Iraq plans currency overhaul and redenomination

Started by Bimat, June 25, 2011, 07:59:14 AM

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Iraq Said To Be Planning Currency Overhaul, Redenomination
June 24, 2011

BAGHDAD -- A senior Iraqi Central Bank adviser says the government has adopted a two-pronged plan to restructure the national currency in order to facilitate large transactions and make government accounts more efficient, RFE/RL's Radio Free Iraq (RFI) reports.

Mudhhir Muhammad Salih, a member of the bank's advisory panel, told RFI on June 23 that in the short term, larger banknote denominations of the dinar will be issued to simplify major transactions.

He said that because so many Iraqis still deal mainly in cash, it is cumbersome to carry bags full of money to pay for expensive items like cars. The inconvenience leads people making such purchases -- as well as many entrepreneurs -- to use dollars for those kinds of transactions instead of dinars, something the government wants to end.

He added that large denominations equivalent to around $100 will be issued to simplify major purchases, and new coins and lower denominations will be introduced for smaller transactions.

In the longer term, Saleh said a redenomination is needed wherein three zeros will be dropped so that the 25,000 Iraqi-dinar banknote -- currently the largest denomination -- becomes a 25-dinar note.

He said the change is inevitable, considering the economy is expecting high growth in the coming years with a planned increase in oil production to finance reconstruction projects.

Saleh said there are currently some 29 trillion dinars in circulation in Iraq, represented by some 6 trillion banknotes of various denominations, most of them quite small. He said this also causes complications for the central bank and government, as well as commercial accounting departments.

Saleh said the monetary-restructuring plan was drawn up with the help of foreign experts and financial institutions, including the International Monetary Fund (IMF), of which Iraq has been a member since 1945.

The plan will soon be presented to the cabinet, which is expected to subsequently send a bill to parliament.

Saleh noted that until 1980 the Iraqi dinar exchange rate was 1 dinar/$3.3 compared to $1/1,168 dinars now due to hyperinflation that occurred during the latter part of the late ousted leader Saddam Hussein's reign.

Source: RFERL

Image Caption: Iraq's 25,000-dinar banknotes apparently won't get you as far as they used to.

It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.


I think we have another entry for Planned Major Changes to World Circulation Sets. :) However, the article doesn't mention when and how currency reform will be done. It says "The plan will soon be presented to the cabinet, which is expected to subsequently send a bill to parliament." so it is very likely that it will be finalized by 2012..

It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.


Iraq's Central Bank plans to delete zeroes of Iraqi currency.
Friday, June 24, 2011 11:23 GMT

Iraq's Central Bank announced on Thursday that it is planning to delete the zeroes of the Iraqi currency.

This step is one of the bank's strategic missions; the Central Bank said adding that the new currency will include the Kurdish language in addition to the Arabic language.

"The zeroes that were added to the Iraqi currency previously constituted a large money supply up to 28.500 trillion Iraqi Dinar and 5 trillion banknotes", the advisor of Iraqi Central Bank governor Mothahhar Mohammed Saleh told Alsumarianews.

"The Central Bank has prepared all requirements needed to delete the zeroes of the Iraqi Currency", Saleh said.

"This step is one of the Iraqi central bank's strategic missions. The monetary policy of the bank aims to structure and reduce the currency in a country moving towards an economic phase", he added.

"The project of deleting zeroes is complete. It will be submitted to the central bank's administration in the next session. Then, it will be passed to the ministerial council before presenting it to the Parliament for vote. The mechanisms of changing the currency will be gradual. It will be preceded by awareness campaigns for citizens", the adviser of Iraqi Central Bank governor said.

"The new currency will be printed after deleting the zeroes and will include the Kurdish language in addition to the Arabic language. It will bear as well photos of Iraq's civilizations and patrimony in addition to symbols of Iraqi intellectuals and figures", Saleh noted.

On June 19, Iraq's Central Bank Governor Sanan Al Shebeibi affirmed during the meeting of independent commissions with Prime Minister Nuri Al Maliki that the bank is preparing all requirements needed to replace the Iraqi Currency.

