The future of the Iraqi currency !!

Diaa Mohsen 581 2018-11-28

Diaa Mohsen

Money, a source and document representing the state, is a symbol and expresses its political and religious system and its own philosophy. In comparison to history writing, documentation across currencies can not be questioned or challenged because it is a concrete fact and document for a certain period of time. Humanity has greatly benefited from the history of civilizations by studying their currencies and their holdings.

The discovery of currency is compared to the discovery of printing, as it facilitates the process of exchange between people and traders alike, and the currency is one of the main components of the market; without it, there can be no buying and selling.

Before the entry of the British occupation forces in October 1914 was the currency traded among the people is the Ottoman lira, after which the British occupation authorities introduced the Indian rupee as the currency of circulation, and after independence was established the first council to issue the Iraqi currency in 1931, was linked to the Iraqi dinar in pounds sterling, The July 14, 1958 Revolution The dinar was pegged to the pound and pegged to the US dollar.

The Central Bank of Iraq issued a new currency of paper and metal, bearing the slogan of the new Republic. New issues of paper currency were issued in 1971, 1973, and 1978. The Iraqi dinar suffered a continuous deterioration in its value after the Iran-Iraq war began, dropping from $ 3.3 per dinar in 1980 to about $ 4 in 1988.

As a result of the invasion of Kuwait and the issuance of resolutions of the Security Council to impose a blockade on him, and the deterioration of the value of the Iraqi dinar, forced the Central Bank of Iraq to issue currencies that were not traded before, issued banknotes of 50 and 100 dinars, followed in 1995 issued a paper of 250 dinars, The year 2000 issued a cash paper bearing the category of 10,000 dinars, and it is noted that all these categories were carrying the image of former President Saddam Hussein. The citizen carried large packages to buy his simple needs, which do not exceed eating and drinking.

After the fall of the former regime, specialists began to think about how to restore the spirit of the Iraqi dinar, and remove the heavy legacy of the Iraqi economy, they began to put the idea of ​​removing three zeros from the current currency.

The deletion of zero is defined as a process by which the nominal value of the currency is adjusted due to high inflation and devaluation. Countries such as Brazil, Argentina (South America), Yugoslavia and Poland (countries in the orbit of the Soviet Union) Ireland (for joining the European Monetary Unit), a process different from the devaluation process,
But can such action be implemented? What are the pros and cons of the economic movement in Iraq? Could it really help to reduce inflation rates? Finally, what is the right timing for it?

This process is still controversial in the government and monetary circles, businessmen and specialists. Some believe that doing such a process will lead to more corruption and tampering with public money, because of what is happening in the process of changing the currency, and it will create a state of chaos and confusion in contracts internally and externally, And that it will not change anything from the fact that the amount of the issued paper will remain the same.

At a time when an optimistic team believes that this process will lead to the restoration of prestige of the Iraqi dinar, if accompanied by the improvement of the dinar exchange rate, and the process of calculations in various fields will be less complex and simply.

We do not deny that the process of deleting zeros is a necessary and important step comes within the need for the country to the process of administrative reform of the currency contribute to reduce transaction costs and cash transactions in the economic process, and reduce the size of the country’s monetary mass and help to facilitate calculations and reduce the amplification of numbers, if applied Properly and at the right times. But there must be introductions to that process, including choosing the appropriate time in which the Iraqi economy in a state of stability, and then create the economic environment in a deliberate manner to implement the deletion, and this requires the procedures and financial and banking decisions taken by the financial authority in the country.

The process of replacing those "in the process" will cost the state budget of 172 billion dinars (150 million dollars), which is a large amount is significant, if we add the effort of the banking staff and the time that will be lost by the process of switching, and can not Forget the attempt of the weak souls who will try to profit from that process by all means and methods!

It is true that this process will not have an impact on the purchasing power of the citizen, since the exchange of currency will take place in another currency. There may be some shock in the market as a result of this switch, but it is a temporary shock. It is not bad to see the experiences of many countries replaced the currency, such as Turkey, which continued its currency exchange for four years, the Turks remained trading the old currency with the new currency until they were all withdrawn from the market without the market confused.

