Currency exchange: Iraqi Dinar

At the middle of October 2003 the Central Bank of Iraq performed a currency exchange on the Iraqi dinar.

Prior to that date, there were two types of Iraqi dinars in circulation: the old dinar, a reminder of the former Saddam regime, and the Swiss dinar. The old dinar, also known as the print dinar, was printed on poor quality paper, lacked modern security features and was often a target for counterfeit operations. The most common denominations were the 250 dinar note and the 10,000 dinar note. See this page if you’re interested in reading more about the old Iraqi dinar.

The Swiss dinar was mostly used in North of Iraq, in some parts of the Kurdish North. It was the formal national currency, printed outside of the country prior to the Iraq commercial embargo, and was often of a better quality than the locally printed banknotes. But the Swiss dinar was so old the banknotes were literally falling apart and could no longer be used. For those interested, there’s more information available on the Swiss dinar.

The currency exchange introduced a single Iraqi dinar, to be used through the entire country as the official Iraq currency. The new banknotes were printed in the following denominations: 50, 250, 1000, 5000, 10000 and 25000. They had much better security features, and were printed on quality paper. This is what you’ll get when buying Iraqi dinars, if you want to invest in it of course, so I’ve wrote about the security features of the new Iraqi dinar here.

The exchange rate set by the Central Bank of Iraq was 1:1 for the old dinar and 1:150 for the Swiss dinar. This means people got 150 new dinars for each Swiss dinar they had.

The exchange took place between October 15th 2003 and January 15th 2004. After this date the old banknotes were no longer valid. They can seldom be found on the Internet and are of interest only to coin collectors. They bear no other value in the currency market.

The Iraqi dinar currency exchange was taking place only on Iraqi banks. You had to physically hand in the old banknotes to receive the new ones. Because the print Iraqi dinars were so easily counterfeited, and there were so many of those reaching even honest people, those who presented fake money weren’t arrested or facing any charges but obviously they received nothing in return.

The old banknotes received by the exchange centers were promptly marked. Any marked banknote was no longer valid. The marking was done so the old bills couldn’t be stolen during transportation and exchanged again.

As a currency exchange is a very complex operation and costs a lot to perform, it is unlikely to happen again in the near future. But you might want to be careful, as unlikely doesn’t mean impossible.

And, as with the previous Iraqi dinar currency exchange, when it happens it’s very likely you’ll have to be in Iraq within a short timeframe to be able to exchange your dinar banknotes.

Any dinars held in an Iraqi bank account will be automatically converted. For further information on opening an account with an Iraqi bank over Internet see this page.