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The Future for the Iraqi Dinar

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The Future for the Iraqi Dinar

We get many enquiries at Iraq Business News relating to the future of the Iraqi dinar (IQD), for example:

  • Will the Iraqi dinar increase in value?
  • Will the currency be re-denominated, dropping the ‘three zeros’?
  • Is it wise to buy Iraqi dinar?

Firstly, Iraq Business News is not in a position to give investment advice. Our mission is to provide our readers with the highest quality information on the business and economy of Iraq. We hope that this information will be useful to decision-makers at all levels.

Regarding the dinar, we do not have a crystal ball, but in the past the ramping up of petroleum production has often caused currencies to rise, and it is certainly the plan over the coming years to greatly expand Iraq’s oil and gas output.

Experts debate  whether re-denominating the currency (dropping the zeros) would help the economy or change the underlying valuation of the currency, and we present all sides of that debate. Read more …

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11 Responses to “The Future for the Iraqi Dinar”

  1. [...] always, we will inform readers via the Iraq Business News website as soon as we have anything relevant to [...]

  2. Dave says:

    I would like to enquire as to where on earth could one deposit Iraqi Dinars in the Gulf (currently located in Kuwait) before the end of 2010. Are there any banks that would accept IQD with a GCC residence?

  3. Liz says:

    Anyone that happens across this do NOT freak out when you read that you will have to trade 1000 old dinars for 1 new dinar;

    If you are exchanging for USD, you will trade 1 dinar hopefully for 1 dollar or more.

  4. Editor says:

    Liz,

    thank you for your comment.

    Just to clarify, are you really suggesting that a redenomination (dropping the three zeros) would make holders of dinars 1,000 times richer?

    If so, can you point to any country where a redenomination has worked in that way?

    Best Wishes,
    Editor

  5. Stew says:

    To the editor:
    Believe it or not, there are numerous websites were thousands of people are gathered who believe exactly that. They believe the delete 3 zero plan is a huge revaluation of the currency and they are soon to be millionaires.
    The delete 3 zero plan has been talked about for years now and all these people believe that Iraq is pre-announcing to the world their intention of a 100,000 to 300,000 % increase in the value. Yet you can still buy dinar for $850 per million from about 100 different sources.
    STUNNING!

  6. Liz says:

    Will try and reply when I get home from work, am running behind… thought I would leave this in the mean time:

    Trade agreements and currency and its impact on Iraqi economy

    (Voice of Iraq) – 22/11/2010

    By: d. Abdullah Ali Awad

    It has become among the fashionable and as an economic activity a natural question of the transfer of billions of dollars out of Iraq by private sector banks under the trade deals, and the bulk has not returned to Iraq in imports is needed by the Iraqi market, but turning part of them to the real estate companies and the other part remained balances reviews in foreign banks, and all this happened in the absence of strict financial control deliberately six years ago, and continued to this day without setting the parameters and controls (legislation), to prevent the sale of billions of dollars abroad, and directed towards development. Imports that the private sector for the past five years 2006 – 2010, according to official statements amounted to $ 180 billion! True it is possible to say, because of the economic blockade harsh, which made people sell every thing you own, in order to obtain a living, and after the fall of the Baathist regime of arbitrary, rushed the Iraqis after the rise in their purchasing power to acquire what they need in their homes and make up for what they sold in previous years, But my question is – how much is the share of imported technology from abroad of those billions? .. The answer is zero, nothing like that! Vleutbakt economic policy effective limit the dumping of the internal market, by raising the tariff increase Alگmrگip and rehabilitation of public sector companies and the agricultural sector through the financial allocations sufficient, for it was possible to allocate the bulk of the money leaks out to fill the shortfall in the annual budgets, which is ( chronic disease), which the government no longer able to get rid of it, which will be by 25 billion Dolarvi balance of 2011, but we find the allocations of the Ministry of Industry for the year 2010 is $ 72 million, and this amount is enough to qualify tenth factories belonging to the Ministry of Industry, therefore, the stalemate in the development of industry and agriculture, it was not spontaneous or stems from lack of experience, but a deliberate policy by some parties in power to protect the merchant class parasites, who make up the interface and sponsorship funds and operated in a commercial activity, and some traders are independent heads of their money paying royalties to some influential people in power in order to continue sabotage their business.

    The last trade agreements, concluded with the Turkish side, which provides for lifting of trade exchange between the two countries to $ 18 billion, but what will be Iraq to Turkey!! … Nothing at all, means more deals flooding the domestic market and the expansion and recovery of parasites merchants.

