IRAQ MONETARY HISTORY
Monetary
authorities: Iraq
Exchange rate arrangements: Iraq
Monetary
authorities: Iraq
| Dates | Type | Name | Legal basis | Remarks |
| May 1890 -9 July 1915 | central bank (with commercial banking functions and mainly private ownership) (as part of currency union) | Ottoman pound (lira) (issued by central bank Banque Ottomane Impériale [also called Imperial Ottoman Bank or Osmanl Bankas, nicknamed Ottoman Bank] [headquarters Constantinople (now Istanbul), Turkey]) | United Kingdom, royal charter of the Imperial Bank of Persia, 2 September 1889; Ottoman Empire, Act of Concession of the Imperial Ottoman Bank, 4 February 1863 | Iraq was part of the Ottoman Empire. The first bank was the Imperial Bank of Persia (headquarters London, England), in Baghdad, in May 1890. The second bank was the Ottoman Bank, which opened a Baghdad branch in 1892; its notes do not seem to have circulated widely until it established the branch. The Ottoman government had issued notes on occasion, but they do not seem to have circulated outside of Constantinople (now Istanbul). The first coins were issued in the 300s BC. |
| 10 July 1915 -March 1917 | government issue alongside central bank (with commercial banking functions and mainly private ownership) (as part of currency union) | Ottoman government alongside Banque Ottomane Impériale (also called Imperial Ottoman Bank or Osmanl Bankas, nicknamed Ottoman Bank) (headquarters for both Constantinople [now Istanbul], Turkey) | Ottoman Empire, Act No. 207, 12 April 1915 | The Ottoman government issued notes (evrak- nakdiye) following the Ottoman Empire's entry into the First World War. |
| March 1917 -31 March 1932 | dollarization | Indian rupee (issued by Government of India [headquarters New Delhi, India]) | The British introduced the colonial Indian rupee almost immediately upon beginning their conquest of Iraq in early 1915. I date dollarization for the country as a whole as starting with the British capture of Baghdad. | |
| 1 April 1932 -30 June 1949 | currency board | Iraq Currency Board (headquarters London, England) | Iraq, Iraq Currency Law, No. 44, 19 April 1931; Law No. 101, 12 December 1931; royal iradah (decree) of 1 March 1932 | Established a currency board upon British advice despite some local sentiment for a central bank. Originally the board was to have opened 1 July 1931, but it was delayed. |
| 1 July 1949 -present | central bank | Masrif al-Watan al-'Irq (National Bank of Iraq) / Bank al-Markaz al-'Irq (Central Bank of Iraq) from 1 July 1956 (headquarters Baghdad, Iraq for both) | Iraq, National Bank of Iraq Law, No. 43, July 1947; Law No. 42 of 1947; royal decree of 31 March 1949; Central Bank of Iraq Law, No. 72 of 1956 | Established a central bank to signal the country's political autonomy. Iraq joined the IMF on 27 December 1945, as an original member. Iraq nationalized banks and insurance companies on 14 July 1964. |
Exchange rate arrangements: Iraq
| Dates | Arrangement | Legal basis | Remarks |
| 1500s -March 1917 | fixed; officially used Ottoman currency, but in practice Indian rupee was more widely used from mid or late 1800s | Iraq was part of the Ottoman Empire. The Indian rupee, which did not suffer the debasement that beset Ottoman coins, was widely used. Officially, all foreign coins were banned in 1883 (Ottoman Empire, circular of 25 January 1883), though they were later accepted for some payments (Ottoman Empire, circular of June 1894). The Ottoman lira was a decimal currency from 1881. | |
| March 1917 -31 March 1932 | fixed; used Indian rupee | The British introduced Indian rupee, one of their colonial currencies, upon conquering Iraq during First World War. The rupee was already familiar because it was widely used in trade. It was not a decimal currency. | |
| 1 April 1932 -17 December 1946 | fixed; 1 Iraqi dinar = UK£1 | Iraq, Iraq Currency Law, No. 44, 19 April 1931; Law No. 101, 12 December 1931 | Iraq established its own currency, which unlike the Indian rupee was decimalized; it was divided into 1,000 fils. "Dinar" derives from the Latin denarius, a silver coin of ancient Rome. Through the April 1931 law, the Iraqi dinar was to have had a gold value equal to the pound sterling, but the pound sterling was floated against gold on 21 September 1931, so the December 1931 law removed the planned gold parity. Indian rupees were exchanged at 1 Indian rupee = 0.075 Iraqi dinars from 1-28 April 1932, 1 Indian rupee = 0.074 Iraqi dinars from 29 April-5 May 1932, and 1 Indian rupee = 0.0745 Iraqi dinars from 6 May-30 June 1932. These were equal to the prevailing rates in London of the Indian rupee against the pound sterling. |
| 18 December 1946 -30 June 1949 | fixed; 1 Iraqi dinar = UK£1 = US$4.03 = 3.58134g gold | Iraq registered a gold parity with the IMF. | |
| 1 July 1949 -19 September 1949 | hard peg; 1 Iraqi dinar = UK£1 = US$4.03 = 3.58134g gold | Iraq, National Bank of Iraq Law, No. 43, July 1947; Law No. 42 of 1947 | Iraq replaced its currency board with a central bank, so the exchange rate changed from fixed to a hard peg. |
