Myths and truth about the Iraq dinar

There’s been a lot of talk recently surrounding the Iraq dinar. Some of what you’ve heard is true. But some other is just pure hype. Here you’ll find exactly which are true, which may be true in future but at the time of writing is yet unknown, and what is pure speculation.

Myth or Truth: In the regime of the former Iraq dictator Saddam Hussein, the Iraq dinar exchange rate was $3.22 USD. This is correct to a degree, but what most people that have an interest in you buying them don’t tell you that...

...this rate wasn’t a result of the trade in the open market. It wasn’t tested in the world currency exchange market, nor was a result of it. It was simply made up by Saddam. It was only him and handful high placed officials that could exchange Iraq dinars at this rate. Even Iraqi people couldn’t.

Myth or Truth: You can go to your local bank and exchange Iraq dinars for any major currency. False! As of the time of this writing the Iraqi dinars aren’t freely traded on the open market. Currently the Central Bank of Iraq fears that trading them in the international exchange would immediately result in a downfall of the dinar. For the time being there aren’t any major reputable banks in the US or in Europe that exchange Iraq dinars at a market based rate on a day to day basis, simply because there’s no market based rate.

Myth or Truth: The Kuwait dinar dropped in value and then increased to $3.40 USD, all over a short time frame. The Iraq dinar will do the same. False!

Yes, it is true the Kuwait dinar went to a low value as a result of the Iraqi war in 1990. It is also true that once the Desert Storm operation pushed Saddam’s troops away of Kuwait, the restored government issued new banknotes and returned the exchange rate to the same $3.40 USD it had prior to the war. But...

...the old banknotes had to be handed in personally at local banks to be swapped for the new ones. And each had their series checked against known series of banknotes stolen during the Iraqi occupation. Any mismatch and your money were confiscated and declared worthless. And the exchange only happened over a very short period of time, after which all old money was declared void.

However, there is at least one known case of someone getting very rich as a result of buying Kuwaiti dinars when they were low and selling them back when they become high. So, yes, it was possible. Very risky but possible.

Could it happen to you with the Iraq dinar investment? Possible, but don’t take it for granted. And keep in mind this is a long time investment. If you have decided it’s worthwhile, don’t spend more money that you can afford to lose.

Dinar Trading

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