The most important negatives that will accompany the process of deletion of zeros is the cash illusion, as the deletion of three zeros from the Iraqi currency will sign the citizen under the illusion of cash, which is the most prominent negative that can affect the Iraqi citizen in the event of deletion of three zeroes of the current currency is a significant effect. This will be the result of colliding with the value of the new currency after the deletion, leading him to believe that the value of its assets has decreased by dividing them on the three zeros.

The Iraqi citizen would like to see his currency strong, so the process of raising zeros will contribute to the revaluation of the currency, and reduce the proportion of demand for hard currency, which is characterized by force, and will lead to a balance between the value of domestic and foreign currency and will give them market power at home and abroad, It is possible that the value of the Iraqi currency against the US dollar, for example, that the employee who receives 1200 thousand dinars at the exchange rate 1200, the purchasing power of $ 1000 dollars and if the strengthening of the dinar equivalent to 500 dinars to the dollar will be purchasing power $ 2400 instead of $ 1000.…ports%2F341343

The objections led to his postponement twice

The Central Bank reveals to the "NAS" details of the project "Structuring the currency"

Monday 19 November 2018

Baghdad – NasThe Central Bank of Iraq revealed on Monday details of the project "Structuring the currency", which aims to delete 3 zeros, to facilitate the circulation of currency."The currency structuring project, when it was first floated, faced many objections. It was postponed to be launched again in 2014 and started to be implemented," said Abdulkarim Hassan, general manager of the issue and treasury, in an interview with NAS today (November 19, 2018). A new reason to postpone it."

Hassan explained that "the draft currency structure aims to delete three zeros to turn the category of a thousand dinars to one dinar, while replacing the thousand dinars in the place of one million dinars." He pointed out that "the project allows the printing of new categories of dinar and half dinars down to deal with the bank."
He stressed that "the idea is integrated and there is a comprehensive study and the project does not need to apply," stressing that "this project must be implemented despite the obstacles that led to the postponement."

Rouhani sees Iran, Iraq expanding trade despite US sanctions

Reuters Editorial
4-5 minutes

DUBAI (Reuters) – Iran and Iraq could raise their annual bilateral trade to $20 billion from the current $12 billion, President Hassan Rouhani said on Saturday, despite concerns over the impact of renewed U.S. sanctions.

Iraq’s President Barham Salih is welcomed by Iran’s President Hassan Rouhani during his visit in Tehran, Iran, November 17, 2018. Official President website/Handout via REUTERS

Rouhani’s remarks, after a meeting with visiting Iraqi President Barham Salih, came two weeks after the United States restored sanctions targeting Iran’s oil industry as well as its banking and transportation sectors.

“… through bilateral efforts, we can raise this figure (for bilateral trade) to $20 billion in the near future,” Rouhani said in comments broadcast live on state television.

“We held talks on trade in electricity, gas, petroleum products and activities … in the field of oil exploration and extraction,” Rouhani said.

Baghdad is seeking U.S. approval to allow it to import Iranian gas for its power stations. Iraqi officials say they need more time to find an alternative source than a 45-day waiver granted to it by the United States.

“It will be important to create free trade zones at our shared border and to connect the two countries’ railways,” Salih said.

“We will not forget your support for the Iraqi people in the fight against (Iraqi dictator) Saddam (Hussein). Neither do we forget Iran’s stand in the recent fight against terrorism,” added Salih, an Iraqi Kurd.

Salih later met Iranian supreme leader Ayatollah Ali Khamenei who called for maintaining unity among ethnic and religious groups in Iraq and resisting foreign interference.

“The only way to counter plots (by Iraq’s enemies) is by strengthening the unity of all Iraqi groups, including Kurds, Arabs, Shi’ite and Sunnis,” Ayatollah Khamenei said, according to his website.

“Some governments in the region and outside of it hold a deep grudge against Islam … and Iraq, and interfere in Iraq’s internal affairs and they must be strongly resisted,” he said.

Iran accuses the United States and its regional rival Saudi Arabia of exploiting divisions among Shi’ite and Sunni Muslims. Washington and Riyadh denounce Iran as fuelling conflicts in countries including Lebanon, Syria and Yemen.

“We seek to boost cooperation (with Iran) at all levels … in order to serve the interests of both countries,” the website quoted Salih as saying.

