The Iraqi currency is known as the dinar. Dinar coins are currently available in denominations of :
Dinar banknotes are currently available in denominations of :
Origins of the Term “Dinar”
The word “dinar” is believed to derive from the Latin word “denari.” The denarius was a coin currency used during the Ancient Roman Empire. The plural of “denarius” is “denari.” The term “dinar” thus entered Arabic through Latin, making a pit stop in Greek. The Muslim world of the Byzantine Empire issued currency called a “dinar.” Because of its imperial past, the dinar is the name of the currency used in a number of countries today.
History of Valuation
Thus, when the British Mandate ruling Iraq formally ended in 1932, British authorities reached back into local history to name the new Iraqi currency. Before the Iraqi dinar, the British authorities used the Indian rupee, from one of its other colonies, as the local currency. When the dinar made its initial appearance, it was worth around 13.5 rupees. Officially, the Iraqi dinar was pegged to the British pound sterling and was worth around $4.86. Due to its connection to the pound, the dinar held this value until 1949.
In 1949, the Iraqi currency was finally devalued. Once devalued, its exchange rate for one dinar against the U.S. dollar was $2.80. However, the dinar was still officially linked to the British pound until 1959, when modern Iraq first became an independent nation. Instead, the dinar became linked to the U.S. dollar. Even so, it still held equal to a single British pound until 1967. The British pound was devalued in 1967, so the dinar gained in value against the pound. However, the dinar remained valued at $2.80.
The world currency market went through major upheavals in 1971, which separated the dinar from the U.S. dollar. The U.S. dollar lost around five percent of its value, while the value of the dinar remained steady. Thus, the dinar was now valued somewhere between $3.20 – $3.40 by 1973.
The dinar held at this rate through the start of the Iran-Iraq War in 1980. Due to the war, it started to lose value and by 1982 was worth roughly $3.22. Increasing debt and inflation, by 1985 inflation was fluctuating between 25 and 50 percent, depressed the dinar. It’s estimated that the actual value, in terms of real purchasing power, of the dinar from 1986 through 2003 was as low as 33 U.S. cents to $1.32.
The 1991 Gulf War created a major disruption to Iraq’s currency system. Dinar banknotes printed before the war became known as Swiss dinars because they were printed using high quality Swiss plates and methods. They fell out of circulation except in semi-autonomous northern, Kurdish region. In the rest of Iraq that was still controlled by Saddam Hussein, the Central Bank of Iraq began massive printing of high volumes of more cheaply produced dinar banknotes. The value of this new dinar plummeted, needing around 3000 dinars to equal one U.S. dollar.
Resolving Competing Dinars
After the fall of Saddam, Iraq needed to reconcile the Swiss dinar with the Saddam dinar to create a single Iraqi dinar. The Coalition Provisional Authority issued new dinar coins and banknotes. These traded one for one with the Saddam dinars and at 150 new dinars for a single Swiss dinar.