Iraq's Central Bank has four branches including Basra, Sulaimaniah, Arbil and Mosul. It was founded as an Iraqi independent bank by virtue of Iraq's Central Bank Law issued on March 6, 2004.

The bank is responsible for the prices stability and the implementation of monetary policy including exchange rates, the management of foreign reserves, the issuance of currencies and the organization of the banking sector.

Source: Alsumaria
It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.


Iraq to remove three zeros from the dinar
Published August 4th, 2011 - 09:24 GMT

The Iraqi Central Bank announced the completion of a plan to remove three zeros from the dinar, replacing current banknotes with new ones.  The Bank will re-print 30 trillion dinars (26 billion dollars).

According to Mazhar Mohammad Saleh, an expert in the Iraqi Central Bank, in a speech with the ALHAYAT of London, "our problem lies in the timing of the currency exchange, as we need to select a suitable time for implementing the project without obstacles."

The Central Bank planned to remove three zeros from the Iraqi dinar, after suffering from inflation and the decline of the currency during the nineties, due to economic sanctions.  The value of the dinar decreased internationally to its current value of approximately 1120 dinars per dollar.

In 2003, the Central Bank adopted a new mechanism to maintain the dinar's exchange rate. It created a foreign exchange auction to sell dollars that Iraq obtained from the sale of oil in the global markets and then transferred to the bank to sell in local currency, which helped raise the value of the dinar over the last few years to more than 2000 points.

Saleh estimated the government will exchange more than 30 trillion Iraqi dinars, or more than $26 billion dollars.  The most important change after deleting the zeros, is to reduce the number of banknotes in circulation, simplifying the payment system in Iraq.

Some economists have warned that the process of exchanging the Iraqi currency will be rife with corruption due to the inaccurate structuring of Iraqi banks. Previous attempts to exchange the currency resulted in major corruption, costly to the Iraqi economy.  However, Saleh responds that the process of changing the currency in 2004, occurred under the exceptional circumstance of an occupation, was managed by a civil American governor, and was still successful.

The Central Bank sells, through a daily auction, between $150 million dollars and $190 million dollars daily to clients of private banks and the financial companies. (Source:

Source: Albawaba
It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.


Hello is their any Iraqi swappers on here who can swap me iraqi coins?


Iraq Central Bank to delete zeros soon
Saturday, September 03, 2011 12:21 GMT

The denomination of the Iraqi currency reached its final stages as the study and draft resolution reached the Cabinet after being sent by Iraq Central Bank. Iraq Central Bank said that it won't only delete the zeros but it will also change Iraq monetary structure in order to provide bigger currencies. According to this project coins will appear again in the Iraqi currency, as for the banknotes the Central Bank will recourse to international institutions to print them.

The new currency will be printed in 3 languages including the Kurdish and it will include pictures that represent the Iraqi civilization.

Since a while Central Bank tries to pass this project. The Central Bank stresses that this change will not affect the buying capacity of the Iraqi dinar and its influence is only restricted on the organizational things and it aims to decrease the huge volume of currencies in Iraq.

Source: Alsumaria
It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.


I have fair guess in that part of world Iraq , Iran keep on introducing & recalling their coins & banknotes very frequently .

Cheers ;D
Every experience, good or bad, is a priceless collector's item.


Removing zeros from Iraqi dinar to start in September

20 Feb 2012

BAGHDAD - The process of removing three zeros from the Iraqi dinar and replacing current banknotes with new ones will begin in September, announced the economic committee of the Council of Representatives as part of an agreement with the Iraqi Central Bank (ICB).

The announcement, which will see the ICB re-print 30tr dinars ($26bn), was made despite government fear over the project.

Economic committee member Abdul-Hussein Abtan said: "The agreement includes granting the process of switching currency [for a] full year where [both the] old and new currencies will be dealt in the market during this stage."

The ICB described the project as a positive move for the Iraqi economy. But particular arms of government expressed fear that the project will increase cases of money laundering and are working to convince the ICB to stop the process. The securities committee said deletion of the zeros will affect negatively financial trading in the stock market.

