Conflict Currency: Fear That New 50,000 Dinar Notes Will Hurt Low Income Iraqis
Iraq’s Central Bank has issued new 50,000 dinar notes. But it could have a particularly negative impact on low income earners, simply because of Iraqi consumers’ “moodiness”, say economists.
In Iraq it is not unusual to see locals carrying around large bundles of cash. The way the Iraqi dinar has devalued over the years means that people regularly receive envelopes full of paper money; when very large sales are made, the US dollar is used rather than the dinar.
Recently the Iraqi Central Bank released a new banknote, the IQD50,000 note (worth around US$46). The announcement about the bank note had been made in November last year and the new note was released in small amounts in early January. More bank notes will be released over the next few months. Previous to this the IQD25,000 note was the highest denomination.
For people like Mohammed Mahmoud, the new bank note is a boon. He is a well paid employee of the Iraqi government and the new bank note makes it easier for him to carry his salary around.
“Previously I used to hide my salary in black bags because I used to get a lot of paper money,” Mahmoud told NIQASH. “Carrying five and ten thousand dinar notes was dangerous because any passerby could see me carrying a lot of money around, every time I got paid and went from my office to my car.”