Iran wields wide influence in Iraq, its smaller neighbour, where its Revolutionary Guards played a key role in training and arming the mainly Shi’ite militias that helped defeat Islamic State.

Iraq imports a wide range of goods from Iran, including food, agricultural products, home appliances, air conditioners and car parts. Iranian goods imports to Iraq were worth about $6 billion in the year ending March 2018, or about 15 percent of Iraq’s total imports for 2017.

Iraqi officials told Reuters last week that Iraq had agreed to sell foodstuffs in return for Iranian gas and energy supplies. Iranian trade officials denied that any food-for-gas scheme could be set up as Iran was a net exporter of food to Iraq.

“We have exported more than $6 billion to Iraq in the past seven months and we could import goods for that amount but not food items,” Yahya Al-e Eshaq, head of the Iran-Iraq chamber of commerce, was quoted as saying by the ILNA news agency.

A spokesman for an association of Iranian gas and petrochemicals exporters said Iraq wanted to pay for the gas imports in its dinar currency, the semi-official ISNA news agency reported.
Reporting by Dubai newsroom; Editing by Gareth Jones and Robin Pomeroy…-idINKCN1NM09A

Iraqi Dinar May Replace Dollar And Euro In Iran’s 2nd Largest Export Market

November 20, 2018

Amidst continuing talks between Iran and Iraq over how to settle payments for Iraq’s natural gas imports from Iran in the face of Washington sanctions, Iranian officials are mulling over Iraq’s offer to pay in Iraqi Dinars instead of the dollar or Euro, according to Iranian state media. This follows the September announcement by Iran that it planned to completely ditch the dollar as a currency used by the two countries in the trade transactions.

Iraq was among countries granted a temporary exemption as energy sanctions on its eastern neighbor and regional Shia ally took effect November 5, and since then Baghdad has pushed to process payments for gas and electricity in its own currency of dinars. Iraq is Iran’s second largest export market with a substantial portion of that trade in energy, which cannot cannot easily be structured outside the new sanctions regime.

Iraq’s President Barham Salih (L) is accompanied by his Iranian counterpart, Hassan Rouhani, to a meeting of Iran-Iraq delegations for talks in Tehran on November 17. Via

Baghdad has found itself in the delicate position as a partner of both Washington and Tehran largely reliant on the former for defense and on the latter for gas and power generation, keeping its economy afloat. Last summer a severe temporary electricity reduction fueled unrest across the south of Iraq. Chronic shortages and a failing Iraqi infrastructure means Tehran has been a key lifeline fueling Iraq’s increasingly desperate needs.

Iranian officials have also recently declared "Iraq is one of our successes" and a "strategic ally" as echoed in a weekend televised broadcast featuring the head of Iran’s Islamic Shura Council, Hossein Amirabedhaleyan. However, as the head of the Iran-Iraq Chamber of Commerce Yahya Ale-Eshagh stated before the latest round of sanctions took effect: “Resolving the banking system problem must be a priority for both Iran and Iraq, as the two countries have at least $8 billion in transactions in the worst times,” according to a September statement.

Meanwhile on Monday Iran’s leadership continued making dubious promises that energy exports will defy all expectations and thrive, with President Hassan Rouhani saying US sanctions are "part of a psychological war doomed to failure".

“We will not yield to this pressure, which is part of the psychological war launched against Iran,” Rouhani said in a speech broadcast live on state television.

They have failed to stop our oil exports. We will keep exporting it… Your regional policies have failed and you blame Iran for that failure from Afghanistan to Yemen and Syria,” he added as the crowd he addressed in the city of Khoy chanted “Death to America!”.

Noting that Washington had succumbed to granting temporary waivers to eight major buyers of Iranian oil due to economic realities, he explained: “America is isolated now. Iran is supported by many countries. Except for the Zionist regime (Israel) and some countries in the region, no other country backs America’s pressure on Iran,” according to Reuters.

Iranian officials have vowed to stick by the 2015 Iran nuclear deal in spite of Washington’s aggressive attempts to dismantle it. Foreign Ministry spokesman Bahram Qasemi expressed to reporters he is “hopeful that the Europeans can save the deal” in reference to the EU’s attempts to establish a Special Purpose Vehicle (SPV) for non-dollar trade with Iran. European and other foreign business, however, have still been leaving Iran in droves out of fear of US penalties.

