Learn more about Iraqi dinar
Old Iraqi dinar
The Iraqi dinar was introduced into circulation in 1931 and was at par with the pound sterling. Both the banknotes and the coins were printed and minted in the United Kingdom. The Iraqi dinar replaced the Indian rupee which was the official currency after the British occupation of the country in World War I. From 1931 to 1947, the banknotes were issued by the Iraqi currency board for the government of Iraq and banknotes were convertible into pound sterling. From 1947, the banknotes were issued by the National Bank of Iraq, then after 1954 by the Central Bank of Iraq. After the 1958 coup d'etat, the Iraqi dinar was dissociated from the pound sterling, but continued to have a very high value of $3.3 for the dinar.
In late 1989, the official exchange rate was 0.31 dinar for US$1. The black market rate was reported as being five to six times (1.86 dinars for US$1) higher than the official rate.<ref>Wheeler, Tony. West Asia on a Shoestring. 2nd. Hawthorn, Australia: Lonely Planet, 1990.</ref>
After the Gulf War in 1991 and due to the economic blockade the previously used Swiss printing technology was no longer available. A new inferior notes issue was created. The previous issue became known as the Swiss dinar and continued to circulate in the Kurdish region of Iraq. Due to excessive government printing of the new notes issue, the dinar devalued fast, and in late 1995, $1 equalled 3000 dinars.
Banknotes issued between 1990 and October 2003, along with a 25-dinar note issued in 1986, bear an idealized engraving of former Iraqi President Saddam Hussein. Following the 1991 Gulf War, Iraq's currency was printed both locally and in China, using poor grade wood pulp paper (rather than cotton or linen) and inferior quality lithography (some notes were reputedly printed on presses designed for printing newspapers).
Counterfeited banknotes often appeared to be of better quality than real notes. Despite the collapse in the value of the Iraqi dinar, the highest denomination printed until 2002 was 250 dinars. In 2002, the Central Bank of Iraq issued a 10,000-dinar banknote to be used for "larger, and inter-bank transactions". This note was rarely accepted in practice due to fears of looting and counterfeiting. This forced people to carry around stacks of 250-dinar notes for everyday use. The other, smaller bills were so worthless that they largely fell into disuse. This situation meant that Iraq, for the most part, had only one denomination of banknote in wide circulation.
Currency printed before the Gulf War was often called the Swiss dinar. It got its name from the Swiss printing technology that produced banknotes of a considerably higher quality than those later produced under the economic sanctions that were imposed after the first Gulf War. After a change-over period, this currency was disendorsed by the Iraqi government. However, this old currency still circulated in the Kurdish regions of Iraq until it was replaced with the new dinar after the second Gulf War. During this time the Swiss dinar retained its value, whilst the new currency consistently lost value (sometimes at 30% per annum).
Following the deposition of Saddam Hussein in the 2003 invasion of Iraq, the Iraqi Governing Council and the Office for Reconstruction and Humanitarian Assistance began printing more Saddam dinar notes as a stopgap measure to maintain the money supply until a new currency could be introduced.
New Iraqi dinar
Replacing the notes
Between October 15, 2003 and January 15, 2004, the Coalition Provisional Authority issued the new Iraqi dinar printed by De La Rue using modern anti-forgery techniques to "create a single unified currency that is used throughout all of Iraq and will also make money more convenient to use in people’s everyday lives". Old dinars were exchanged for new dinars at a one-to-one rate, while Swiss dinars were exchanged at a rate of 150 new dinars for one Swiss dinar.
The new banknotes consisted of six denominations: 50, 250, 1000, 5000, 10000, and 25000. The notes were similar in design to notes issued by the Central Bank of Iraq in the 1970s and 1980s. A 500 dinar note was issued a year later, in October 2004. In December 2004, the Central Bank of Iraq announced that it would issue new coins, effective from 2 January 2005, in denominations of 25 and 100 dinars.
|25 dinars||17.5 mm||2 g||Copper plated steel||Enscriptions: "Central Bank of Iraq" and "25 dinars"||Outline map of Iraq|
|100 dinars||22 mm||4.3 g||Nickel plated steel||Enscriptions: "Central Bank of Iraq" and "100 dinars"||Outline map of Iraq|
|50 dinars||Purple||Grain silos at Basra||Date palms|
|250 dinars||Blue||An astrolabe||Spiral minaret at Samarra|
|500 dinars||Bluish-Green||Ducan Dam on the Al Zab river||Assyrian carving of a winged bull|
|1,000 dinars||Brown||A gold dinar coin||Al-Mustansirya University, Baghdad|
|5,000 dinars||Dark blue||Gully Ali Beg and its waterfall||Desert fortress at Al-Ukhether|
|10,000 dinars||Green||Abu Ali Hasan Ibn al-Haitham||Hadba Minaret at the Great Nurid Mosque, Mosul|
|25,000 dinars||Red||A Kurdish farmer holding a sheaf of wheat||Carving of King Hammurabi|
Value of the new dinar
Although the value of the new Iraqi dinar appreciated from 4,000 dinars per US dollar, at the time of its introduction, to a high of 980 dinars per US dollar, it is now held at a "program" exchange rate, as specified by the International Monetary Fund, of 1,449 dinars per US dollar at the Central Bank of Iraq. However, there is not yet a set international exchange rate, and so international banks do not yet exchange Iraqi dinars. The exchange rate available on the streets of Iraq is currently around 1500 dinars per US dollar (April 2006).
Iraqi dinar speculation
Immediately after the issue of the new Iraqi notes, many scams appeared promoting speculation in the new Iraqi dinar. These sites advertise heavily on conservative websites and magazines, and sell the Iraqi currency at a huge mark up. The websites promise profits of up to 1000%, but in fact no currency in history has ever appreciated 1000% against the United States dollar, and a currency swing that severe would have negative consequences for Iraq's economy. Investment experts strongly oppose speculation in the Iraqi dinar. <ref>http://money.cnn.com/2004/08/10/pf/expert/ask_expert/</ref>
- Coalition Provisional Authority and the Iraqi dinar
- Council on Foreign Relations: benefits of the new Iraqi dinar
- Sanctions on Iraq
- Central Bank of Iraq
|Current||Algerian dinar | Bahraini dinar | Islamic gold dinar | Iraqi dinar | Jordanian dinar | Kuwaiti dinar | Libyan dinar | Macedonian denar | Tunisian dinar | Serbian dinar | Sudanese dinar|
|Defunct||Abu Dhabi dinar | Bosnia and Herzegovina dinar | Croatian dinar | Krajina dinar | Republika Srpska dinar | South Arabian dinar | South Yemeni dinar | Yugoslav dinar|
|As subunit||Iranian rial|