| 20 September 1949 -22 June 1959 | hard peg; 1 Iraqi dinar = UK£1 = US$2.80 = 2.48828g gold | Iraq, Law No. 42 of 1947 | Followed the United Kingdom's devaluation of the pound sterling on 18 September 1949. |
| 23 June 1959 -4 July 1964 | hard peg; 1 Iraqi dinar = US$2.80 = UK£1 = 2.48828g gold | Switched to the US dollar as the anchor currency, at the prevailing cross rate with pound sterling. RR: De facto peg to pound sterling / dual market. | |
| 5 July 1964 -17 November 1967 | hard peg, multiple rates; official rate 1 Iraqi dinar = US$2.80 = UK£1 = 2.48828g gold | Iraq, Law No. 87 of 1964 | Introduced excise taxes on transfers of foreign exchange for Iraqis leaving the country. RR: De facto peg to pound sterling / dual market. |
| 18 November 1967 -22 August 1971 | hard peg, multiple rates; official rate 1 Iraqi dinar = US$2.80 = UK£1.166 = 2.48828g gold | Did not follow the devaluation of the pound sterling on 18 November 1967. The central bank suspended foreign-exchange dealings on 16 August 1971 and resumed on 23 August 1971, but licensed dealers were authorized to continue certain transactions. RR: De facto peg to pound sterling / dual market. | |
| 23 August 1971 -20 December 1971 | hard peg, multiple rates; official rate 1 Iraqi dinar = UK£1.166 = 2.48828g gold (nominally) | Gold convertibility for all countries ended in practice when the United States abandoned the gold standard on 15 August 1971. Iraq remained pegged to the pound sterling and in effect unpegged from the US dollar. RR: De facto peg to pound sterling / dual market. | |
| 21 December 1971 -31 March 1972 | hard peg, multiple rates; official rate 1 Iraqi dinar = UK£1.166 = US$3.04 = 2.48828g gold (nominally) | Repegged to the US dollar after the United States devalued the dollar against gold on 18 December 1971. Iraq adopted wider margins. The central bank suspended foreign-exchange quotations from 24 June-2 July 1972 after the United Kingdom floated the pound sterling on 23 June 1972. RR: De facto peg to pound sterling / dual market. | |
| 1 April 1972 -2 July 1972 | hard peg, 1 Iraqi dinar = UK£1.166 = US$3.04 = 2.48828g gold (nominally) | Unified the exchange rate by abolishing the exchange tax on people leaving Iraq. After the United Kingdom floated the pound sterling on 23 June 1972, Iraq's central bank suspended foreign-exchange quotations on 24 June 1972, resuming on 3 July 1972. RR: De facto peg to pound sterling / dual market. | |
| 3 July 1972 -12 February 1973 | hard peg, 1 Iraqi dinar = US$3.04 = 2.48828g gold (nominally) | Switched to the US dollar as the anchor currency. | |
| 13 February 1973 -31 March 1978 | hard peg, 1 Iraqi dinar = US$3.3778 = 2.48828g gold (nominally) | Did not follow the devaluation of the US dollar on 13 February 1973. | |
| 1 April 1978 -16 October 1982 | hard peg, 1 Iraqi dinar = US$3.3778 | International Monetary Fund, Board of Governors, Resolution No. 31-4, 30 April 1976 ("Second Amendment") | The system of gold par values officially ended by agreement of IMF members. RR: Managed float / parallel market from January 1982. |
| 17 October 1982 -1994? | hard peg, 1 Iraqi dinar = US$3.2169 | Devalued by 5%. A currency confiscation occurred on 5 May 1993 as Iraq withdrew 25-dinar "Swiss print" notes from circulation (Iraq, decision of cabinet and Revolutionary Command Council, 2 May 1993). Notes were exchanged at 25 new dinars = 25 old dinars until 10 May 1993, but Iraq closed its borders to prevent foreign holders from repatriating the notes during the redemption period. After the period was over, the notes became worthless in areas controlled by the government of Saddam Hussein. The 25-dinar Swiss-print notes continued to be valid in Kurdish areas, which since the Persian Gulf War of 1991 had become de facto independent. RR: Managed float / parallel market. Multiple rates in 1982 and 1983. | |
| 1994? -29 June 2001 | hard peg; 1,750 Iraqi dinars = US$1 | The IMF source shows this exchange rate as of 1994 but does not say when it began. Iraq released little information to the IMF after the 1991 Persian Gulf War. RR: Managed float / parallel market to December 1997, when data end. | |
| 30 June 2001 -19 March 2003 | managed float | The IMF reclassified the exchange rate arrangement in light of information that state banks could buy and sell foreign currency at prevailing market rates. The actual change of arrangements was probably earlier. | |
| 20 March 2003 -3 October 2003 | clean float | With the US invasion of Iraq on 20 March 2003, the exchange rate arrangement became in effect a clean float for a time. | |
| 4 October 2003 -14 October 2003 | managed float | Returned to a managed float, with the central bank determining the exchange rate using rates resulting from foreign-exchange auctions. | |
| 15 October 2003 -present | (new) Iraqi dinar, managed float | Introduced a new design of currency across the whole country, including Kurdish areas that had used the "Swiss print" dinar printed from 1979-1989. Currency was exchanged at 1 new Iraqi dinar = 1 old Iraqi dinar, or 150 new Iraqi dinars = 1 Swiss print dinar. Approximately 4 trillion old dinars are expected to be exchanged. Old dinars ceased being legal tender on 15 January 2004. |