- CNTV English - CCTV News

Iraq in hyperinflation; currency to be revalued

09-08-2011 09:38 BJT

Watch Video

Play Video

While many Asian nations battle stubbornly rising prices, Iraq offers an example of the extreme - hyperinflation, that is - inflation that has spiraled out of control.

It occurs when there is an unchecked increase in the money supply. Iraq's central bank is planning to solve the issue by completely re-valuing its Dinar.

In countries experiencing hyperinflation, the central banks often falls into a vicious cycle - printing money in larger and larger denominations as smaller denomination notes become worthless. One way to avoid the use of large numbers is by declaring a new unit of currency.

Mudher Kasim, Vice President of Iraq Central Bank said, "Over the past 30 years, inflation and economic intervention has caused the denomination of the Dinar to continue to rise. But the exchange rate is so low that the highest denomination is worth less than 25 dollars. Therefore, we need to carry out currency reform."

While many Asian nations battle stubbornly rising prices, Iraq offers an example of the extreme - hyperinflation.

Iraq's central bank announced back in June that it would re-denominate the Iraqi Dinar, removing three zeroes.

The central bank says complete currency reform will take 2 to 3 years. Experts say it won't be an easy task.

Adnan Al Sady, an economic analyst said, "It is unfortunate that the Iraqi market is unstable right now. Currency reform will have great impact on the market. That's what we are worried about."

Many residents are also concerned about what impact the change might have on their spending habits.

Majeed Laftah, a resident in Baghdad said, "The sudden change of the Dinar might cause problems. We hope that after the currency reform, we can still buy things like the way we did before."

Right now, the highest denomination of Dinar is 25 thousand, and the lowest is 250. One U.S dollar is equivalent to 1180 Dinars.

Iraqi Dinar

Editor:Li Wanran |Source: CNTV.CN

Hot Videos view more

The celebrations are still continuing as the victorious coach, Joachim Loew, has been honored for his achievement in his hometown of Freiburg.
Germany coach Loew honored in hometown of Freiburg

Chinese men´s national team continued its preparations for next year´s Asian Cup, as they managed a one-all draw against visitors Jordan during a football friendly in Harbin, the capital city of Northeast China´s Heilongjiang Province.
China held to 1-1 draw by Jordan

The defending world champs came into the contest with a perfect 6-and-oh record, but they would be in for a tough first half before opening things up in the second.
USA beat Slovenia 119-76 in quarter-finals

Hot Stories more

UK authorities believe killer of James Foley is a British national

Across the UK the hunt is on for James Foley’s killer, who authorities believe is a British national. As Richard Bestic reports from London, Prime Minister David Cameron cut short his summer break to lead his government’s response.

Israeli war jets renews Gaza strike as truce talks stalled

Three Palestinians were killed and 40 others wounded in the intensive Israeli war jets´ airstrikes on the Gaza city on Tuesday night, shortly before an end of a 24-hour ceasefire in the Gaza Strip,

Missouri police arrest dozens after violent night

As the protests in the town of Ferguson, Missouri turned violent with police facing ´heavy gunfire´ from some ´criminal elements´, cops fired tear gas, stun grenades and arrested 31 demonstrators on Monday night.

Picture in news more

More Video News

Choose TV Program