Back in 2007 the Central Bank of Kuwait repeatedly and publicly stated there was no plans to change the exchange rate or abandon the peg to the US dollar. Officials including the governor dismissed speculation about a revaluation or a shift to a basket…Then on May 20, 2007 Kuwait abruptly dropped the dollar peg and switched to an undisclosed currency basket which was heavily weighted toward the euro and other currencies. The Kuwaiti dinar appreciated significantly against the US dollar in the following months…Why is this particularly relevant to Iraq today? Kuwait had built up very large reserves and had been running a managed peg for years…The decision was made quietly and internally when the central bank of Kuwait judged the fundamentals…justified a change. Militia Man [Post 1 of 2….stay tuned]
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