The Rise And Fall Of The Iraqi Dinar
A currency is a term used to refer to the money present in any form, which is used or circulated as a medium of exchange, especially for the purpose of circulating banknotes and coins. The currency of Iraq is Dinar, which was introduced into the circulation in the year 1932. This was the step taken as the means of replacing the Indian rupee. Rupee, which is the currency of India had been the currency of Iraq since the British occupation of the country in World War I. At that time the rate of exchange of Iraqi Dinar in reference to Indian Rupee was 1 dinar = 11 rupees. The dinar was also pinned at par with the British pound until the mid of the 20th century. However, the pinned value was switched to the United States dollar in the year 1959. This was done after maintaining the same rate where, 1 dinar = 2.8 dollars.
The whole procedure was changed, however, as a result of not following the devaluations of the U.S. Currency. This resulted into the rise of dinar's value, which now was equivalent to US$3.3778, before a 5 percent devaluation that weakened the value of the dinar to US$3.2169. Following the current trend, the Iraqi Dinar maintained the same rate until the Gulf War. But, eventually it changed in the late 20th century due to the reason as, the black market rate was rumored to possess at least five to six times higher rate than the official one.
There are several reasons that resulted into the devaluation of the Iraqi Dinar. After the Gulf War in the early 20th century, due to UN countenances, the previously used Swiss printing was no longer accessible. However, a new and the indifferent quality notes issue was seen. The previously held issue came out to known as the Swiss dinar and continued to work in the Kurdish region of Iraq. The value of Iraqi Dinar lost its shine majorly due to countenances placed on Iraq by the United States and the international community and the inordinate issue of government printing of the new notes.
Moreover, there were few more factors that affected the status of the Iraqi Dinar. The breakdown was resulted following the accretion of Saddam Hussein in the 2003. This made the Iraqi Governing Council and the Office for Reconstruction and Humanitarian Assistance to begin printing more Saddam dinar notes. This was done as a makeshift effort, which maintained the money supply until the new currency could be acquainted.
Reference Url: [http://www.articlesbase.com/banking-articles/the-rise-and-fall-of-the-iraqi-dinar-7159394.html]
The whole procedure was changed, however, as a result of not following the devaluations of the U.S. Currency. This resulted into the rise of dinar's value, which now was equivalent to US$3.3778, before a 5 percent devaluation that weakened the value of the dinar to US$3.2169. Following the current trend, the Iraqi Dinar maintained the same rate until the Gulf War. But, eventually it changed in the late 20th century due to the reason as, the black market rate was rumored to possess at least five to six times higher rate than the official one.
There are several reasons that resulted into the devaluation of the Iraqi Dinar. After the Gulf War in the early 20th century, due to UN countenances, the previously used Swiss printing was no longer accessible. However, a new and the indifferent quality notes issue was seen. The previously held issue came out to known as the Swiss dinar and continued to work in the Kurdish region of Iraq. The value of Iraqi Dinar lost its shine majorly due to countenances placed on Iraq by the United States and the international community and the inordinate issue of government printing of the new notes.
Moreover, there were few more factors that affected the status of the Iraqi Dinar. The breakdown was resulted following the accretion of Saddam Hussein in the 2003. This made the Iraqi Governing Council and the Office for Reconstruction and Humanitarian Assistance to begin printing more Saddam dinar notes. This was done as a makeshift effort, which maintained the money supply until the new currency could be acquainted.
Reference Url: [http://www.articlesbase.com/banking-articles/the-rise-and-fall-of-the-iraqi-dinar-7159394.html]
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