The Iraq Dinar From Wikipedia

Iraqi dinar

History

The Dinar was introduced into circulation in 1932, by replacing the Indian Rupee, which had been the official currency since the British occupation of the country in World War I, at a rate of 1 Dinar = 11 rupees. The Dinar was pegged at par with the British Pound until 1959 when, without changing its value, the peg was switched to the United States dollar at the rate of 1 Dinar = 2.8 dollars. By not following the devaluations of the U.S. currency in 1971 and 1973, the Dinar rose to a value of US$3.3778, before a 5 percent devaluation reduced the value of the Dinar to US$3.2169, a rate which remained until the Gulf War, although in late 1989, the black market rate was reported at five to six times higher (3 Dinars for US$1) than the official rate.^[2]
After the Gulf War in 1991, due to UN sanctions, the previously used Swiss printing method was no longer available. New, inferior quality notes issue were produced. The previous issue became known as the Swiss dinar and continued to circulate in the Kurdish region of Iraq. Due to sanctions placed on Iraq by the United States and the international community along with excessive government printing, the new dinar notes devalued quickly. By late 1995, US$1 was valued at 3,000 dinars.
Following the deposition of Saddam Hussein in the 2003 invasion of Iraq, the Iraqi Governing Council and the Office for Reconstruction and Humanitarian Assistance began printing more Saddam dinar notes as a stopgap measure to maintain the money supply until new currency could be introduced.
Between October 15, 2003, and January 15, 2004, the Coalition Provisional Authority issued new Iraqi dinar coins and notes, with the notes printed by De La Rue using modern anti-forgery techniques to "create a single unified currency that is used throughout all of Iraq and will also make money more convenient to use in people’s everyday lives".^[3] Old banknotes were exchanged for new at a one-to-one rate, except for the Swiss dinars, which were exchanged at a rate of 150 new dinars for one Swiss dinar.

Since Iraq has few exports other than oil, which is sold in dollars, there is little demand for Dinars and they remain in "exotic" status. However the new currency has sparked a multi-million dollar industry in selling dinars to speculators. These so-called "money service" companies will sell Dinar to speculators at an inflated price and push the idea that the dinar will "RV" or be revalued to greatly increase the exchange rate against the dollar. The Dinar is currently pegged to the dollar at a rate of 1166/1164 (sell/buy) dinars per dollar as can be seen on the Central Bank Of Iraq's home page. The exchange rate reportedly available on the streets of Iraq is around 1,200 dinars per U.S. dollar.
There is considerable confusion (perhaps intentional on the part of Dinar sellers) around the role of the International Monetary Fund in Iraq. The IMF as part of the rebuilding of Iraq is monitoring their finances and for this purpose uses a single rate (not a sell/buy) of 1170 dinars per dollar. This "program rate"^[4] is used for calculations in the IMF monitoring program and is not a rate imposed on Iraq by the IMF. For a wider history surrounding currency in the region, see British currency in the Middle East.

Speculation

On May 3, 2007, the IMF released a statement in relation to the international compact with Iraq, which has turned the tide in regards to speculation on the Iraq dinar. The contents of the article discuss changes made in Iraq on the economic front of how the Iraq government had eliminated fuel subsidies. The article also stated that the Central Bank of Iraq had raised interest rates in an attempt to allow a gradual appreciation of the dinar in an attempt to fight dollarization of the Iraq economy. Although there are claims of widespread optimism of some language used later in the press release among some dinar speculators, there have been no publicly released statements or analysis by any news sources or governments.^[5]
In response to the growing concerns with fraud and scams related to investment in the Iraqi Dinar, State agencies such as Washington state,^[6] Utah,^[7] Oklahoma,^[8] Alabama^[9] and others have issued statements and releases warning potential investors. Further alerts have been issued by news agencies.^[10]

The Better Business Bureau has included Dinar Investments in its list of top 10 scams.^[11] There has also been a book written on the subject.^[12]

These alerts warn potential investors that there is no place outside of Iraq to exchange their Dinar, that they are typically sold by dealers at inflated prices and that there is little to substantiate the claims of significant appreciation of their investment due to revaluation of the currency.

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https://en.wikipedia.org/wiki/Iraqi_dinar