Abtan added however that the process "will contribute to dealing [with] inflation and facilitating economic cooperation with international banks and reducing social differences in the community."

The ICB previously said that it will consider the requirements of the project with the Council of Ministers to determine whether or not a law needs to be implemented.

The financial committee of the Council of Representatives said on Sunday that the passing of such law would allow Iraq to address economic inflation.

The move to delete the zeros will reduce the number of bank notes in circulation and simplify Iraq's payment system.

The ICB is responsible for maintaining price stability, implementing monetary policy and regulating the banking sector.

Source: Zawya
It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.


Iraq halts plans to redemoninate dinar

Iraq has decided to hold off on a plan to knock three zeros off the nominal value of bank notes of its currency because it does not believe the economic climate is suitable, the cabinet secretary said.

The central bank said last August it planned to redenominate the Iraqi dinar to simplify financial transactions in an economy that is still heavily centralised and dominated by oil, and where deals are often carried out in cash. (1000dinar is worth about NZ$1)

The proposal to restructure the dinar to bring more liquidity into the market has been awaiting parliamentary approval since last year.

Now a statement on the website of the cabinet secretary said the cabinet had decided to halt all procedures relating to the redenomination of the dinar ''until further notice''.

''The economic committee discussed this issue and so did cabinet ... There is a possibility that it could cause some problems in the economic situation. Besides that, this operation is so big that cabinet sees circumstances are not right to control this,'' cabinet secretary Ali al-Alaq told Reuters.

Iraq is slowly getting back on its feet after years of war and sanctions. Oil accounts for 95 per cent of government revenues and the country's banking system is still highly underdeveloped.

The central bank has kept the dinar fixed at 1,170 dinars to the US dollar in its daily auction but it recently moved to revalue the dinar slightly to 1,166 dinars after demand for the US currency soared.

The central bank said it also had to tighten regulations over who can participate in the auctions as Iraqi traders sought to snap up US dollars for resale in neighbouring Syria and Iran, both under Western economic sanctions.

Sales of US dollars in currency auctions held by Iraq's central bank rose as high as US$400 million on some days in December from a previous average of US$150 million, according to central bank data.

''We have more than 30 trillion dinars in circulation. To withdraw this amount from the market and then to examine them and to dispose of them is a huge process. Even the technical and the monetary capabilities to control a process like this, we consider as insufficient and it is not seen as a priority currently,'' Alaq said.

The central bank says Iraq's large foreign reserves, which have risen to a record US$60 billion on the back of high oil prices, will shield it from any damage to its financial system on the national level.

It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.


Some Iraqi economists are less than thrilled with the idea of a new currency being introduced during 2013, but if the financial committee in Iraq's Parliament has its way not only will there be new bank notes, but coins will once more be seen in circulation.

The currency reform being planned for next year will include removing three zeros from all existing currency denominations.

According to Iraq Central Bank Deputy Governor Mazhar Salih, "We are determined to change the Iraqi currency because the biggest bank note in Iraq is 25,000 dinars, which is the equivalent of $21. This has forced Iraqi merchants to resort to U.S. dollars. Besides omitting the zeros from the currency, we will redefine the Iraqi currency and have bank notes larger than 25,000."

Najiba Najib is a financial committee member. According to Najib, the new currency would circulate simultaneously with the older bank notes for three years before the notes being replaced would be demonetized.

The committee has presented proposed designs for seven bank notes ranging from 5- to 200-dinar denominations as well as coins in 50-fils to 2-dinars denominations to the central bank. Details of the proposed coins were not immediately available, but it was learned through Najib that the waterfall of Geli Eli Beg is among proposed vignettes for the new notes. It appears the proposed vignettes will attempt to appease all major ethnic groups within Iraq since three of the proposed designs have Kurdish themes. It was also learned the notes and presumably the coins will include legends in Arabic, Kurdish and English.

Kurdistan Economic Forum Vice President Faysal Ali is among those opposed to a currency reform at this time. According to Ali, "The political situation in Iraq is very unstable and it is economically weak."

