If you had a contract...any contract with Iraq for any amount...lets say $12 million...that is payable on the first of each month at $1 million per month...what do you care about? Regardless of what the exchange is or isn't...all you care about is that $1 million hits your bank account on time each month. You couldn't care any less what the exchange rate is. However! Iraq, who is the payer does care what the exchange rate is and that is why they will need a stronger rate very soon.
[it seems to me it will be costing them a heckuva lot less with a strong rate, really quickly.]
you are correct.
Iraq could try to do international commerce at 1166 once they move to Article 8 however, they would be broke in less than a year.
In other words...paying 1166 IQD for every $1 would break them.
Iraq doesn't have enough IQD.