What Determines the Value of the Iraqi Dinar?

The dinar, which is the currency for Iraq, fluctuates in value due to current events that occur in the country. The iraqi dinar, which has been in circulation since 1932, has gone through numerous changes. For example, after 1991, the currency made the change from being printed on cotton to being printed on low grade wood pulp paper. Because of changes like this, the dinar trading value is constantly changing.

Up until 1959, the dinar was equal in value to the British pound. Around that same time, the dinar to dollars value was one dinar to 2.8 dollars. The dinar stayed high in value until the Gulf War in 1991. After the war, the United States placed sanctions on Iraq, and because of this the dinar plummeted to a rate of 3,000 dinars to one dollar. Although the dinar has not seen a drop off that severe since then, the Gulf War proves that significant events can play a role in determining the value of the dinar.

During their financial collapse, Iraq only printed currency denominations of up to 250 dinars. It was not until 2002, when the dinar was rising in value again, that higher denominations started to be printed. Today, the dinar is printed between denominations of 50 and 25,000. The dinar has actually regained so much value recently that fils have been rendered obsolete in Iraq. Fils is the currency used by numerous Middle Eastern countries, and its current exchange rate is about 1,000 fils to one dinar. For people who partake in dinar trading, they have seen a rise in the dinar to dollar exchange rate. The rate is now approximately 1,260 dinars to one dollar, which is the highest it has been in nearly a year.

The dinar has begun to regain its value since the Gulf War devalued the currency immensely in 1991. While some current events, such as the Gulf War, greatly change the value of the currency, other events, such as the month of July being the deadliest month in Iraq in five years, only affect the value slightly. Since some people participate in dinar trading, it is important to realize the importance current events play in determining dinar value.