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A simulation of the dinar exchange rate linked to the basket of currencies

rocky
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A simulation of the dinar exchange rate linked to the basket of currencies - Page 5 Empty A simulation of the dinar exchange rate linked to the basket of currencies

Post by rocky on Fri 05 Jan 2018, 3:30 am

First topic message reminder :

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Introduction:
The stabilization of the national currency by a basket of currencies, which is among the world's exchange-rate regimes, as well as strict or flexible bilateral linkage. Therefore It is proposed that the dinar be pegged to a basket of major currencies, international reserve currencies, dominant in foreign trade and capital markets, United States Dollars. But Iraq has been used to favoring bilateral ties in its monetary history and to this day. It is no secret to the followers of the argument of bilateral linkage and dollars in particular That the source of foreign currency to Iraq is the dollar first, and secondly the dollar is often in official international reserves and about 65 percent in Third, Iraq's foreign trade depends on the dollar's currency, even with neighboring and Asian countries, and the fourth most countries depend on the dollar to intervene in the market Exchange is called the intervention currency, and in Iraq also operates the window of the central bank in dollars and so we call the currency of the window.

 
However, it is necessary to interact with the currency basket proposal and to discover patterns of exchange rate movement under this system. For those interested and decision-makers to consider the performance of this system and how it differs from the bilateral link.
 
The exchange rate of the dinar linked to a basket of currencies of varying weights:
In this note, a review of the exchange rate of the Euro, Pound Sterling, Yen and Swiss currency against the Dollar since the beginning of 1999. Then we assumed The Iraqi dinar was pegged to a basket of currencies according to three alternatives to weights between the first of January 1999, the beginning of the euro, and the beginning of the 10th of 2017.
 
The weights are:
First: 65% of the dollar; 20% of the euro; and the rest of the currencies 5% each.
Second: 60% for the dollar; 20% for the euro; 10% for the sterling; and 5% for the Swiss and Japanese.
Third: 50% to the dollar; 25% to the euro; 10% to the pound; 5.7% to the Swiss and Japanese.

The exchange rate of the dinar was then calculated according to the linkage of these currencies. For simulations we assumed starting from the beginning of 2012, and points could be selected Start again and recalculate but this does not affect the pattern of movement up and down. It is important to state the results of the currency basket commitment and its weights in the exchange rate calculation, And within a period of time sufficient for the occurrence of cyclical changes and fluctuations in the relationship between the major currencies in the world. At the starting point on the first day of the first month For the year the dollar was 1200 dinars, ie at the moment of transition from the binary system to the basket. The exchange rates of other currencies change in dinars according to their exchange rates In dollars. The result is shown in the table at the end of this note, which shows how much the exchange rate will be in accordance with the currency basket and its stated weights. Below is pure experience with the assumption that the exchange rate of another primary is 1700 dinars per dollar
 
The proposal to adopt a currency basket instead of a bilateral link means that the exchange rate of the dollar will change in dinars according to the exchange rate of the basket currencies against the dollar. How many will be Change ranges, this is what you find in the table. When pricing the euro or the pound in dinars it depends on the exchange rates between those currencies and dollars, for example:
Dollars per euro are multiplied by dinars per dollar and so on. So that the dealer who turned the dinar into euros and then to the dollar recovers the amount of the dinar He used it to buy the euro when converting dollars into dinars at the same market moment. Note that the euro exchange rate with the dollar is cyclical, and generally the trend of the exchange rate of all currencies for reasons related to Productivity and therefore export prices and balance of payments accordingly. Therefore, adoption of the basket does not guarantee a specific direction for the exchange rate of the dollar, or any Other currency, in dinars. And when the basket is adopted, it does not require changing the exchange rate daily, but enough per week or monthly.  These accounts and data presentations for clarification, and knowledge of the quantitative scope of the issue under discussion. When you switch to a basket, you need to agree on currencies Weights and why. The weights assumed in this note are close to the first alternative to the components of Iraq's international reserves. Relative components can be considered For foreign trade or others to propose weights.

Table (1)
Summary of exchange rate simulation results (JDs) when linked to a currency basket
From the assumed time horizon until October 2017

 
Table (1) Summary of exchange rate simulation results (JDs) when linking a basket of currencies from the assumed start date until October 2017
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Figure 1: Exchange rate movement between January 2005 and October 2017: Simulating the peg to the basket of currencies
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PDF [You must be registered and logged in to see this link.]
Note: this research id posted on the CBI website, [You must be registered and logged in to see this link.] , by  Dr.. Ahmed Ibrahimi Ali
 








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wciappetta
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Post by wciappetta on Sat 06 Jan 2018, 6:37 am

In reality all one needs to do is add a portion of the value of a barrel of crude oil to the mix and you have the "Frankel" formula  remember?

1/3 dollar,1/3 euro, 1/100 crude though based on what we now know of restoring to the former of 70's and early 80's  the formula more than likely would be something along the order of:

Dollar+Euro+2/100 price of barrel of crude =Iraq Dinar


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A simulation of the dinar exchange rate linked to the basket of currencies - Page 5 Empty Re: A simulation of the dinar exchange rate linked to the basket of currencies

Post by Diamond on Sat 06 Jan 2018, 6:51 am

[You must be registered and logged in to see this link.] wrote:In reality all one needs to do is add a portion of the value of a barrel of crude oil to the mix and you have the "Frankel" formula  remember?

1/3 dollar,1/3 euro, 1/100 crude though based on what we now know of restoring to the former of 70's and early 80's  the formula more than likely would be something along the order of:

Dollar+Euro+2/100 price of barrel of crude =Iraq Dinar
great reminder ward  thumbs
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A simulation of the dinar exchange rate linked to the basket of currencies - Page 5 Empty Re: A simulation of the dinar exchange rate linked to the basket of currencies

Post by zimi31 on Sat 06 Jan 2018, 7:49 am

[You must be registered and logged in to see this link.] wrote:
[You must be registered and logged in to see this link.] wrote:In reality all one needs to do is add a portion of the value of a barrel of crude oil to the mix and you have the "Frankel" formula  remember?

1/3 dollar,1/3 euro, 1/100 crude though based on what we now know of restoring to the former of 70's and early 80's  the formula more than likely would be something along the order of:

Dollar+Euro+2/100 price of barrel of crude =Iraq Dinar
great reminder ward  thumbs

Thanks Ward...as always, I appreciate your thoughts and explanations
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A simulation of the dinar exchange rate linked to the basket of currencies - Page 5 Empty Re: A simulation of the dinar exchange rate linked to the basket of currencies

Post by mochasmom on Sat 06 Jan 2018, 7:55 am

[You must be registered and logged in to see this link.] wrote:since spit ballin I think best time and window is during conference or morning after it ends... est opportunity to go international and launch reconstruction projects sssame time wanting moron foreign investors especially considering wold bank, imf and kuwait bank rolling  this conference
Feb sounds great to me!

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A simulation of the dinar exchange rate linked to the basket of currencies - Page 5 Empty Re: A simulation of the dinar exchange rate linked to the basket of currencies

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