Iraqi Dinar – Dinar
The Iraqi Dinar Summary Issued by the Central bank of Iraq, Iraqi Dinar is the legal currency of Iraq.
Old Iraqi Dinar In 1931, the Iraqi Dinar came into circulation and was equivalent to the Pound Sterling. The Indian Rupee replaced the Iraqi Dinar, which was the currency of Iraq when it was still under the British’s rule. It was disassociated form the Pound Sterling after the year 1958 but it was still valued highly. Due to increasing inflation and the Gulf War in 1991 and many economic restrictions, the value of Dinar fell swiftly, so much so that it came to an exchange rate of 1 US Dollars to 3000 Dinars. During the years spanning from 1990 and October of 2003, the notes minted bore the engraving of the then President Saddam Hussein. After the Gulf War, the notes that came into being were minted using sub-standard quality. As such, it so happened that the counterfeit notes that were made often happened to be of a better quality then the actual ones Swiss Dinar was the name given to the Iraqi currency that was minted before the Gulf War took place in 1991. It was so because the notes were of good quality and were minted using Swiss technology. After some changes, the government of Iraq abolished the old currency. Despite that it was still in use in some of the more rural areas of Iraq, and saw continued use until the new Dinar took over after the Gulf war II.
New Iraqi Dinar During the time between 15th of October 2003 and 15th of January 2004, a new currency was brought forth by the Coalition Provision Authority of Iraq with the intention to create a single standard of currency that would be used in all of Iraq. De La Rue, a company based in Hampshire was given the task to print the new currency of Iraq in six different banknotes, which were: 50, 250, 1000, 5000, 10,000 and 25,000. A new 500 Dinar denomination has been launched as of November 2004, by the CBI for ease of bartering. The notes have been minted with many specifications that make it hard to duplicate.
Positive Changes in Iraq There have been changes in Iraq since the reign of Saddam Hussein, mainly political and economical. The political changes coupled with the new building of infrastructure will stabilize the tumultuous nature of the region. The newly elected government has made the monetary system in such a manner that it welcomes international investment. With such changes and many more positive changes coming up in the near future, experts are of the opinion that this will seriously increment the exchange rate of Iraqi Dinar.
More Treasury Bills on the Way More treasury bills are going to be issued soon by the Iraqi government. The CBI in an auction gave away Treasury bills in July after many years. So far local banks have acquired some 900 billion Iraqi Dinars, which translate to 628 million US Dollars. The CBI is planning to increase the foreign-currency reserves to increase the exchange rate of the Iraqi Dinar. A feasible domestic capital trade will ensure the decrement in the debt that had been incurred by Iraq before the war. This along with the debt-reduction offered to Iraq by the Paris Club agreement will push forward Iraq’s economic growth. The current plans by the Iraqi government to induce economic growth along with heightened stability in the region have increased the lucrative nature of investments in Iraq.
The Central Bank of Iraq Many foreign banks have been given banking licenses by the CBI in recent times. Some of the well-known international banks that will establish bases in Iraq are: Commercial Housing bank, Standard Chartered and HSBC. This will eventually create a free-market which is necessary condition for economic growth. This process will ensure higher chances of Iraq’s Dinar value to increase.
The Potential of the Dinar The Iraqi dollar was exchanged at a rate of 3.35 US Dollars to a Dinar before the UN sanctions to Iraq. Before the war took place, the Iraqi Dinar was at a low value of 0.33 US Dollars to a Dinar and it fell further as the military operations increased. After the war though, the exchange rate increased by 25 percent. There have been many countries which have recovered from such currency devaluation, such as Germany in World War II and Kuwait after the invasion of Iraq. The exchange rate of Dinar has already increased from the 3500 Dinar it was while the invasion was on going to 1400 Dinar. This growth has high chances of accelerating, once the country reaches its potential of oil production.
The New Iraqi Dinar Banknote The Great Britain based company De La Rue, which happens to be world’s largest commercial security printer, has been given the task of minting the new banknotes of Iraq currency. The Iraq Dinar which is now being issued has been implemented with many security features. The currency is available the following denomination: 50, 250, 1000, 5000, 10000, and 25000 As Iraq rebuilds its infrastructure and with the increased stability in the region, investment in the Iraqi Dinar is being seen as a lucrative option. With the newly established democracy, which has seen good success in the Iraq, the nation is set towards a heightened economic growth. With revelation of new oil reserves, Iraq is poised to become the number producer of crude oil. What’s more, the debt owed by Iraq has now virtually turned nil, after the Paris Club agreement. As such investment in Iraq could be great move.
