BANKNOTES OF IRAQ
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Date	Pick#	Denomination	Observations	Obverse	Reverse
2003	90	50 Dinars
2003	91	250 Dinars
2003	92	1000 Dinars
2003	93	5000 Dinars
2003	94	10,000 Dinars
2003	95	25,000 Dinars
2004	NEW	500 Dinars

History of the Iraqi Dinar
The Iraqi dinar was introduced into circulation in 1931, replacing the Indian rupee, which had been the official currency since the British occupation of the country in World War I, at a rate of 1 dinar = 13 1/3 rupees. The dinar was pegged at par with the British pound until 1959 when, without changing its value, the peg was switched to the U.S. dollar at the rate of 1 dinar = 2.8 dollars. By not following the devaluations of the U.S. currency in 1971 and 1973, the dinar rose to a value of US$3.3778, before a 5% devaluation reduced the value of the dinar to US$3.2169, a rate which remained until the Gulf War. Although in late 1989, the black market rate was reported as being five to six times higher than the official rate.

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 banknote 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 was quickly devalued, and in late 1995, US$1 equaled around 3000 dinars.

Following the deposition of Saddam Hussein in the 2003 invasion of Iraq, the Iraqi Governing Council and the Office for Reconstruction and Humanitarian Assistance began printing more Saddam dinar notes as a stopgap measure to maintain the money supply until new currency could be introduced.

Between October 15, 2003 and January 15, 2004, the Coalition Provisional Authority issued new Iraqi dinar coins and banknotes. The new Iraqi banknotes are printed by the British banknote printerThomas De La Rue using modern anti-forgery techniques. Old banknotes were exchanged for new at a one-to-one rate, except for the Swiss dinars, which were exchanged at a rate of 150 new dinars for one Swiss dinar.

Although the value of the dinar appreciated following the introduction of the new banknotes from 4000 dinars per U.S. dollar, at the time of their introduction, to a high of 980 dinars per dollar, it is now held at a "program" exchange rate, as specified by the International Monetary Fund of 1449 dinars per US dollar at the Central Bank of Iraq. However, there is not yet a set international exchange rate and so international banks do not yet exchange Iraqi dinar. The exchange rate available on the streets of Iraq is currently around 1500 dinars per US dollar.

Banknotes
In 1931, banknotes were issued by the government of Iraq in denominations of ¼, ½, 1, 5, 10 and 100 dinar. The banknotes were printed in England. From 1931 to 1947, the banknotes were issued by the Iraqi currency board for the government of Iraq and banknotes were convertible into pound sterling. From 1947, the banknotes were issued by the National Bank of Iraq, then after 1954 by the Central Bank of Iraq.

100 dinars notes ceased production in the 1940s but otherwise, the same denominations were issued until 1978, when 25 dinars notes were introduced. In 1991, 50 and 100 dinars were introduced, followed by 250 dinars notes in 1995 and 10,000 dinars notes in 2002.

Banknotes issued between 1990 and October 2003, along with a 25-dinars note issued in 1986, bear an idealized engraving of former Iraqi President Saddam Hussein. Following the 1991 Gulf War, Iraq's currency was printed both locally and in China, using poor grade wood pulp paper (rather than cotton or linen) and inferior quality lithography (some notes were reputedly printed on presses designed for printing newspapers).

Counterfeited banknotes often appeared to be of better quality than real notes. 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-dinars banknote to be used for "larger, and inter-bank transactions". This note was rarely accepted in practice due to fears of looting and counterfeiting. This forced people to carry around stacks of 250-dinars notes for everyday use. The other, smaller bills were so worthless that they largely fell into disuse. This situation meant that Iraq, for the most part, had only one denomination of banknote in wide circulation.

Currency printed before the Gulf War was often called the Swiss dinar. It got its name from the Swiss printing technology that produced banknotes of a considerably higher quality than those later produced under the economic sanctions that were imposed after the first Gulf War. After a change-over period, this currency was disendorsed by the Iraqi government. However, this old currency still circulated in the Kurdish regions of Iraq until it was replaced with the new dinar after the second Gulf War. During this time the Swiss dinar retained its value, whilst the new currency consistently lost value (sometimes at 30% per annum).

In 2003, new banknotes were issued consisting of six denominations: 50, 250, 1000, 5000, 10,000, and 25,000 dinar. The notes were similar in design to notes issued by the Central Bank of Iraq in the 1970s and 1980s. A 500 dinars note was issued a year later, in October 2004. In the Kurdish regions of Iraq, the 50 dinar note is not in circulation. All prices are rounded to the nearest 250 dinar.

Coins
Iraqi coins were introduced in 1931 and 1932 in denominations of 1, 2, 4, 10, 20, 50 and 200 fils, with the 200 fils known as a rial. The 20, 50 and 200 fils were minted in silver. In 1953, silver 100 fils coins were introduced.

Following the establishment of the Iraqi Republic, a new series of coins was introduced in denominations of 1, 5, 10, 25, 50 and 100 fils, with the 25, 50 and 100 fils in silver until 1969. In 1970, 250 fils pieces were introduced, followed by 500 fils and 1 dinar coins in 1982. Coin production ceased after 1990.

In 2004, new 25 and 100 dinars coins were introduced by the Coalition Provisional Authority.

Speculation on the new Iraqi dinar
Immediately after the issue of the new Iraqi notes, many schemes appeared promoting speculation in the new Iraqi dinar. These sites advertise heavily on websites and in magazines, selling the new Iraqi currency at a huge mark up. The websites promise profits of up to 1000%, but in fact no currency in history has ever appreciated 1000% against the United States dollar and a currency swing that severe would have negative consequences for Iraq's economy. Investment experts strongly oppose speculation in the Iraqi dinar.

Related Currencies
Indian Rupee: Prior to 1931 Iraq used the Indian rupee as its currency.
► Banknotes of India

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Page created:     21 March 2007
Last Update:      21 March 2007

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