Article: “The Central Bank of Iraq, announced issuing new cash paper category fifty thousand Dinars, includes writings in the Kurdish language…” Article quote and explanation from 5-24-2015: “this is a preliminary step to remove zeros from the Iraqi currency in the coming years”, adding that “these two categories will facilitate the process of deliberation of the Iraqi dinar exchange for hard currency.”
The quote specifically says that both the introduction of the larger notes AND the removal of the three zeros notes after that will lead to the “deliberation of the Iraqi dinar exchange for hard currency.”
In other words, the article’s writer is confirming my analysis that the introduction of the larger notes will lead Iraqis away from dollars since they will, after their introduction, have their own equivalent of a $50 and $100 bill, although worth just slightly less. This will reduce the demand for dollars, and probably quickly, since they won’t have to pay the 8% “vig” to get the dollars anymore.
Reduction in dollar demand is the same as increasing demand for dinars, meaning the value of the dinar will begin to rise. At some point, “over the next years” and after they change the exchange rate regime to a float, the demand will reach levels where the three zero notes will be withdrawn due to their being worth too much to carry.