History of Iraqi Dinar
- History of Iraqi Dinar
- Iraqi Dinar Speculation, Iraqi Dinar News
- Iraqi Dinar Bank Notes, Iraqi Currency
- Iraqi Bank Notes 1990-2002 Series
- Iraqi Dinar current banknotes, New Iraqi Dinar
The Iraqi dinar or Iraq dinar was introduced by the Coalition Provisional Authority or CPA from October 15, 2003 to January 15, 2004. The CPA was an interim government or acting government set up by the United States and selected Iraqi persons. The dinar replaced the old Saddam notes (that bared his face) to give the Iraqi people and their country hope in the future of their new Iraq. This created 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 banknotes were exchanged for new at a one-to-one rate, except for the Swiss dinars, which were exchanged at a rate of 150 new dinars for one Swiss dinar.
The Iraqi dinar comes in denominations of 50, 100, 250, 500, 1000, 5000,10000 and 25000.
The dinar was printed by De La Rue an English company which is the world leader in anti-forgery techniques. De La Rue is the largest printer of currency in the world and trades publicly on the London Stock Exchange.
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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 quality notes issue was produced. 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 quickly, and in late 1995, US$1 was valued at 3,000 dinars.
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 new currency could be introduced.
Between October 15, 2003 and January 15, 2004, the Coalition Provisional Authority issued the Iraqi dinar coins and notes, with the notes 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 banknotes were exchanged for new at a one-to-one rate, except for the Swiss dinars, which were exchanged at a rate of 150 new dinars for one Swiss dinar.
These new banknotes led to a new industry of selling the new Iraqi dinar to oversea investors who hoped to profit from Iraq's new currency when the economy improved. The provisional government of Iraq has made this legal, but the banknotes are exchanged at different rates by companies wanting to make profit.
Although the value of the dinar appreciated following the introduction of the new banknotes from 4,000 dinars per U.S. dollar, at the time of their introduction, to a high of 980 dinars per dollar, it is now held at a "program" exchange rate, as specified by the International Monetary Fund, of 1170 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 dinar. The exchange rate available on the streets of Iraq was around 1500 dinar per US dollar in April 2006.
On May 3, 2007, the IMF released a statement in relation to the international compact with Iraq, which has turned the tide in regards to speculation on the Iraq dinar. The contents of the article discuss changes made in Iraq on the economic front of how the Iraq government had eliminated fuel subsidies. The article also stated that the Central Bank of Iraq had raised interest rates in an attempt to allow a gradual appreciation of the dinar in an attempt to fight dollarization of the Iraq economy. Although there are claims of widespread optimism of some language used later in the press release among some dinar speculators, there have been no publicly released statements or analysis by any news sources or governments.
Coins were introduced in 1931 and 1932 in denominations of 1, 2, 4, 10, 20, 50 and 200 fils, with the 200 fils known as a rial. The 20, 50 and 200 fils were minted in silver. In 1953, silver 100 fils coins were introduced.
Following the establishment of the Iraqi Republic, a new series of coins was introduced in denominations of 1, 5, 10, 25, 50 and 100 fils, with the 25, 50 and 100 fils in silver until 1969. In 1970, 250 fils pieces were introduced, followed by 500 fils and 1 dinar coins in 1982. Coin production ceased after 1990.
In 2004, new 25, 50, and 100 dinars coins were introduced. However, these coins proved to be unpopular:
In 1931, banknotes were issued by the government in denominations of ¼, ½, 1, 5, 10 and 100 dinar. The notes were printed in the United Kingdom. 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.
100 dinars notes ceased production in the 1940s but otherwise, the same denominations were issued until 1978, when 25 dinars notes were introduced. In 1991, 50 and 100 dinars were introduced, followed by 250 dinars notes in 1995 and 10,000 dinars notes in 2002.
Banknotes issued between 1990 and October 2003, along with a 25-dinars 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-dinars 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-dinars 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 at sometimes 30 percent per annum.
In 2003, new banknotes were issued consisting of six denominations: 50, 250, 1,000, 5,000, 10,000, and 25,000 dinar. The notes were similar in design to notes issued by the Central Bank of Iraq in the 1970s and 1980s. A 500 dinars note was issued a year later, in October 2004. In the Kurdish regions of Iraq, the 50 dinar note is not in circulation.