Kaperoni

  In Kaperoni 

Sandyf wants to get into a discussion with me about floating the Iraqi dinar…read the IMF Article IV Consultations…quote from the IMF Article IV consultation of 2013: “14. The de facto fixed exchange rate has served Iraq well. The authorities agreed that a stable nominal exchange rate provides a valuable anchor for inflation expectations in an uncertain environment, and intend to continue implementing this policy for the foreseeable future. In the medium term, staff encouraged the authorities to consider creating the conditions which would make possible a move to a more flexible exchange rate policy.  Such flexibility could allow a predictable and gradual appreciation of the nominal exchange rate, triggered by strong oil revenues and the Balassa-Samuelson effect, to accommodate a possible real exchange rate appreciation while keeping domestic inflation low.” In plain English the IMF is encouraging Iraq to get off the peg and move to a float to allow a predictable and gradual appreciation over time as the economy grows. They are not talking about devaluation.

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