by Dr. John Luton
New Iraq dinar replaces old Saddam dinar:
An update on Iraqi Currency
Brief History of the Iraq Dinar – A Quick Slide Down a Slippery
More than 14 years ago, when Saddam Hussein sent his troops to
invade Kuwait, the Iraq dinar was worth about $3.20 (USD). Now,
with Saddam removed from power and forces of the U.S.-led coalition
struggling to put down insurgent movements and bring stability
to the country, the Iraq dinar is traded at the rate of approximately
of 1,462 IQD per U. S. dollar.
In other words, the new Iraq dinar is worth about .00006837 USD.
It would take almost 150,000 IQD to pay for an evening of fine
dining for a party of four (about $100). Since the highest denomination
of the Iraq dinar is the 25,000 IQD note, ( http://www.cbiraq.org/cbs5.htm)
you’d need about six of them to cover the tab. And that
wouldn’t even leave enough for a decent tip!
Fourteen years ago, you could use that same 150,000 IQD to purchase
a $50,000 dollar car, or maybe even a small house!
Currency Exchange Established: Changing
the Old Iraq Dinar into New Money!
From October 15, 2003 until January 15, 2004, a currency exchange
was established in Iraq. During that period of three months, Iraqis
were allowed to exchange the old Iraq dinar -- with Saddam Hussein’s
picture on it -- for the new Iraq dinar. Exchange was made on
a one-to-one basis, and no exchange fees were assessed by Iraq’s
The purpose of the exchange, according to the Coalition Provisional
Authority of Iraq, was to “create a single unified currency that is used
throughout all of Iraq” – one without the picture
of the former dictator on it.
What image is presently shown on the 25,000 IQD? To Saddam’s
certain dismay, there’s a Kurdish farmer on the front and
the ancient King Hammurabi on the reverse side. I think I can
hear Alanis Morissette singing, “Isn’t it Ironic?”
Prospects for the New Iraq Dinar: To Invest or not?
Since the appearance of the new Iraq dinar more than a year ago,
the currency has continued to lose ground on the world market.
While the new currency continues to trade at a high rate, prompted
by Web sales and those who auction the bills on eBay, it seems
very unlikely that the Iraq dinar will ever return to its high
mark of 14 years ago.
However, if the currency were to rise to the value of just one
penny (whereas it now takes 14.62 IQD to equal a penny), investors
could realize a considerable profit. That is, if they can sleep
at night! Money Magazine’s Ray Hammond ( http://money.cnn.com/2004/08/10/pf/expert/ask_expert/)
estimates a whopping 1,329 % return on the investment if such
a doubtful increase should occur!
Bottom line on the Iraq Dinar as a sound investment?
Don’t do it!
Why not? Well, apart from the ethical issues of profiting from
the decline of an artificially devalued currency -- which is more
than enough to give many people pause for concern -- this type
of speculation represents, at best, a reckless and risky business
Bottom Line on the Iraq Dinar
Any encouragement to invest in the Iraq dinar fails to seriously
consider the present chaotic condition of the Iraqi economy –as
well as the continuing turmoil caused by insurgent groups across
the country! While the currency may once again rise to higher
levels than its present value, the potential for significant gains
does not outweigh the risks of gambling on the short term stabilization
of the Iraqi economy.
With the present level of chaos in Iraq, and the likelihood of
the present instability to continue for the next several years,
gambling on the Iraq dinar will leaving investors holding a bag
with a gaping hole in it.
About the Author: Dr. John W. Luton
Before joining the mass communication faculty at Elizabeth City State University in North Carolina, Dr. Luton served as pastor of churches in Maryland and North Carolina for more than 20 years. He is a licensed clinical pastoral counselor with the National Christian Counselors Association and he holds the advanced certification.
Dr. Luton is also the primary author of Mastering Pastoral Counseling Utilizing Temperament, a Phase II course that is offered by the NCCA as part of its national licensure program for pastoral counselors. The course is used in many seminaries and counselor training centers throughout the nation.
For more information about the Iraq dinar, read the following
Iraqi Currency Hot on eBay – Wired.com News Online
New Iraq Dinar – Global Security.org http://www.globalsecurity.org/military/world/iraq/currency-reform.htm