Is Iraqi Dinar Going Up in Value and Why

The Iraqi Dinar has been a topic of interest for many investors and currency enthusiasts, but is it really going up in value? As of 2022, the Iraqi Dinar is still pegged to the US dollar at a fixed rate of 1,196 IQD to 1 USD.

This peg has been in place since 2003, and it's had a significant impact on the Dinar's value. The fixed exchange rate has made it difficult for the Dinar to appreciate in value, as it's tied to the US dollar.

However, there are some signs that the Iraqi government is planning to revalue the Dinar, which could lead to an increase in its value.

The Iraqi dinar, or IQD, is the currency of Iraq, and it's issued by the Central Bank of Iraq. The Central Bank of Iraq is responsible for circulating the Iraqi dinar.

The IQD is made up of 1,000 fils, but due to inflation, fils are no longer used in everyday transactions. Dinar is the smallest unit of currency in circulation now.

As of Q2 2021, the IQD is pegged at a rate of US $1 to 1,450 IQD. This means that the value of the IQD is tied to the value of the US dollar.

The Iraqi dinar, or IQD, has a fascinating history. It was first introduced in 1932 to replace the Indian rupee.

The dinar was pegged to the British pound until 1959, when it was pegged to the U.S. dollar. This exchange rate remained relatively stable until the Gulf War in the early 1990s.

Prior to the 1990 to 1991 Gulf War, the dinar was worth over $3 in U.S. currency. This changed rapidly after the war, when the government printed new currency that was inferior in quality.

As a result, the currency rapidly devalued to an average of 1,950 dinar per USD by 2003. The old Swiss notes, printed before the Gulf War, still circulated in some regions of the country.

In 2003, new notes were issued, and old notes were exchanged for new ones on a one-to-one basis. Swiss notes, on the other hand, were exchanged at a rate of one Swiss note for 150 new notes.

The official exchange rate for the USD/IQD was set at 1,190 until December 2020. Iraq's Central Bank then announced a devaluation of more than 20% in response to a severe liquidity crisis.

As of December 2020, the peg is set at 1:1,450. This means that the IQD is pegged at a rate of US $1 = 1,450 IQD.

The dinar has little use outside of Iraq because the country's main export, oil, is priced in US dollars. This makes it difficult to sell IQD outside of Iraq.

Typically, brokers selling IQD cash will charge a 25% to 30% premium over the official exchange rate. This means that those who buy IQD face large losses immediately upon purchasing it.

The Iraqi dinar's value has been on a rollercoaster ride, and understanding market trends is crucial to making informed decisions. The Iraqi economy has been growing steadily, with a GDP growth rate of 9% in 2020, according to the World Bank.

Iraqi dinar's value is heavily influenced by the country's oil exports, which account for over 90% of its revenue. The oil price surge in 2020 led to a significant increase in the dinar's value.

However, the dinar's value can be volatile due to the country's high inflation rate, which reached 8.5% in 2020. This is a major concern for investors.

Iraq has been working to diversify its economy, with a focus on non-oil sectors such as manufacturing and tourism. The government has implemented policies to attract foreign investment and boost economic growth.

The Iraqi dinar's value is also affected by the country's political stability. A stable government can lead to increased investor confidence and a stronger currency.

Iraq has made significant progress in rebuilding its economy after years of conflict. The country's GDP has been growing steadily, and the dinar's value has been relatively stable in recent years.

The Central Bank of Iraq (CBI) is actively working to increase the value of the Iraqi dinar, with the Finance Committee and the CBI Governor discussing monetary policy and methods to achieve this goal.

The Finance Committee, chaired by Atwan Al-Atwani, has expressed its desire to coordinate with the Central Bank to enhance the value of the Iraqi dinar.

The Central Bank Governor, Ali Al-Alaq, has emphasized the establishment of fundamental rules to monitor transfers and analyze cash operations, which is a crucial step in stabilizing the market.

The Committee and the Central Bank Governor have discussed adopting international standards and improving banking institutions, which could lead to a more stable and reliable financial system.

The Central Bank law may be amended to accommodate these changes and improve the overall financial landscape of Iraq.