The original dinar was first issued in 1923 as a replacement for the Indian rupee, the previous official currency under British occupation. The value of the dinar was pegged to the value of the British pound until 1959, when the Central Bank of Iraq began pegging the value to the United States dollar. The dinar destabilized after the first Gulf War in 1991, and completely collapsed after the invasion of 2003.
On October 15, 2003, the Coalition Provisional Authority began issuing the new dinar currency, in the form of banknotes and coins. Due to instability, there is no international exchange rate, and international banks do not trade the Iraqi dinar. The value is set by the International Monetary Fund at 1,170 dinars per U.S. dollar.
Coins were introduced at values of 25, 50 and 100 dinars in 2003 and 2004. Because of inflation, these coins quickly became useless and are no longer in circulation.
Dinars are issued as paper banknotes in denominations of 50 dinars, 250 dinars, 500 dinars, 1,000 dinars, 5,000 dinars, 10,000 dinars and 25,000 dinars.
As the Iraqi economy stabilizes, the Central Bank of Iraq has indicated that it will eventually revalue the dinar as a prelude to trading on international exchanges. It is likely that the revaluation will be make 1,000 current dinars equal 1 new dinar.
Article Written By Timothy Aldinger
Timothy Aldinger brings 20 years of experience as an instructional design consultant and corporate training strategist in the automotive, environmental, health and insurance industries. His professional writings have been published by Ford Motor Company, Chrysler Corporation, General Motors, Volkswagen, Toyota, Nissan and many other major corporations. Aldinger received his Bachelor of Arts in political theory from Michigan State University.