Iraqi Dinar News

Iraq is suffering from political instability for the last many decades. The people of Iraq had to sacrifice for not only their lives and families but also their wealth, assets and standards of life. If we unfold the history of Iraq and it's currency, stunning realities will be struck to our mind how amazingly and mercilessly Dinar had been devalued due to the series of Wars imposed on the Iraqi people. As a result of World War1, Iraq was occupied by the British, and they setIndian rupee as their currency until the Iraqi Dinar IQD was introduced for the first time in 1932 The exchange rate was 1 Dinar = 11 rupees. At that time, dinar had been pegged to the value of the British pound since 1959. Then the peg was shifted to the United States Dollar without any change in the value, and the rate was 1 dinar = 2.8 dollar.

In 1971 and 1973, the United States currency devalued internationally, but the rate of the Iraqi dinar rose to 1 dinar = 3.3 dollar, and that rate remained constant with some fraction changes till the Gulf War. In 1991, president, Saddam Hussein had introduced new poor quality currency notes at the same rate. The previously running currency was called Swiss printed notes.

After the international sanctions from the United Nations, Iraqi Dinar fell down badly in the international market. Although dinar was not freely traded in the international financial institutions, Saddam and his high command authorities had maintained it's value against the U.S. dollar by the end of 1990. But in the next 5 years what happened to the dinar, you will be stunned to hear, the value of dinar in 1995 collapsed to 1000 dinars = $1. Excess printing of notes, fewer exports and sanctions from the United States were the root causes of the devaluation of the dinar against dollar.

After the invasion of Iraq in 2003, the Office for Reconstruction and Humanitarian Assistance (ORHA) had printed more old notes with the collaboration of Iraq Governing Council to get the flow of money back on the previous pace. In the last quarter of the 2003, Coalition Provisional Authority had issued new Iraqi dinar notes and coins to replace the old ones with one to one rate basis except the Swiss dinar. The rate of the Swiss dinar was declared 1 new dinar = 150 Swiss dinar.

After the establishment of the Maliki government and the evacuation of UN troops, financial reforms were made to strengthen dinar. Breakthrough is still awaited. The Iraq Business News has denied the possibilities of removing three zeros to make 1,000 dinars equal to 1 dinar. The story maker hopes that the change in the denomination will bridge the gap between the US dollar and dinar as 1 dinar = $1 as per the new strategy. The financial experts have not supported this plan strongly, but one financial school of thought argues that with the support of bulk production of petroleum products like gas and oil, stability in the political scenario and foreign investment, the economy will certainly grow, and strategy will work. The International Monitory Authority IMF is watching all the financial changes in Iraq very closely. The current rate of Purchase Iraqi Dinar is 1000 dinar = US$0.84.

The ground reality is that the current petroleum output of the Iraq has ramped up to 3 million barrels daily which meet 5th highest level in the world at present. A number of refineries and oil wells have been restored. So the signals are there for the dynamic growth of the Iraqi Dinar.