Experts discuss fate of the Iraqi Dinar

By John Lee.

At a webinar hosted by the Iraq Britain Business Council (IBBC) yesterday, a team of experts presented and discussed their insights on the Iraqi government's recent White Paper, and on the challenges and opportunities facing the country.

On the subject of the Iraqi currency, Frank Gunter, Professor of Economics at Lehigh University, commented:

"As the international reserves of Iraq decrease ... this is going to put pressure for a depreciation or loss of value of the dinar ... and that might be a good thing.

"The dinar was deliberately appreciated, increased in value, by almost 20 percent. It has made exports from Iraq uncompetitive; it has led to a huge amount of imports into Iraq because the foreign products are so cheap.

"Maybe a possible reaction to the fiscal constraint is to devalue the dinar, so that every dollar of oil sales will buy more dinar, which will allow payment of the salaries and pensions and the infrastructure."

While agreeing that the dinar was overvalued, Hadi Al Damirji, of MIT's Sloan School of Management, urged some caution, in case a devaluation would lead to a further run on the dinar:

"I totally agree with the philosophy of keeping the dinar lower, but when is the right time to move it?"

Suggesting a conrolled devaluation, in combination with incentives to reduce public sector salary commitments, Shwan Aziz, former Chief of staff to the Iraqi Deputy Prime Minister, said:

"[We must] protect those groups that have dinars in the banks, or those contractors who have not been paid for so many years ... [but] controlled devaluation, it seems, is unavoidable."

For more information, and a link to the full discussion, please click here.

24 Responses to Experts discuss fate of the Iraqi Dinar

  1. George Horvat 26th November 2020 at 15:28 #

    Really? How is devaluing the Dinar supposed to help the average citizen of Iraq? How is making a loaf of bread more expensive a good thing to do?
    Whose kidding who here? The goal is to draw all the Dinars back out of the pockets of those who have invested in this currency, without any concern as to how it will hurt the average citizen of Iraq.

  2. Lane Mullis 26th November 2020 at 15:39 #

    I agree devaluing will just ruin the currency in the long run

  3. Ahmed Hasan 26th November 2020 at 16:22 #

    Devaluing Iraqi Dinars will be good step toward decrease the salary value that paid to government staff , we all know that during the last 15 years many people been hired by government without having any need only to get votes during election .This step is a most to make people think of private sectors , government sectors are overloaded . Young people run to get government job , if the salaries are not attractive , they will seek other options like getting small business . Big salaries create lazy society as we have now .

  4. Dinar Realist 26th November 2020 at 17:44 #

    @George: Because it's the welfare of the average citizen of Iraq that 's uppermost in your thoughts, right?

  5. Ernest Ed Mckinney 26th November 2020 at 20:43 #

    I know many people that foolishly bought Iraqi Dinar thinking it would revaluate in the future .
    At this moment its only worth a few pennies per Dinar . This move will kill any hope of recovering any of these poor peoples investment I suppose .

  6. Mike Bateman 26th November 2020 at 22:57 #

    In no way does devaluing make sense. An analogy would be an individual deep in debt intentionally taking a lesser paying job. That person, like Iraq would NEVER be able to meet financial obligations.
    Since IQD is held at a "program rate" and is listed as an exotic, non-tradeable currency, a better solution would be to remove restrictions and allow the IQD into international commerce.

  7. Michael J Bateman 26th November 2020 at 23:32 #

    Yes, yes, I get it. Let's improve the economy by devaluing the currency, giving the citizens and the government LESS buying power. This will help the economy by requiring MORE dinar into the system.
    Kind of like the famous photos of German citizens needing wheelbarrows full of money to buy a loaf of bread during the Weimar Republic.
    I'm sure that will work.

  8. Johnnyblaze 27th November 2020 at 03:49 #

    This is just people's opinions! I've been in this investment for years! The IMF MADE A AGREEMENT WITH IRAQ ALONG WITH THE WORLD BANK.... IRAQI DINAR WILL BE SET TO A $1.20 for a year (backed by a basket of currencies) then later they will return to what iraqi dinar was... $3.47! Kuwait did this in 1991 revaluation of their currency! Go look it up DUMB ASS!

  9. Steve 27th November 2020 at 04:25 #

    Why is the devaluation even an option?
    Devaluation against what, the USD?
    It's worth nothing now anyway, will devaluating it more make any difference other making basic living more expensive? This whole idea is contrary to the apparent motivation to increase the value of their currency, in country then internationally, or are all the articles about such a thing a load of rubbish, lies, lies, and more lies???? Someone is telling false information.

  10. Bentley 27th November 2020 at 07:43 #

    On the contrary, devaluing the currency for a while will be good for them. Also if it actually devalues I'm going to buy a boat load more of it.... always buy on the dip. It's just part of the strategy for their economic strength down the road. The first thing Trump said when he got in office was the value of the US dollar is too strong, i.e. it's too expensive for other countries to do business with us. His devaluing the dollar actually strengthened its usage. If Iraq devalues its currency now it in no way means it won't increase the value later. Decreasing now would actually set the stage for increased usage and increased value in the future.

  11. Dinar Realist 27th November 2020 at 09:55 #

    @Jonnyblaze: A link to something on the IMF or World Bank website confirming this would be useful. Strangely, nobody seems to be able to produce one.

  12. Larry N 27th November 2020 at 15:50 #

    Are they talking about a devaluation from pre-war rates? Or are they going to go lower than it is now.
    That really doesn’t make for a better economy which they are trying to recover from.
    Also the debt they owe would be trillions more. No sense at all. Mr Johnny B. I would say has the most sensible way to make it happen.