    In connection with the currency and deleting three zeros from Iraqi dinar, has been published and DVDs 8.9.2010 on my site civilized dialogue and the voice of Iraq, an article entitled [Remove zeros and raise the purchasing power of the Iraqi dinar] have shown my opinion at the time, but I want to clarify in addition to the deletion of three zeros is the following: –
    First – you must cancel the nominal current of the Iraqi dinar (1500 dinars = $ 1) developed by L. Paul Bremer III, and re-Face value: the former (1 dinar = 3.1 U.S. dollars), especially as we know that the cash reserves of strategic direct Iraqi currency had reached $ 50 billion , except the reserve is the direct and Danh in my article mentioned above.

    II – must not exceed the number of types of notes and paper-based JD seven papers, one of the categories (quarter of a dinar, half a dinar, dinars, five dinars, ten dinars, twenty-five dinars – the latter only be traded between banks only) – This rule is prevailing in the countries developed. The increase in types of Baknot lead to slouch a result of such currency and the loss of her rare and inflation. When you achieve the conditions mentioned, will increase the demand for the Iraqi dinar as the currency in foreign markets are rare and therefore its purchasing power will be enhanced.

    http://translate.google.com/translate?hl=en&sl=ar&u=http://www.sotaliraq.com/articlesiraq.php%3Fid%3D77545&ei=d-PpTNfQE8bwngehlK3mDQ&sa=X&oi=translate&ct=result&resnum=8&ved=0CGcQ7gEwBw&prev=/search%3Fq%3D%25D8%25A7%25D9%2584%25D8%25AF%25D9%258A%25D9%2586%25D8%25A7%25D8%25B1%2B%25D8%25A7%25D9%2584%25D8%25B9%25D8%25B1%25D8%25A7%25D9%2582%25D9%258A%26hl%3Den%26sa%3DX%26tbo%3D1%26tbs%3Dqdr:d%26prmd%3Divn

  7. [...] Iraqi Central Financial institution Adviser, stated the look of Mohamed Saleh said the Financial institution planned package of economic reforms, most notably the restructuring of the current forex in a move aimed at building a method of income repayments. He mentioned that the present method of dollars repayments was not commensurate with the improvement of the global monetary systems, noting the existence of a large financial circulation inside the Iraqi industry that stretched the country's economic climate. He in shape to be launched new income classes will not have an effect on the appeal of income maintained by citizen, and that the aim of generating these categories is to promote the fact of the Iraqi economic system. The Worldwide Monetary Fund demands in its assist for Iraq action of monetary reforms, like raising the zeros on the redirected regional forex credit card debt and compensation from Iraq. Video Rating: two / 5 Iraqi Central Financial institution Adviser, stated the look of Mohamed Saleh said the Financial in… [...]

  8. ameer says:

    sir,
    i want to invest in iraqi dinar…..its benefit or loss in future,which is the category of dinar i should purchase….i mean 10000 dinar, 25000, dinar etc….give me better thinking plz

  9. Liz says:

    The IQD has already had a gradual increase against the dinar…

    QUOTE FROM CBI WEBPAGE: 1950 – 1990

    In 1956 the National Bank of Iraq became the Central Bank of Iraq. Its responsibilities included the issuing and the management of currency, control over foreign exchange transactions, and the regulation and supervision of the banking system. It kept accounts for the government, and it handled government loans. Over the years, legislation has considerably enlarged the Central Bank’s authority. In 1959 the peg was switched from the British pound to the United States dollar at the rate of 1 dinar = 2.8 dollars.

    On July 14, 1964, all banks and insurance companies were nationalized, and, during the next decade, banking was consolidated. Following the devaluations of the U.S. currency in 1971 and 1973, the dinar rose to a value of US$3.3778.

    By 1987 the banking system consisted of the Central Bank, the Rafidain Bank, the Agricultural, Industrial, and Real Estate banks. A 5 percent devaluation reduced the value of the dinar to US$3.2169, the official rate which remained until the Gulf War, although in late 1989, the black market rate was reported to be 1.86 dinars for US$1.
    1990 – 2003

    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.

    http://cbi.iq/index.php?pid=History

    The old Iraqi Dinar was worth $3.20 USD before the United Nations embargo that followed Iraq’s 1990 invasion of Kuwait. By August 2002, it was trading at just below 2,000 to the USD, and by mid-April 2003, it had slipped to anywhere from 3,500 to 4,000 against the USD. As of June 2012, one USD is equivalent to 1,166 to the new Iraqi Dinar. Since its introduction in 2003 the Iraqi Dinar has increased in value by 43%.

    Anyone that purchased the NEW Iraq Dinar after it was printed, has already made a small increase… I dont think that you are going to get 1000 times richer over night… I do feel that there will be an increase over time…

  10. Liz says:

    Sorry, meant to say gradual increase against the Dollar.

  11. nathan says:

    the redenomination(removal of zeros) is to benefit the iraqi people,and should not concern us as foreign investors.within another country,it is what it is eg:25,000 iqd at say for example at a 1 to 1 ratio,would equal 25,000 dollars and so forth.


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