Iraq plans to knock three zeros off the nominal value of bank notes to facilitate currency transactions, a central bank official said on Thursday.
Iraq is trying to revamp its economy and boost oil production after the effects of the war with crude deals that may vault it to one of the world’s top oil producers.
“The goal is to improve the payment and receiving system in the country and consequently to reform cash management,” said Mudher Kasim, a senior advisor at the central bank.
Iraqi payment systems rely almost exclusively on cash.
Iraq has 25 trillion dinars in circulation, officials say and hopes to have the new currency in circulation by the end of the year.
An Iraqi cabinet committee ordered the change in 2007, but the central bank did not think it appropriate until recently, Kasim said. The dinar’s value will remain unchanged, he said.
The dinar is managed through foreign exchange auctions, and traded hands at 1,170 per dollar at the last sale.