3 Reasons you Should Consider Investing in Iraqi Currency
If you’re considering an investment in Iraqi currency, it’s important to plan for the long-term. Think of it an “invest and forget” type of strategy. It should be just one aspect of your passive income game plan– because only a small percentage of a diversified portfolio should be dedicated to any single foreign currency.
3 REASONS TO CONSIDER INVESTING IN IRAQI CURRENCY
- Iraqi currency value is at a low-cost price point
- An Iraqi dinar revaluation appears realistic
- The future of Iraq’s currency looks good based on economic advances
If you want to purchase Iraqi dinar currency, now is a good time. There are clear reasons why dinar investment gurus support this investment and believe the IQD to USD exchange rate is favorable for US investors:
1. Iraqi Currency Value Is at a Low-Cost Price Point
A low price point refers to the Iraqi currency to USD exchange rate. Currently, a small amount of United States dollars (USD) will buy a large number of Iraqi dinar (IQD). At the time of this writing, one United States dollar is worth $1, 192.96 IQD.
To stay abreast of Iraqi currency news, the most reliable source is the Central Bank of Iraq. It’s a good place to review an Iraqi currency chart or find out if the government is planning on a new Iraqi currency.
You can also use an IQD to USD conversion tool for the most up-to-date Iraqi currency exchange rate.
When you buy Iraqi dinar currency at a low cost, you will benefit if and when the Iraqi currency exchange rate improves. At the present time, the dinar to dollar ratio works in your favor because the dinar exchange rate allows you to leverage the purchasing power of the United States dollar.
Currently, Iraqi currency value is a speculation. Iraqi currency revaluation news has not yet identified when the exchange rate will change. All you can determine right now is that if you spend $1,000 USD, then you will get $1,192,000 IQD. This, to say the least, is a very good exchange rate should the IQD improve.
The Iraqi dinar currency exchange rate will improve if Iraq revalues its currency. The value of the dinar is at a low point, and many experienced investors are betting on the concept that at this point, the value can only go up. If the is a revaluation and the discrepancy between the United States dollar narrows than you could make 6 to 7 figures overnight. For this ideal scenario to unfold, you have to look at the revaluation potential based on economic recovery.
2. An Iraqi Dinar Revaluation Appears Realistic
The whole premise behind buying Iraqi currency is that the situation will change and that the Iraqi dinar will revalue. Once this happens, and once the gap between the United States dollar and the Iraqi dinar is less extreme, then you will be able to sell your dinars for a profit.
But revaluation is not the only reason why the exchange rate could improve. The exchange rate could improve for other reasons as well, such as a general improvement in the country’s fiscal health and economic growth. If the dinar still grows in strength against the dollar without any revaluation, then you will still make a profit.
Incidentally, there is no news right now of the Iraqi currency going international. Any change in the Iraqi dinar currency rate will be based entirely on the decisions of the country’s central bank. Revaluation will depend on whether or not the Iraqi economy is improving. Based on the current news, the Iraqi economy has not yet turned the curve towards adequate growth.
3. The Future of Iraq’s Currency Looks Good Based on Economic Advances
Three aspects of Iraq’s economic recovery are worth noting. First, the economic potential to supply the world’s oil is immense. Second, its legal and economic protection created by Executive Order 13303 allows it to grow unimpeded. Lastly, Iraq’s economic recovery after the fall of Saddam Hussein’s regime has been impressive.
Iraq’s Oil Potential
After rebuilding its oil production facilities following the war with the United States, Iraq’s economy is poised to steadily improve its supply of oil to meet the world’s growing need for fuel. According to Henry Thompson, the author of International Economics: Global Markets and Competition, Iraq has enormous crude oil wealth potential.
Although the world is shifting toward alternative energy production, oil is still the primary driver to meet the world’s need for energy consumption. Over the next 20 years, the world’s need for energy will double. In the next two decades, it is highly unlikely that alternative energy will have advanced enough to replace oil. Consequently, oil-owning countries with monopoly resources will continue to generate the bulk of energy sector profits.
Iraq is a major oil producing country. The Arab Gulf has the world’s largest oil reserves. This region of the world controls 65% of the world’s proven oil reserves, and of this percentage, Iraq accounts for 12% of it. What this means, says Thompson, is that Iraq can produce as much as two billion barrels a year. At $100 a barrel, the country could potentially gross earnings of $200 billion. Thompson believes that over the next 20 years, Iraq could generate $9 trillion if it could sell a quarter of its reserves at $100. The math, he argues, is simple: 90 billion barrels at $100 is $9 trillion.
