How is Purchasing Power different? Purchasing power is what a dinar can actually buy in goods, services and foreign currency. That is determined by real fundamentals…the credibility of monetary policy and the willingness of the market to hold the currency rather than flee it…A coordinated Real Effective Exchange Rate realignment managed by the central bank in concert with the gatekeepers is an attempt to set the rate at a lever that reflects those fundamentals and then defend it. It is not cosmetic…It requires…the political willingness to let the rate move in a controlled way and then hold it…A REER path…is harder, slower and more credible…That’s the route Iraq has taken…but the decision hasn’t been taken. A date has not been set…They’re not going to broadcast it. Militia Man [Post 2 of 2]
