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Iraq currency (Iraqi Dinar, IQD) in forex

Note 1 - Prior to World War I, Turkish then known as Ottoman currency was used throughout the area known as Mesopotamia, despite the fact that other currencies were were used in certain regions; For example the Indian rupee was used in Basra and Persian coins were used in the middle Tigris towns and Kurdistan. Ottoman paper money began to circulate at a discount rate against gold once the War began, in Mesopotamia and elsewhere. The Proclamation No.1 of 22 December 1916 banned the use of Ottoman paper money in Mesopotamia allowing the Indian Rupee had become the universal currency of Iraq by 1918. The Rupee maintained this status when Iraq became part of the British Mandate following the war.

In spite of the overall acceptance of the Indian Rupee in Iraq, there maintained a nationalist hope for Iraq to establish its own currency. In 1926, shortly following a mission by Sir E. Hilton Young to Iraq in 1925, The British finally suggested a Currency Borad based in London which would act as an authority that could issue an official Iraqi currency in 1926. This proposal however was emphatically rejected by Iraqis due to the fact that the currency authority would not be located in Iraq. One year later, Iraq decided to legislate a National Bank. Wide debate over the basis on which the currency would be issued fathered the idea.

New legislation, deemed the new currency unit as the Iraqi Dinar (I.D.), which consisted of 1000 Fils. The Iraqi Dinar was supposed to be linked to the gold standard and distributed by an independent authority that was based in London.

The Iraq Currency Board, known as the new authority, was proposed to be represented in Iraq by a 'Currency Officer'. The Iraqi Dinar, legislated to be introduced under Law No. 44 was originally scheduled to be released on January 1 1932, however, several amendments to the original law ended up postponing the final release date to April 1 1932. During the period preceding the introduction of the Dinar, Iraq was advised to drop the gold standard just as it had previously been dropped by Britain in September 1931. The Iraqi Dinar was then linked to the pound sterrling rather than the gold standard under Law No. 44 which was amended, by 1931's Law No. 101 (passed on 12 December 1931), The bank notes were issued by the Currency Board in denominations of ?, ?, 1, 5, 10 and 100 dinars in accordance with article 10 of Law No. 44 introduced in 1931. These notes were meant to be issued by the Currency Board, for the Government of Iraq, until a National Bank could be established to issue currency.

Note 2 - CURRENCY: The New Iraqi Dinar goes by the ISO symbol 'NID', formerly known as IQD prior to January 22, 2004. On July 1, 2004, the Iraqi dinar had an exchange value of 1456 IQD to the US-dollar ('USD'). Since January 2004, Iraq has used a new unified Iraqi Dinar with a high value of 1,000 NID to the USD. Before the unification of currency, Iraq had two Dinars in circulation. One known as the 'Swiss Dinar' (printed in Switzerland) was perceived to be the stronger currency and was used in the largely autonomous Kurdish north. The other currency known as the 'Saddam Dinar' was circulating in the rest of the country. On October 15, 2003, the New Iraqi Dinar was launched with a 3-month period to trade the old Dinar currency notes which expired on January 15, 2004 to the NID. The New Iraqi Dinar has appreciated by approximately 25 percent to the USD since its inception in October 2003. During the 3 month window before it expired, The Swiss printed dinar was converted at a rate of 150 to the USD. It should also be noted that there are no plans to fix the NID to the USD.

Note 3 - BANKING SYSTEM: Iraqi citizens are currently able to bring any amount of any foreign currency into Iraq. Since foreign banks have been authorized to operate and invest in Iraqi banks with up to 100 percent ownership, Iraqi banks equally have the authority to lend hard currency with foreign banks. Despite this fact, most Iraqi assets are still frozen overseas. Although The Central Bank of Iraq (CBI) is still somewhat modern in that it was established only in 1947, it is presently being reorganized to reflect a more up-to-date Western monetary system incuding management of the currency, holding of foreign exchange reserves, liberalizing of interest rates, price stability, etc.

Iraq's banking system currently remains for the most part on a cash basis meaning there is practically no electronic banking including ATM's and credit cards, etc. Under the regime of Mr. Hussein, most Iraqis Kept dinars under their mattress rather than depositing them at state banks. The current banking system consists of 17 private banks, and 6 state-owned banks that are considered insolvent plus banking licenses which were granted to the United Kingdom's HSBC & Standard Chartered and the National Bank of Kuwait. None of these 3 banks have yet to open up branch offices in Iraq.