An Overview on Iraqi Dinar Historical Exchange Rate

An Overview on Iraqi Dinar Historical Exchange Rate

Iraq’s official currency since 1932 to today is the dinar. Since its creation, the currency has remained significantly stable until in the years towards 1990 and the gulf war, when it began to register substantial losses. Today, the Iraqi dinar is being presented as an attractive investment opportunity, with the country’s economy being in a steady recovery mode.

The Iraqi dinar traces its roots back to 1932 at the end of the British authority when it replaced the Indian currency rupee. The dinar was coupled with the British pound during its first 17 years of use. The exchange rate during that time bordered on 4.86 US dollars for every single dinar. However, the currency’s value was readjusted downwards to 2.80 US dollars in 1949. The Iraqi dinar exchange rate steadied till 1971.

The Iraqi Dinar after Independence

The Iraqi dinar acquired a life of its own when it finally broke free from the British pound in 1959, after the country gained independence. But its value remained pretty much the same as the British pound, until the latter was devalued in 1967. The currency steadied at an exchange rate of $2.80 for every unit until 1971 when the US dollar lost value.

The Iraqi dinar soared and in 1973 the official exchange rate for the currency stood at US$3.93. It maintained some level of stability until 1978, when the official trade rate was down to US$3.22 for every dinar. Yet, as per black market rates, the currency was reported to have depreciated to trade at 1.86 units for every 1 US dollar.

War dynamics at play

Prior to the events that happened in 1991 going forward, the official exchange rate for the currency was around $3 for every Iraqi dinar. But things changed after the US army marched into Iraq in reaction to the country’s aggression in Kuwait. The country’s economy caved in under the weight of the brief war and economic sanctions that ensued. As a result of the war, the Swiss note printing technology and the country resorted to production of low quality notes.

There was also excessive printing of the Iraqi dinar, which resulted in inflation, hurting the currency’s value substantially. The currency’s exchange value was down to 3,000 units for one US dollar following inflation, by 1995.

The second US invasion of Iraq in 2003 also left a mark in the country’s economy, with the ouster of the then Iraqi president Saddam Hussein is bringing about the interruption of the currency’s supply. The Iraqi governing council and other government authorities authorized the printing of more Saddam dinar notes to temporarily check the shortfall as the country awaited the introduction of a new currency.

This article An Overview on IraqiDinar Historical Exchange Rate was originally published at DinarInsider.com