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Currencies are a fascinating piece of human history. They are also a very interesting and lucrative investment – if you invest or trade with the right currency. As someone who is interested in exotic currencies, you might have come across currencies that have been in the spotlight for years – such as the Iraqi dinar.
Even if you don’t have any deeper knowledge about this currency, worry not. Since here, we are going to uncover some important information on the Iraqi dinar in a simple yet explanatory way so that you too can understand why investors find this particular currency so captivating.
History of the Iraqi dinar
The first time that the Iraqi dinar was put into circulation was in the year 1932. It was put into place as a currency to replace the Indian rupee, which was the currency of Iraq ever since World War I. Since the Indian rupee was tied to the British pound, when instated as its replacement currency-wise, the Iraqi dinar remained tied to the British pound until 1959.
After that, it was tied to the United States dollar. One Iraqi dinar equated to 2.80 dollars. However, as Iraq became a subject of UN sanctions, their previous printing method (which is called the Swiss printing method) had become unavailable for Iraq. This prompted the creation of new banknotes that were lower in quality.
The Period of Inflation
The older notes are known as the Swiss dinar and continued to be used in a part of Iraq. The UN sanctions drove the government to excessively print banknotes, which greatly devalued the new Iraqi dinar notes. By the year 1995, three thousand Iraqi dinars would equate to one US. dollar.
Later on, in 2003. the government started printing new notes that were higher in quality. This was done so that the whole country could use a single currency. Old notes were replaced with new notes, although Swiss notes were replaced at a much higher rate. One Swiss note was replaced for 150 new notes. During the same year, the Iraqi dinar was an absolute hit on eBay as it was considered the ultimate collector’s piece.
Even from this, we can deduct that the Swiss notes were considered of higher value than the new banknotes because of the quality of the note. Due to the overproduction of banknotes, as well as the hyperinflation that Iraq faced, the notes that are in circulation now are notes of 250, 1000, 5000, 10000, 25000, and 50000 Iraqi dinars. The currency code for the Iraqi dinar is IQD.
The Current Situation with the Iraqi Dinar
In August of this year, a member of the Iraqi parliament announced that there will be a fixed dinar to the dollar exchange rate for the next five years. Iraq’s minister of finance said that they are working towards creating a new financial balance, although, Iraqi people have voiced disagreement with this choice.
Due to the devaluation of the Iraqi dinar in the past two decades, poverty indicators for the country rose significantly, since the country still heavily relies on revenue received from oil. However, what does this mean for investors and collectors of exotic currency? Essentially, this doesn’t change the demand for the Iraqi dinar that much.
This currency is still highly sought after and, sadly, the subject of many currency scams. With its fascinating history, it’s a currency that is often talked about even today. Apart from its history as one of the reasons why investors find it so appealing, people are often in rush to make this banknote a part of their collection due to the imagery depictions on the notes.
Beautiful Collectors Note, Scam, or Brilliant Investment?
Due to the wars and civil unrest that Iraq has been through as a country, its currency has been a topic of interest amongst many investors, collectors, and banks. The country has been considered economically and politically destabilized for years now. Improvement goes slow but tying the dinar to the dollar to create financial balance is definitely a step in the right direction.
To some, the Iraqi dinar is nothing more than a beautiful collector’s item, packed with a rich history of trials and defeats. The banknotes depicting Iraq’s former president tend to be one of the most popular and most valuable notes when it comes to the Iraqi dinar. If you manage to find notes that have never circulated, it will feel like you struck exotic currency gold.
Since the Iraqi government is working on creating a financial balance and bring their economy back to life, investors are taking more interest in buying this currency. However, the ordinary investor might run into some issues when wanting to acquire this currency due to all the scams that exist revolving around this currency.
Scam Red Flags
If you are someone who wants to buy or invest in the Iraqi dinar, let’s go over some tips so that you can stay safe from any potential scams. If an individual is offering you this currency instead of an established financial firm or known brokers, they are most likely trying to scam you.
Every investment has its risk factors, but if a marketer or individual is promising great returns on this currency, the best advice is to assume that it’s a scam. Even with the current happenings in Iraq taking a step towards greater economic balance, this is not something that anyone can or should guarantee.
For example, the Iraqi Dinar scam is when someone tells you to buy thousands of Iraqi dinars (since the exchange rate is $1 = ~1450 IQD) and promises you that you will make a great profit once the exchange rate gets better. The Iraqi dinar doesn’t have an active market and currencies like this have a high potential of getting redenominated.
If the currency gets redenominated, you are essentially left with thousands of notes with virtually no value. Although it could be an interesting collector’s item, it won’t bring you the profit that you were looking for when investing. Counterfeit Iraqi dinar scams were also very popular; although, with the right knowledge or tools, this can be easily avoided.
Finally – Where Should You Buy Iraqi Dinar?
If you are a serious collector or investor, there are ways to ensure that you are not dealing with a counterfeit Iraqi dinar. Another thing to be aware of is that the Iraqi dinar isn’t an easy currency to come across. If you are buying this currency online, which is how most currency collectors and investors buy it, it might be best if you bought it from an online outlet that ships to your door with full insurance.
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