The dinar (pronounced: di-'när) (Arabic:
دينار, Kurdish: دینار) (sign: ع.د; code: IQD) is the currency of Iraq.
It is issued by the Central Bank of Iraq and is subdivided into 1,000
fils (فلس), although inflation has rendered the fils obsolete.
History of the Iraq Dinar
The dinar was introduced into circulation
in 1923, replacing the Indian rupee, which had been the official
currency since the British occupation of the country in World War I, at
a rate of 1 dinar = 13⅓ rupees. The dinar was pegged at par with the
British pound until 1959 when, without changing its value, the peg was
switched to the United States dollar at the rate of 1 dinar = 2.8
dollars. By not following the devaluations of the U.S. currency in 1971
and 1973, the dinar rose to a value of US$3.3778, before a 5 percent
devaluation reduced the value of the dinar to US$3.2169, a rate which
remained until the Gulf War, although in late 1989, the black market
rate was reported at five to six times higher (3 dinars for US$1) than
the official rate.
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
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
Between October 15, 2003 and January 15, 2004, the Coalition Provisional
Authority issued new 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
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. Due to the success of this program, though,
Iraqi dinar has been widely counterfited.
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 is around 1200 dinars per US
For a wider history surrounding currency in the region, see The History
of British Currency in the Middle East.
Speculation with the Iraqui
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.
Iraqi Dinars Bank notes
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
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.
According to a report on that was shown on 6 February 2010 on Al Iraqiya
TV channel, the Central Bank of Iraq considered a plan to redenominate
the Iraqi dinar in order to increase the stength level of the Iraqi
currency, which will allow people to carry less paper money. Mudhhir
Muhammad Salih, a member of a Central Bank advisory panel, told RFI that
the plan is to remove the zeros from the currency and phase out the
current banknotes late this year. Salih said by the end of 2010 the
current banknotes, e.g. 10000 dinars will turn to 10 dinars. This will
be while the old banknotes will be gradually removed from circulation.
He did not specify when the new notes would be issued. Both will be
legal tender in Iraq until the old notes are completely withdrawn.”