Ali continued, "Therefore, it is not possible to change the currency now because in order to do so we would need more than a trillion bank notes and coins. Exchanging new bank notes with older ones being used by citizens will greatly harm the economy."

Ayub Anwar Simaqayi is a lecturer in economics at Salahaddin University in Erbil. He added, "It [Iraq] depends entirely on oil which it exports for U.S. dollars. So, if they [Iraq government] change the currency of Iraq and the price of oil goes up it will have no impact on the value of Iraqi currency. But, if the oil prices go down the currency of Iraq will lose value as well."

Following World War I, what is now Iraq was a British mandate that used the coins and bank notes of British India as its official currency. Iraqi coins in denominations of 1, 2, 4, 10, 20, 50 and 200 fils were introduced in 1931 and 1932, with a 100-fils coin being introduced in 1953.

Coins continued in use during the Iraqi Republic period, with the introduction of a new series in denominations of 1, 5, 10, 25, 50, and 100 fils. In 1970 a 250-fils coin was added to this mix. In 1982 the 500-fils and 1-dinar denominations were introduced; however, coin production ended after 1990 due to inflation.

A series of coins in denominations of 25, 50, and 100 dinars was introduced in 2004 by the Coalition Provisional Authority that replaced the dictatorial government of Saddam Hussein; however, these coins proved to be unpopular and were withdrawn.

Bank notes used during the Saddam regime are nicknamed "Swiss dinars" because they were printed in Switzerland for Iraq. When the Saddam government was cut off from its Swiss suppliers in 1991 due to an international embargo, Iraq began printing its own bank notes, known in Kurdistan as "fakes" or "prints" due to their lack of anti-counterfeiting security devices.

In 2003 the coalition governor of Iraq, Paul Bremer, following the collapse of the Saddam government, authorized new bank notes to be printed by the De La Rue security printing company. These notes are dubbed "Bremers" by Iraqi citizens. Counterfeits of the Bremer period notes have been a problem due to the interest in selling physical Iraqi dinars overseas to investors speculating on their appreciation should the Iraqi economy improve.


Source : Numismaster


Those 3 coins adted 2003 were wihdrawn ? wow that was short-lived...glad i got a specimen of each for myself


Lots of common nonsense, but Salih sort of makes the point that matters. Dollarization robs the Iraqi government of seigniorage on banknotes. I would add that inflation has come down to an acceptable level (see chart) so that it makes sense to push dollars out of circulation now and chop off some useless zeroes from prices. At the same time, the country seems to be plagued by fake banknotes. A new series would have the potential to fix that. Three years to exchange old for new notes may be a bit long, but in view of Iraq's situation, necessary.

Anyone who believes that the cost of the exchange should not be weighed against the benefits or that M1 has anything to do with the price of oil should not be called an economist. As for the retail investors who thought they could speculate with Iraqi banknotes (I remember the breathless hype at the time, mainly aimed at the US sucker market), theirs is a cautionary tale.

An unidentified coin is a piece of metal. An identified coin is a piece of history.


Knocking off zeros is not always a good idea ... there are quite a few countries that tried to do this and ended up more worse ... a large number is a physcological barrier to an extent ... so to that extent it slows down the devaluation ... however bringing it back to a smaller number, the chances are very soon this will devaluate further ...

This is one of the reasons that Indonesia has not gone for new notes, there exchange is in the range of 1USD = 10,000 IDR ...
yes its idotic to pay a taxi 100,000 or get a decent breakfast for that kind of money :)

For collectors its always good, one gets to collect more variety ...

BTW I think I am struck with old Dinar of Saddam' regime ... the condition is not so great, else would have made a fortune by selling them ...
A guide on Republic India Coins & Currencies


None of the Saddam era currencies (coins/banknotes) are worth making fortune, even in high grades..

There's a particular US based seller who is probably still selling Iraqi banknotes for hundreds and thousands of dollars claiming that it's going to be world's second highest traded and most valuable currecny after USD..And several people actually paid that much amount for so called good investment... ::)

It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.


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