Iraqi dinar

	Iraqi dinar; دينار عراقي (Arabic)
25,000 dinars banknotes	1972 25 fils coin
ISO 4217 Code	IQD
User(s)	Iraq
Inflation	4.7%
Source	The World Factbook, 2007 est.
Subunit
1/1,000	fils
Symbol	ع.د
Coins	25, 100 dinar
Banknotes	50, 250, 500, 1,000, 5,000, 10,000, 25,000 dinar
Central bank	Central Bank of Iraq
Website	www.cbi.iq

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The dinar (Arabic: دينار, Kurdish: دینار, ISO 4217: IQD, pronounced: di-'när) 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.

[edit] History

The dinar was introduced into circulation in 1931, 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 (1.86 dinars for US$1) than the official rate.^[2]

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 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."^[3] 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.

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,^{[citation needed]} of 1187 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 dinars per US dollar in April 2006.

[edit] Speculation

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 wide-spread 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.^[4]

[edit] Coins

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 and 100 dinars coins were introduced. However, these coins proved to be unpopular:

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

[edit] Banknotes

Old banknote note featuring Saddam Hussein

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.

[edit] 1990-2002 Series

1990-2002 Series
Image		Value	Main Colour	Description
Obverse	Reverse	Value	Main Colour	Obverse	Reverse
		1/4 Dinar	Green	Palm trees	Building
		1/2 Dinar	Violet	Astrolab	Great Mosque of Samarra
		1 Dinar	Pink & Green	Coin	Musanteriah School
		5 Dinar	Red	Saddam Hussein	Soldier's tomb
		10 Dinar	blueish-green	Saddam Hussein	Winged beast
		25 Dinar (1990)	Green	Horses	Building
		25 Dinar	Brownish-Green	Saddam Hussein & Horses
		25 Dinar (2002)	Green	Saddam Hussein	Ishtar gate
		50 Dinar (1991)	Pink and Green	Saddam Hussein	Great Mosque of Samarra
		50 Dinar (1994)	Brown and Blue	Saddam Hussein	Saddam Bridge
		100 Dinar (1991)	Green & Purple	Saddam Hussein	Swords
		100 Dinar (1994)	Blue	Saddam Hussein	Baghdad Clock
		100 Dinar (2002)	Blue	Saddam Hussein	Old Houses
		250 Dinar	Violet	Saddam Hussein	Liberty Monument friese
		250 Dinar	Violet	Saddam Hussein	Dome of the Rock
		10,000 Dinar	Pink / Violet	Saddam Hussein	Arabic astrolabe

[edit] Current banknotes

2003 Series
Image		Value	Main Colour	Description
Obverse	Reverse	Value	Main Colour	Obverse	Reverse
		50 dinars	Purple	Grain silos at Basra	Date palms
		250 dinars	Blue	An astrolabe	Spiral minaret of the Great Mosque of 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	Mustansiriya 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 the Code of King Hammurabi