Wall Street Journal 11/24/04 Major contributions have been made by the international community. A massive debt relief has been granted to Iraq. In particular, the Paris Club agreement has made Iraq almost free from the high amounts of debt it was under, allowing easier economic growth for the country. The wage provided to the people in Iraq has been increased to thrice the value paid anywhere else in the Middle Eastern country. Many companies have heavily invested in re-building the infrastructure of the country.
Wall Street Journal 11/24/04 There was a time when the Iraqi people would hold on dollars as a means of saving. Now, with the introduction of the new Iraqi currency they are hoarding it as a future saving. The minting of the new currency is restricted unlike the ones printed under the old regime, which seriously increased the inflation. The current currency of Iraq is stable and growth in its value can already be seen.
US Department of State: Bureau of Public Affairs 06/30/04 Iraq happens to possess the largest gas reserves in the world and is the second largest producer of oil. It is important to note that cost incurred to produce oil in Iraq is extremely low compared to other countries. Also, out of the total number of eighty oil fields that are known to be present in Iraq, only seventeen are in usage. With new technologies the daily production of Iraq could reach as much 10 million barrels everyday day. As such, Iraq has an extremely high potential for growth.
The New York Times 05/03/05 A similar situation was faced by Kuwait in the 90’s when currency fell by the same percentage. Kuwait however, since then has made a full recovery. “If post-war Kuwait is any example: A Kuwaiti Dinar was valued at about a dime after the war. Each now brings in $3.40…If (Iraq Dinar) jumps to a few cents, (investors) can start paying off mortgages.” Stars and Stripes Mid-east ed., 10/15/04 Comparing the same situation of Iraq to Germany post World War II, Germany took 3 years to finalize a new currency, whereas Iraq has done it within 6 months. The revenues generated from oil production and the assets of the former President Saddam Hussein are now being used for re-building the infrastructure of the nation and other socio-economic projects to develop the country, such as increasing the number of teachers, rebuilding schools, operation of hospitals, functions of power supplies, water and irrigation etc. Many countries have let their helping hand to Iraq for its development, and some have even allowed personnel for work in the country. US Treasury along with the government of Iraq are trying to establish a decentralized system of baking in Iraq. There is plenty of land in Iraq which is fertile and water is available in the nation, which is rare in a Middle Eastern country. The government is trying to rebuild the agricultural section of Iraq. The second largest reserve of oil in the world is held by Iraq, with nearly most of its income coming through oil export. This along with the continued rise of oil prices and Iraq is poised to bounce back as a powerful economic country. The Iraqi Dinar has already increased in value from 3000 Dinars to 1200 Dinars, since the new currency was introduced a few years ago. This increment has high chances of growing further, with Iraqi government making all the right moves to ensure economic growth. Recently a new stock market was opened in Iraq which met with good success. Property market in Iraq is also on the rise with money moving into the country and allowing people to buy homes which they previously could not afford.
Before Saddam came into power the Iraqi Dinar was worth $3.30 US Dollars PER ONE Dinar. The Iraq Dinar traded at 3.30 US Dollars to a Dinar before Saddam Hussein became the president of Iraq. This exchange rate is not uncommon for a Middle Eastern country. However, after assuming power Saddam Hussein lost two wars with Iran and Kuwait and sanctions by the UN to Iraq caused the value of Dinar to fall. Before the commencement of Operation Freedom, the trading value of the Dinar was 0.31 US Dollars to a Dinar.
Right now you can buy 1 Million Dinars for about $1000.00 US. This value is extremely less, something in the range of 0.001 US Dollars to a Dinar. Investors have bought the new Iraqi currency by billions. Even if Iraq falls short of the projected growth and the value of the Dinar only increases to 0.01 US Dollars to a Dinar, then the 1 million Dinar bought for 1000 US Dollars would be equivalent to 10,000 US Dollars. However, financial experts are of the opinion that Iraq will cross the old exchange rate of Dinar once it reaches its maximum potential. The reason the new currency of Iraq is not available from a bank right now is because a fixed trading rate has not been set internationally as of yet. This is the reason that this opportunity is available to you. The only possible method to acquire Iraq Dinar right now would to be present in Iraq. We have legal channels to money brokers present in Iraq through which we make the currency available for you. Once the exchange rate is fixed, the new Iraqi currency could be taken to any international bank or exchanging agencies for trading in other currencies. We understand that before investing you would like to acquire more information about the procedure of acquiring Iraqi Dinar and other related details. We recommend that you peruse the Frequently Asked Questions (FAQ) page to find unbiased and credible information about investing in the New Iraqi Dinar.
