralized, thus there is no central location or an exchange where these transactions take place, unlike the stock markets where transactions are carried out at the stock exchange.

    Read more http://www.ecnforex.co.uk/interbank-forex-markets-explained/

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    Re: Recognized currency

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      Current date/time is Sat 23 Sep 2017, 10:41