A five-dinar note featuring Saddam Hussein

The Iraqi dinar (ISO 4217: IQD) is the legal currency of Iraq.

Banknotes issued prior to October 2003 show the image of Iraqi President Saddam Hussein. Following his deposition in the 2003 invasion of Iraq, the Iraqi Governing Council made public display of images of Hussein illegal. In an effort to feed the Iraqi economy, the Office for Reconstruction and Humanitarian Assistance began printing more 250-dinar notes. Saddam Hussein appeared on all post-war Iraqi dinar banknotes, aside from the reprinted "Horse herd" 25 Dinar note.

Following the 1991 war, Iraq's currency was printed both locally and in China using poor grade woodpulp paper (rather than cotton or linen) and inferior quality lithography. Counterfeited 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. In 2002 the Central Bank of Iraq issued a 10,000 Dinar banknote to be used for "larger, and inter-bank transactions". Oddly enough this "high denomination" note had an exchange value of less than 5.00 USD.

In October 2003 the United States occupation administration authorised a new banknote issue comprising of denominations of 50, 250, 1000, 5000, 10000, and 25000 Dinars. The notes were extremely similar in design and print quality to notes issued by the Iraqi Central Bank in the mid 1980s. A 500 Dinar note was issued in October 2004, and notes of 25, and 100 Dinars are anticipated. In December of 2004, the Central Bank of Iraq announced that it would issue additional coins, effective January 2, 2005, in denominations of 25, 50, and 100 dinars.

Prior to the 1991 war, the official rate of the Iraqi Dinar was approximately 3.00 USD. However, the black market rate was closer to 0.30 USD per Dinar. The currency slid during the post 1991 war United Nations embargo. The value of the Iraqi Dinar has appreciated from lows of approximately 3,000 Dinars per US Dollar to 1,460 Dinar per USD as of January 2005. At present there are many self-labelled investment brokers offering customers the chance to purchase large quantities of Iraqi currency with promises of massive capital gain. Although the Iraqi economy can only improve from its present dire state, especially given the massive debt forgiveness agreed to in principle by the Paris Club group of Iraqi creditors and other Iraqi creditors, this is unlikely to cause a dramatic short-term appreciation in the currency back to levels seen prior to the 1991 war.

See Also

• Economy of Iraq

External Link

• The New Iraqi Currency