“We expect EU to implement the SPV as soon as possible,” Qasemi said. “Iran adheres to its commitments as long as other signatories honor theirs.”

Reuters reported last week, based on statements from six unnamed diplomats, that the EU had sought to establish the SPV by this month but failed as no country is currently willing to host it. This gives new impetus to current negotiations between Iran and Iraq held this past weekend as the Iraqi president visited Tehran on Saturday with a delegation for a series of talks.

Iran’s Ambassador Iraj Masjedi announced over the weekend amidst the high level talks involving Iraq’s President Barham Salih: “Considering the problems that have emerged in dollar-based banking transactions, a joint proposal between Iran and Iraq is using Iraq’s dinar in trade,” according to Iranian state media. He added that an alternative plan might included using barter mechanisms to carry out imports and exports with Iraq.

Following these meetings Iranian President Hassan Rouhani indicated the two neighbors look to increase their annual trade from the current $12 billion to $20 billion.…ran-iraq-trade

Central Bank of Iraq unveils new 1000 dinar banknote featuring Assyrian star

By Rudaw October 7, 2018

The new 1000 IQD banknote featuring an Assyrian star. Photo: CBI / Rudaw

ERBIL, Kurdistan Region – The Central Bank of Iraq (CBI) has released a series of new banknote designs aimed at modernizing the currency and better reflecting the nation’s heritage and diversity.

The last significant redesign of Iraqi banknotes came after the 2003 US invasion, which saw Saddam Hussein’s face removed from the currency.

Now a new series of 25,000, 10,000, 1000, 500, 250 dinar notes is set to enter circulation from next week. The CBI says it does not plan to recall old banknotes.

As part of the redesign, the new banknotes will now feature the governor of the central bank’s printed name instead of his signature, “compatible with what is being followed in other countries”, the CBI said Sunday.

The issuing date will read 2018 AD and 1440 Hijri of the Islamic calendar.

However, it is the 1000 dinar note that seems to be getting the most significant makeover.

The symbol of the Ikhlas Surah from the Quran, which is currently featured on the 1000 IQD bill, is to be replaced with what looks like an Assyrian star.

Assyrians are a predominately Christian minority group concentrated around northern Iraq. Many of them were displaced or forced to flee abroad during the ISIS war.

The new 1000 dinar note will also feature the words: “Enlisting the marshes and heritage of Southern Iraq on world heritage list”. This is in reference to the inclusion of Iraq’s endangered marshlands on UNESCO’s list of World Heritage sites in 2016.

During Saddam’s rule, Iraq’s marshes were almost completely drained in order to flush out rebel groups.

The rich natural habitat and the culture of the marshland’s inhabitants were almost lost. International efforts have sought to bring it back to life.

Financial expert: Deleting zeros from the currency is a correct procedure .. but not at the present time

Al – Zawra Newspaper
Source: Al – Zawra Newspaper


Confirmed the financial expert Safwan Qusay Abdul Halim, on Saturday, that the current economic situation does not allow the implementation of the project to delete the zeros of the currency attributing this, the conditions of the unstable Middle East and the possibility of a local currency are illegal looking for a way to enter the system Local banker.

"The Central Bank of Iraq is trying to restore confidence in the Iraqi currency and the introduction of the international currency market and facilitate the task of calculations by deleting zeros, stressing that the current economic situation is not allowed because of the unstable conditions in the East Middle East and the possibility of illegal domestic currencies looking for a way to enter the local banking system."

He pointed out that "the project can disrupt the monetary policy and the value of the Iraqi dinar, so the procedure to delete zeros is a correct procedure, but the current government to choose the appropriate time to replace the currency and transparent and subject to the highest degrees of control."

The governor of the Central Bank Ali Alaq announced earlier the existence of a plan to delete zeros from the local currency, noting that "this plan needs to deliberate steps, so as not to be exploited in the work of fraud."

Al-Alaq said in a press statement that "currencies with small categories, may lead the citizen to bid farewell to banks in the difficulty of storage."

