Formerly known as the 'Cradle of Civilization' and Mesopotamia, Iraq has been home to dozens of societies since the sixth millennium B. C. Following World War I, when Iraq became a protectorate of Great Britain, the coin of the realm was the Indian rupee. In 1932, the Kingdom of Iraq achieved independence from the British and the new Iraqi dinar (IQD) was used instead of the rupee. During this period, people paid 11 rupees for purchase Iraqi dinar.
Initially, the new currency was pegged to the British pound. Pegging a currency is a means of stabilizing it by fixing it to that of another country. In 1959, the peg was switched to the US Dollar at a rate of 1 IQD to 2.8 US Dollars. The actual physical notes were printed in the United Kingdom, although the plates were manufactured in Switzerland. This is one explanation of how the currency acquired the adjective 'Swiss dinars.' Another possible explanation is that, at the time, Iraq had a low rate of inflation, as did Switzerland.
In the wake of the Gulf War in 1991, the United Nations imposed various sanctions on Iraq. The import of the Swiss dinar into the country became illegal. Vast numbers of poor quality Saddam notes were printed. The Kurds in northern Iraq continued to accept the Swiss notes as legal tender. Unfortunately, the Kurds did not have access to the Swiss plates and so they could print no new notes. As they refused to accept the Saddam notes as legal tender, 'their' currency appreciated compared to the Saddam notes.
It must certainly have been irritating to the Kurdish population in northern Iraq not to have the ability to print its own currency, it turned out to be a blessing in disguise. The Iraqi government began printing the new notes like crazy, which resulted in devaluation of the Saddam currency. By 1995, one US Dollar was worth 3,000 Saddam dinars. The Kurdish currency remained stable and thus protected from the runaway inflation that plagued the rest of Iraq.
After the fall of Saddam, the government at the time decided to print new notes as an interim measure while a new currency was in the pipeline. Some time after October 2003 and January 2004, a new form of 'unified' IQDs were established and exchanged at parity with the old IQD. Swiss notes, however, were valued at a rate of 150 per new IQD.
For a while, people started buying the new IQD in anticipation of making a profit when the country's economy improved. This let to a flurry of counterfeit IQDs. New security measures have been introduced, and there are now six different authentication features incorporated into the 25,000 IQD note.
The value of the new currency catapulted from a rate of 4,000 per one US Dollar to an all-time high of 980 IQD per dollar. As it stood at the end of the third quarter of 2012, the exchange rate is 1,200 per USD.
Today, the future of the IQD is unclear. There have been plans on the table since 2010 to redenominate the currency. As of late 2012, this has not happened. What it would mean is that three zeroes would be dropped from the value of the notes, while the value of the IQD would stay the same. Therefore, both 1,000 pre-denomination notes and 1 post-redenomination notes would both have a value of one US dollar. People with plans to purchase Iraqi dinar need to keep a close eye on the markets for the foreseeable future.
Initially, the new currency was pegged to the British pound. Pegging a currency is a means of stabilizing it by fixing it to that of another country. In 1959, the peg was switched to the US Dollar at a rate of 1 IQD to 2.8 US Dollars. The actual physical notes were printed in the United Kingdom, although the plates were manufactured in Switzerland. This is one explanation of how the currency acquired the adjective 'Swiss dinars.' Another possible explanation is that, at the time, Iraq had a low rate of inflation, as did Switzerland.
In the wake of the Gulf War in 1991, the United Nations imposed various sanctions on Iraq. The import of the Swiss dinar into the country became illegal. Vast numbers of poor quality Saddam notes were printed. The Kurds in northern Iraq continued to accept the Swiss notes as legal tender. Unfortunately, the Kurds did not have access to the Swiss plates and so they could print no new notes. As they refused to accept the Saddam notes as legal tender, 'their' currency appreciated compared to the Saddam notes.
It must certainly have been irritating to the Kurdish population in northern Iraq not to have the ability to print its own currency, it turned out to be a blessing in disguise. The Iraqi government began printing the new notes like crazy, which resulted in devaluation of the Saddam currency. By 1995, one US Dollar was worth 3,000 Saddam dinars. The Kurdish currency remained stable and thus protected from the runaway inflation that plagued the rest of Iraq.
After the fall of Saddam, the government at the time decided to print new notes as an interim measure while a new currency was in the pipeline. Some time after October 2003 and January 2004, a new form of 'unified' IQDs were established and exchanged at parity with the old IQD. Swiss notes, however, were valued at a rate of 150 per new IQD.
For a while, people started buying the new IQD in anticipation of making a profit when the country's economy improved. This let to a flurry of counterfeit IQDs. New security measures have been introduced, and there are now six different authentication features incorporated into the 25,000 IQD note.
The value of the new currency catapulted from a rate of 4,000 per one US Dollar to an all-time high of 980 IQD per dollar. As it stood at the end of the third quarter of 2012, the exchange rate is 1,200 per USD.
Today, the future of the IQD is unclear. There have been plans on the table since 2010 to redenominate the currency. As of late 2012, this has not happened. What it would mean is that three zeroes would be dropped from the value of the notes, while the value of the IQD would stay the same. Therefore, both 1,000 pre-denomination notes and 1 post-redenomination notes would both have a value of one US dollar. People with plans to purchase Iraqi dinar need to keep a close eye on the markets for the foreseeable future.
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Buy Iraqi dinar scam does not mean that the currency is not valid. In fact, Iraqi dinar is a currency of a world famous oil enriched country Iraq. The people of Iraq used to buy their daily necessities with this currency. Therefore, the currency is not scam at all. But there are online websites and distributors who supply counterfeited or out dated Iraqi dinars. Thus the scam does not lay with the original Iraqi dinar but with the scam Iraqi dinars and scam distributors. For additional reading check www.IraqiDinar.net
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