I have been of the opinion that the new rate would equal Kuwait within a cent or two. Several in our community have embraced similar views. This makes sense from an economic prospective. Iraq and Kuwait are virtual equals in terms of oil production and GDP. Kuwait is of course much more stable.
But I had a thought recently about the rebuilding of the cities damaged by the battles to liberate them them from the isis terrorists.
Would they not benefit from raising the exchange rate higher for a year? $4.25-4.50?
They will need massive shipments of steel, copper pipe, copper wire, and lime to rebuild the cities destroyed in removing the isis infection. A higher exchange rate would reduce their import costs. It would not effect exports as their only major export is oil and that is traded in US Dollars.
Yes, it would increase a societal trend toward buying and consumption , but after 15 years of near bankruptcy is that terrible?
I'm not making predictions like some half-assed guru, just asking for opinions.