Iraqi dinar

The Iraqi dinar (ISO 4217: IQD, pronounced: di-'när) is the legal currency of Iraq. The dinar is issued by the Central Bank of Iraq.

Old Iraqi dinar

The Iraqi dinar was introduced into circulation in 1931 and was at par with the Pound sterling, the banknotes and coins were printed 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.Wheeler, Tony. West Asia on a Shoestring. 2nd. Hawthorn, Australia: Lonely Planet, 1990. 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.

New denominations

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.

Current specifications

Iraqi coins
Value	Composition	Obverse	Reverse	Mass	Diameter
25 dinars	Copper plated steel	Enscriptions: "Central Bank of Iraq" and "25 dinars"	Outline map of Iraq	2 g	17.5 mm
100 dinars	Nickel plated steel	Enscriptions: "Central Bank of Iraq" and "100 dinars"	Outline map of Iraq	4.3 g	22 mm

Iraqi banknotes
2003 series
Value	Colour	Obverse	Reverse
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 has now depreciated to an official exchange rate of 1,469.63 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, the dinar attracted many foreign speculators who rushed to purchase large quantities of this currency, usually from self-labelled Iraqi-dinar traders.

References

External links

Gourt Home::Gourt :: Iraqi dinar