  13. Dinar Realist 27th November 2020 at 16:13 #

    Isn't it fascinating that people who've "invested" in the dinar think they know more about what makes sense for the Iraqi economy than the highly qualified economic experts.

    It really makes you think, doesn't it.

    Or it makes some people think, and it makes other people angry.

  14. Deborah Donnelly 27th November 2020 at 16:54 #

    I have dinar. If it doesn't revalue can we get what we paid for it 8 years ago? Thx

  15. Mohammed 28th November 2020 at 00:01 #

    You guys are dreaming. I Iraqi dinar will never become a strong again as it was in 1970or1960. I am Iraqi and next year government doesnt have money to pay for its employe. All sources going to iran and USA know that. That why when someone send money to iraq they dont give a dollar and they exchange it to dinar cause they dont want dollars goes to Iran. To sum up, there is no iraqi government, there is iranian government in Iraq

  16. Dinar Realist 28th November 2020 at 09:07 #

    @Jonnyblaze: No reply from you on my question?? Perhaps because the "agreement" you mention doesn't exist?

  17. Mike 29th November 2020 at 22:30 #

    I had better get my fortune from my 16.9 million Iraqi Dinar. I won't stand for a dirty trick to rob me and all those whom purchased Dinar with hard earned cash! I will personally destroy Iraq's oil reserves value with my energy production invention!

    Go ahead..make my day.

  18. Ahmad 30th November 2020 at 17:04 #

    With corrupted Islamic parties and dignitaries, no series step will be accepted by the huge number of government idle employees. The streets will be filled by demonstrators who shout to the week corrupted government. Iraq is full of resource but the stupid and evil politicians made things go the wrong way. Iraq needs faithful and responsible politicians to tackle the reform and get the dirt of the cheap politicians to the garbage dustpans of history where they belong.

  19. Pete Sinyard 3rd December 2020 at 16:15 #

    This is very interesting. Look forward to each report you send. As with all of those who have invested in the Dinar, yes we look forward to seeing the revalue of this currency come to fruition soon.

  20. Nik 11th December 2020 at 20:39 #

    They said devalue against the US dollar which means that the Iraqi dinar will actually be worth more. Maybe the people who are complaining should reread this and maybe try to understand what that means.

  21. Joe W Griffith 20th December 2020 at 11:43 #

    What is the real truth of the dinar, when and will it ever come back to at least 1.00, next year, a year from now, does anyone really know?

  22. Ed Mckinney 22nd December 2020 at 17:23 #

    Joe , I know a widow that has 10's of millions of pre-war Dinar that is worthless . Before her late husband died he was a victim of the Iraqi Dinar scam that so many people fell prey to. He mortgaged their home for all it was worth to buy the Dinar leaving her with absolutely nothing. I am trying to find a reliable source of information to see if there is any chance of her recovering even a fraction of his foolish investment . Can you please give me any recommendation ? What is your opinion ? Brutal honesty is appreciated . I have never been to Iraq but I spent several months in Jordan and a short time in Syria back in the 80's . It was a different world back then . I need some advice if you have the time to reply . Thanks

  23. Bentley 27th December 2020 at 10:10 #

    Iraq had a stable history until the year 1980. Before Saddam Hussein’s upset of the economy, the Iraqi Dinar had a stable exchange rate of almost $4.00 USD at its peak. Pegged to either the British Pound or the U.S. dollar, the Iraqi Dinar was completely stable before the chaos of Mr. Hussein began.
    From 1980 to 2003, Iraq was terrorized by Saddam Hussein. The citizens were horrifically abused, the economy failed and Hussein stole from the banks. Hyperinflation made the Iraqi Dinar essentially worthless. The infrastructure was demolished by war and then neglected, so the nation’s oil industry was in ruins.
    The U.S. invaded Iraq in 2003 and has only recently withdrawn most of the troops. The Iraqi political situation continues to be unstable. The Iraqi Dinar, which is worth just $0.001 U.S. now, experiences continual downward pressure because of the economic sanctions imposed on Syria and Iran. ISIS, Iran and Syria’s contributions to instability in the area are minor in comparison to the American and Russian political interference.
    The residual effects of Saddam Hussein’s horrific reign are still keeping the Iraqi Dinar’s value artificially low. Iraq is basically just an oil producing nation, even at top production. Oil is sold in U.S. dollars all around the world. The rest of the world has absolutely no need for Iraqi Dinars, only a need for Iraqi oil.
    Iraq is recovering from the reign of terror that was brought on by Saddam Hussein. The country has rebuilt some of its infrastructure to allow for an exponential growth opportunity in the oil industry. The government of Iraq has a plan to deal with ISIS to create additional financial stability for the nation. They have a plan because they intend for there to be an economic change. Now what do you suppose the "highly qualified economic experts" are saying that change will be?

  24. B rad 28th December 2020 at 22:44 #

    Here is a fact as I know to be true. In 2005 I purchased $2M verified new IQD and paid $1,200 USD total.

    As of today, I can sell those same IQD for $1,200 USD per EACH million IQD. That's 100% profit on any book. It's not really a "revalue" as much as a "reinstate".

    If indeed it goes and "reinstates" to its pre-Bush and Hussein rate (~$3.47/IQD to $1.00/USD) - instead of the war determined program rate ($.00084/IQD) - I WIN even bigger.

    Just the facts.