Saddam’s seizure and good news about the dinar

I have heard numerous scenarios of how the capture of Saddam might prove counterproductive for Iraqi reconstruction. Perhaps the Shiites no longer need U.S. protection from a Saddam return, and they will cease to support us. Perhaps the American public will now demand a premature withdrawal of U.S. troops from the country.

The market appears to disagree with these fears. Since the capture of Saddam, the Iraqi dinar is up nearly eight percent, as reported by The Financial Times. Since mid-November the currency is up sixteen percent. To be sure, this price is a managed float. Nonetheless the price is set in a daily bank auction, combined with information taken from the street markets. It is commonly conceded that the market is a good barometer of Iraqi political expectations about the future of the country.


Comments for this post are closed