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What are dinar revaluation schemes?

A:

Quick Answer

In dinar revaluation schemes, promoters claim that currency regulators will revalue the Iraqi dinar to a much higher rate, explains Investor Place. However, most experts do not expect any such revaluation. Many Iraqi dinar promoters are linked directly to currency traders that charge as much as 20 percent to buy Iraqi dinars with U.S. dollars.

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Full Answer

Rather than rise, the Iraqi dinar is more likely to decrease in value as Iraq suffers through sectarian conflict and high inflation, as Investopedia and Learning Markets explain. Additionally, the Iraqi government may redenominate the Iraqi dinar in the near future, making it extremely hard to exchange the currency except in Iraq. Unlike revaluation, redenomination does not change the absolute value of a currency; instead, it exchanges a set amount of old currency for a set amount new currency that holds the same market value.

Iraqi dinar promoters, who generally use Internet forums and social media, often claim returns of several thousand percent, which is essentially too good to be true, states Investor Place. Though the Iraqi dinar trades at about 1,200 to one U.S. dollar, this does not affect the ability of Iraq to import or export goods. Many other currencies trade at similar levels to the U.S. dollar, including the currencies of South Korea, Vietnam and Madagascar.

Even if the Iraqi dinar does rise, investors would have trouble making a profit after paying the huge fees that currency dealers charge to exchange Iraqi dinars, states Investopedia. The FBI is investigating Iraqi dinar schemes as of 2015, reports Forbes.

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