"The central bank has a future plan to restructure the Iraqi currency, including the deletion of zeros, but this plan needs to take deliberate steps, and a stable situation in full so as not to be exploited in the work of fraud and others."

Governor of the Central Bank of Iraq: We plan to delete zeros from the local currency

By Rodao 17/9/2018


Different categories of Iraqi currency

Roudao – Erbil

The governor of the Central Bank, Ali Alaak, on Monday, the existence of a plan to delete zeros from the local currency, noting that "this plan needs to deliberate steps, so as not to be exploited in the fraud.

Al-Alak said in a statement to the official Sabah newspaper that "currencies with small categories, may lead the citizen to bid farewell to banks in the difficulty of storage."

He added that "the central bank has a future plan to restructure the Iraqi currency, including the deletion of zeros, but this plan needs to deliberate steps, and a stable situation in order not to be exploited in the work of fraud and others."

He explained that "the Central Bank has a reserve of foreign currency very comfortable, approaching close to $ 60 billion, compared to 43 trillion dinars, which means that it covers 170 percent of the size of the mass of cash."

On the launch of the currency of the category of 100 thousand dinars, the central bank governor pointed out that "these ideas are traded by the Central Bank, but at the present time regret it."

The central bank introduced in April a project to delete three zeros from the currency, in order to confront inflation and stimulate the economy, but was forced to stop because of the deterioration of the security and political situation in the country "to prevent manipulation and fraud of weak souls."

Digital Media: Cancellation of European sanctions on the Central Bank will activate the PayPal service officially

Thursday 13 September

Alsumaria News / Baghdad

The Center for Digital Media, on Thursday, that the abolition of European sanctions on the Central Bank will lead to the activation of PayPal service officially in Iraq.

The Center said in a statement received by Alsumaria News a copy of it, "The abolition of European sanctions on the Central Bank of Iraq will make it a reliable financial institutions to deal with European institutions and thus eliminate the obstacles to activate the services of PayPal officially in Iraq."

"PayPal is considered the best and most popular bank in the world, providing users with digital financial services. Thousands of e-shops and e-commerce sites support PayPal, which was established in 1998 and supports Arab countries – Qatar, Oman, Yemen, Kuwait, Jordan, Saudi Arabia, Algeria, Egypt, Tunisia, Morocco and Somalia. "

The Central Bank of Iraq announced on Thursday that it was officially released from the list of EU sanctions, pointing out that it has become a reliable financial institutions dealing with European international institutions.…8%25A7%2Far%23

Shi’ite cleric Sadr leads in Iraq’s parliamentary election


May 14, 2018 01:59

BAGHDAD – Moqtada al-Sadr was leading in Iraq’s parliamentary election with over half of the votes counted, the electoral commission said on Sunday, pointing to a surprise comeback for the powerful Shi’ite cleric who had been sidelined by Iran-backed rivals.

Shi’ite militia leader Hadi al-Amiri’s bloc, which is backed by Tehran, was in second place, according to the count of over 95 percent of the votes cast in 10 of Iraq’s 18 provinces.

Prime Minister Haider al-Abadi appeared to be running third.
Security and commission sources had earlier said he was leading the election, which was held on Saturday and is the first since the defeat of Islamic State militants inside the country.

Turnout was 44.52 percent with 92 percent of votes counted, the Independent High Electoral Commission said – that was significantly lower than in previous elections. Full results are due to be officially announced on Monday.

Sadr and Amiri both came in first in four of the 10 provinces where votes were counted, but the cleric’s bloc won significantly more votes in the capital Baghdad, which has the highest number of seats.

The commission did not announce how many seats each bloc had gained and said it would do so on Monday after announcing the results from the remaining provinces.

Abadi, a rare ally of both the United States and Iran, came in third in six provinces but ran fifth in Baghdad.

The results unexpectedly showed former Prime Minister Nuri al-Maliki, who was touted as a serious challenger to Abadi, lagging behind.

The ranking of these blocs can still change with results yet to be announced from eight provinces, including Nineveh, which has the second-largest number of seats after Baghdad.

Abadi was viewed as a frontrunner before the election. His rivals were seen as Maliki and Amiri, both closer than Abadi to Iran, which has wide sway in Iraq as the primary Shi’ite power in the region.…lection-556317