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Iraqi Dinar Executive Summary (IQD)

Country Overview

Foreign Exchange

The Central Bank of Iraq governs the exchange rate policy for the Republic of Iraq. Its charter is to issue currency, maintain gold reserves, and maintain domestic price stability among other functions. The exchange of currency for the IQD is accomplished through daily currency auctions to financial institutions and other currency exchange entities.


Government debt is forecast by Fitch at 51% of GDP in 2015. Currently, Iraq is seeking to obtain USD 4 billion in funding, in addition to an agreement reached with the World Bank and talks with the International Monetary Fund (IMF) to secure funding to meet government payroll and military equipment needs.

Credit Rating

While Standard & Poor's and Moody’s do not currently offer credit ratings for the Republic of Iraq, Fitch Ratings currently rates Iraq as a B- in its latest rating issued July 2015.

Inflation Rate

At the end of 2015, the inflation rate in Iraq was reported at 2.3, inching down from a rate of 2.2% ending 2014. Estimates of inflation into Q1 2016 continue along this trend.

Growth Outlook

Pressures facing the Iraqi economy and the volatility of the region are causing downward pressure on the growth prospects for the country in the near term. As of February 2016, the Iraq GDP had suffered an annual loss of 2.4%, with modest growth estimates in the coming quarters of between 3-4%.

Government and Trade

Several areas of concern result in challenging growth conditions in Iraq; these include the fiscal challenges presented by declining crude oil prices, as well as continuing challenges relating to the Islamic State’s (ISIL) influence on the country. Though ISIL’s control has been partially mitigated by intervention from Iraq itself as well as help from the international community, its grip on the region is a significant concern for investors in terms of security and stability. The stage of the unrest is a crumbling infrastructure, with cities and major thoroughfares in extreme disrepair and citizen displacement as a result of the current state of war in the Republic.

Iraqi Dinar (IQD)
Phonetic Spelling


The English term “dinar” is a transliteration of the original Arabic word (dīnār), historic roots tied to the Syriac dīnarā. The dinar is a main currency unit currently in circulation in nine mostly-Islamic countries, and has had historic use in several other nations, from India to what was once known as the Byzantine Empire.

Currency History

First introduced into circulation in 1932, the Dinar was put into place to replace the Indian rupee, which had been made the official currency by the British during their occupation of the country in World War 1.

Up through 1959, the dinar was pegged at par with the British pound until it was switched to the United States dollar. Through out much of the 1970's the dinar rose to a value of US$3.3778 per 1 IQD, and remained within a +/- 5% valuation range until the Gulf War.

After the Gulf War ended in 1991, and as a direct result of UN sanctions, the previously used Swiss note printing was no longer available, thereby creating new, inferior quality notes. Due to the sanctions imposed by the US and other members of the international community, along with the Iraqi government's excessive note printing, the dinar devalued quickly, reaching to a point where $1USD was valued at 3,000 dinars, by the late 1990's.

After the fall of Saddam Hussein by way of the 2003 invasion of Iraq, a joint decision by the Iraqi Governing Council and the Office for Reconstruction and Humanitarian Assistance to continue to print more Saddam-era dinar notes was put into place as a stopgap measure to maintain the currency supply until a new currency could be created.

Between 2003, and 2004, the Coalition Provisional Authority issued new Iraqi dinar coins and notes in order to establish a unified currency to be used throughout all of Iraq. All old banknotes were exchanged at a one-to-one rate, and the currency has been in circulation ever since.

Most recently, the Central Bank of Iraq has decided to take the 50 IQD banknote out of circulation, much in part to the public's cease of its trade. There will be an exchange period for the 50 IQD banknote denominations, the notes will be exchangeable between 1/3/2105 and 4/30/2015, after which the denominations will be fully withdrawn from trade, officially null and void and no longer hold value.

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