A Brief History of the Dinar

The monetary system of Iraq has experienced a storied history steeped in political intrigue and imperialist molding. For some time during the first World War, British forces occupied the country and forced the Indian Rupee onto Iraq. Since being left to its own devices following that war, the country has used the Iraqi dinar.

The dinar trade, regulated by the National Bank of Iraq from 1947 until 1954 when the Central Bank of Iraq took over, has grown and changed since it took over from the rupee in the middle of the twentieth century. For example twenty five dinar notes bearing former Iraqi president Saddam Hussein were printed in 1986, and in the years between 1991 to 2003.

In 1991, the dinar currency value plummeted along with the quality of the material used to make the notes. The Iraqi government began outsourcing minting to mills in China that used a poor quality press and inferior pulp instead of the cotton that was previously used. With the collapse of the dinar, inflation shot up and more dinar was worth an ever decreasing amount. Despite this however the largest note printed until 2002 was two hundred fifty dinars. Finally, in 2002, the Central Bank of Iraq printed the ten thousand dinar note in order to facilitate international trade, and large transactions between banks.

With the eruption of the nine year war in Iraq launched by the United States in 2003, the Iraqi dinar has enjoyed increased importance on the international scale with the exchange of dinars to dollars taking place regularly as Department of Defense employed private contractors flooded into the country to help rebuild its infrastructure. As this source of foreign investment continues in the region, so too will dinar trade value fluctuate. The one thing that seems as though it will remain a constant for some time to come is the importance of the currency in the region and to the US government. More info like this.