Additionally, Iraq has large amounts of natural gas. These are usually found in conjunction with oil production. Much of this natural gas has not been tapped. Once utilized, it could be used for electricity production, which would drive domestic manufacturing. The gas reserves may also be a significant source of future exports, too.
But that’s not the whole story. Iraq has not been explored for more oil and gas reserves. Iraq could have even more resources than imagined.
Protection of Executive Order 13303
President George W. Bush issued Executive Order 13303 on On May 22, 2003, to protect the rebuilding of Iraq. The order protects the Development Fund for Iraq from liens or any legal attachments. In a nutshell, what this means is that the country can rebuild without any legal or economic interference. The order ensures a smoother economic recovery. This security will, of course, help Iraqi currency value and the Iraqi currency exchange rate to keep on growing stronger.
Iraq’s Economic Recovery After 2 Wars
Since Iraq’s economy is based on the oil industry, here is a brief history of the country to give you a sense of perspective about why there is a strong indication that the idea of an Iraqi dinar revalue is rooted in reality:
From September 22, 1980, to August 20, 1988, Iraq’s finances were severely impacted by its eight-year war with Iran because Iranian forces crippled its oil exporting facilities. The war inflicted a loss of $80 billion, and to survive the government resorted to austerity, started borrowing extensively, and pushed back its foreign debt repayments by negotiating for a rescheduled payment plan.
After the war, the country began heavily rebuilding. Despite the tremendous number of casualties among Iraqi men after the Iran-Iraq war, the economy gradually began to improve. New pipelines were built. Damaged facilities were rebuilt. Oil exports increased.
But, this recovery only lasted from 1988 to 2002. In 2003, the country was invaded by a coalition led by the United States under the erroneous Intelligence information that Saddam Hussein was harboring weapons of mass destruction. Although the government was overthrown, and Hussein flushed out from hiding, imprisoned and executed, the conflict did not come to an end but dragged on for most of the rest of the decade. Insurgent Islamic forces opposed the American forces and resisted the post-invasion government of Iraq.
Things began to turn around for the country in 2009 after President Obama ended the U.S. occupation. Oil exports returned to levels that resembled the era before Operation New Dawn. Despite continuing internal conflicts caused by Islamic State insurgents, government revenues skyrocketed as global oil prices rose. In 2010, foreign investors worked to rebuild the economy and by 2011, international oil companies had brought the oil up to 1.9 billion bbl (one barrel equals 42 US gallons).
Recently, Iraq has developed contracts with a number of major oil companies to further expand its oil revenues. These deals aim at upgrading pipelines, oil processing facilities, and improving export infrastructure. For instance, the Enka Sulaymaniyah Power Plant in Iraq was awarded the Global Best Project of last year by Engineering News-Record (ENR).
Iraq’s economy is also improving for other reasons, too. Increased foreign investments are rebuilding the retail industry, the construction trade, and, the energy sector. There are now broad economic improvements and an improvement in the standard of living. Finally, another sign of hope is that inflation has been dropping since 2006.
A Dinar Recap
As a result of the country’s slow recovery and its continued internal conflicts between various factions, the fate of the Iraqi dinar remains uncertain. Will there be an Iraqi dinar RV? If so, when? The slow pace has resulted in some investors in the United States calling a dinar investment a risky idea. This situation has resulted in negative press about the dinar.
What you have to remember is that investing in the Iraqi dinar is a long game. The country is recovering economically—but there are many internal political conflicts, the standard of living is still low, and the unemployment rate is still high. Buying Iraqi currency with your extra income is a speculation. You will need to stay on top of dinar updates if you buy the Iraqi currency.
Iraq, despite all its problems and continuing issues, is producing and exporting more oil, improving its infrastructure in all economic sectors, and is rising above its previously crippling inflationary trends. These are some good reasons to suggest that the currency will improve its exchange rate and revaluation is a distinct possibility.
Here at Treasury Vault, we work to stay on top of the primary factors that affect currency exchange rates. We do a vast amount of research on the dinar to stay on top of the latest Iraqi dinar news. As a result, we offer many dinar update reports. You can also buy Iraqi dinar from us in different note increments, ranging from 500 to 25,000. We suggest that you add a small percentage of Iraqi dinar to your portfolio, along with other assets, other currencies, gold, silver, and so on. To help you make wise investment choices, we offer self-directed IRAs. We expect Iraq’s economy to improve in time, and long-term investments to produce the desired results.