Thursday, September 01, 2005

Iraqi Dinar by MainEarth

Today another good info article:

The Old Iraqi dinar

Banknotes issued between 1990 and October 2003, along with a 25 dinar note issed in 1986, bear an idealized engraving of former Iraqi President Saddam Hussein. Following the 1991 Gulf War, Iraq's currency was printed both locally and in China using poor grade woodpulp paper (rather than cotton or linen) and inferior quality lithography (some notes were reputedly printed on presses designed for printing newspapers). Counterfeited banknotes often appeared to be of better quality than real notes.

Despite the collapse in the value of the Iraqi dinar, the highest denomination printed until 2002 was 250 Dinars. In 2002 the Central Bank of Iraq issued a 10,000 Dinar banknote to be used for "larger, and inter-bank transactions". This note was rarely accepted in practice due to fears of looting and counterfeiting, forcing people to carry around stacks of 250 dinar notes.

The other, smaller bills were so worthless that they largely fell into disuse. This situation meant that Iraq, for the most part, had only one denomination of banknote in wide circulation.

Currency printed before the Gulf War became known as the "Swiss dinar" and after a change over period the government disendorsed the old currency. However the old currency still circulated in the Kurdish regions of Iraq until it was replaced with the new dinar after the second Gulf War. During this time the Swiss Dinar retained its value, whilst the new currency consistently lost value (sometimes at 30% per annum).

The Swiss dinar gets its name from the fact that the printing process relied on Swiss technology that was not available after the economic sanctions following the first Gulf War.

Go here for the rest of the article.


Marcel Heersema
Iraqi Dinar Opportunity


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