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The Iraqi dinar (pronounced: di-‘när) is the legal currency of Iraq.
The old Iraqi dinar
The Iraqi dinar was introduced into circulation in 1931 and was on par with the pound sterling. The Iraqi dinar replaced the Indian rupee, which was the official currency during the British occupation during World War I. After the 1958 coup d’état, the Iraqi dinar was disconnected from the pound sterling but still had a very high value.
After the 1991 Gulf War and due to the economic blockade and unrestricted printing of banknotes by the government, the dinar rapidly devalued and by the end of 1995, $1 was equal to 3,000 dinars.
Banknotes issued between 1990 and October 2003, along with a 25-dinar bill issued in 1986, feature an idealized engraving of former Iraqi President Saddam Hussein. After the 1991 Gulf War, Iraqi currency was printed on flimsy wood pulp paper (instead of cotton or linen) and using inferior lithography.
Counterfeit banknotes often appeared to be of better quality than the real thing. Despite the collapse in the value of the Iraqi dinar, the highest denomination printed until 2002 was 250 dinars.
The currency printed before the Gulf War was often referred to as the Swiss dinar. It got its name from Swiss printing technology, which allowed the production of banknotes of much higher quality than those later produced under the economic sanctions imposed after the first Gulf War. After the exchange period, the Iraqi government disavowed the currency. However, the old currency continued to circulate in the Kurdish regions of Iraq until it was replaced by the new dinar after the second Gulf War.
The new Iraqi dinar
Between October 15, 2003, and January 15, 2004, the Coalition Provisional Authority issued a new Iraqi dinar to “create a single unified currency used throughout Iraq.”
The Hampshire-based “De La Rue” company printed the new Iraqi dinar, also known as “Post – Saddam,” in England, in six denominations: 50, 250, 1,000, 5,000, 10,000, and 25,000 dinars.
In November 2004, the Central Bank of Iraq issued a new 500-dinar banknote to facilitate market transactions. The banknotes are beautiful and have “Swiss” quality and many security features that make them very difficult to counterfeit, including watermarks, metallic ink, security threads, ultraviolet images, and raised lettering.
The value of the new dinar
Iraq has the second-largest oil reserves in the Middle East and the largest reserves of natural gas. The new Iraq will be able to take full advantage of exporting these resources once sanctions are lifted.
As Iraq is welcomed back into the international community, the value of the new Iraqi dinar should rise. How high? That’s what is being speculated about when buying Iraqi Dinars! (And no one dares to predict!)
