Introduction

Long after the foreign troops have left the country, the IMF and World Bank will probably have an extended and continued roll to play in Iraq. The IMF is one of the most powerful architects of the world economy and is controlled by the world's wealthiest nations. The USA is the biggest shareholder in both the Washington-based IMF and its sister institution the World Bank.

In 2004 it was reported that Iraq had debts of US$ 120 billion (with France and Russia being the main creditors). Some of the debt may be written off. However, debt forgiveness is seldom a blessing, and generally comes at a very heavy price. The IMF has granted Iraq several loans and stand by arrangements, but some people argue that this only shifts the debt from various creditors to the IMF. For 2010, an IMF loan of US$ 5 billion plus has been suggested. Critics further argue that if Iraq remains indebted, then the IMF has a way of exerting control.

The main objectives of the IMF program are to maintain macroeconomic stability, facilitate higher investment and output in the oil sector, and advance structural reforms and institution building. Maintaining macroeconomic stability remains a key objective. The Central Bank of Iraq is gearing its monetary and exchange rate policies toward achieving this objective.

One supposes that the fate of the Iraqi dinar lies in the hands of the IMF, which maintains a program exchange rate (fixed at 1170 dinars in late 2009 ). However, there is not yet a set international exchange rate, and so international banks do not yet exchange Iraqi dinars. An international exchange rate will no doubt be decided by the IMF - if and when.

It also has to be remembered that Iraq's main export commodity is oil, and this is sold in US$ (not Iraqi dinar) which are deposited in a New York bank account controlled by the Iraqi government. Since the end of world war II, the US dollar is of course the world's default currency.

Investing in a country's currency is tantamount to investing in that country's economy as a whole, not in any single commodity. Investing in the Iraq Dinar is not the same as investing in Iraq's oil.

It is hard to see how the dinar can appreciate some 1,000 % against the US dollar.

On the other hand several countries have so far removed zeroes from their currency (ie. re-based it). Currency rebasings are usually monetarily neutral and are introduced to make commercial calculations and cash dealing easier and cheaper. In particular, Turkey removed six zeroes in January 2005 when they introduced the new Turkish lira (YTL), and nobody became rich because of it. (The old lira had devalued from 14 to 1,500,000 for US$1 over a thirty year period, due to hyperinflation). The old turkish lira (TRL) remained valid alongside the new YTL for one year, and prices were quoted in both units in the shops. US $1 = 1.48 YTL (new lira) = 1,480,000 TRL (old lira). Perhaps at some stage Iraq will remove three zeros in a likewise manner. Iraq is probably waiting until inflation is well under control (even though for most countries, it is long term inflation which eventually forces the need for debasing).

If the dinar is re-based, then even newer dinar notes will have to be issued, and the current new dinars will eventually be withdrawn. This would be one good reason for opening up a dinar bank account, rather than holding the dinars in cash.

The Central Bank of Iraq had raised interest rates in an attempt to allow a gradual appreciation of the dinar in an attempt to fight dollarization of the Iraq economy.

An example of interest rates at the Warka Bank in Iraq (January 2010) are:

Interest Paid Annually on Savings Accounts:
1. IQD savings accounts: 7% per year.
2. USD savings accounts: 4% per year.

Certificate of Deposits (USD):
1. 6 months CD: 4%.
2. 1 year CD: 5%.

Certificate of Deposits (IQD):
1- 3 months CD: 8.5%
2- 6 months CD: 9.5%.
3- 1 year CD: 10.5%.

Thats quite a good interest rate for USD anywhere in the world in early 2010 from a basic bank account.

There is an increasing interest in the Iraq Stock Exchange (ISX). By opening a dinar account with Banks which are also able to make ISX dealings, then one is in a good position for the ISX. The Iraq Stock Exchange (known by the common moniker of ISX, and formally the Baghdad Stock Exchange), is a stock exchange in Baghdad, Iraq, and has currently been open to all Iraqi citizens since June 2004, and foreigners since 2007. The ISX operates under the oversight of the Iraq Securities Commission, an independent commission which was modeled after Western-style exchanges. It is growing rapidly with more than one hundred companies.

It is probably an understatement to say that this is quite speculative, but there is an expectation that as foreign investment gradually increases then so to will the value of the Companies. It would seem imperative that one proceeds with the utmost caution.

But the first step is to open both a USD and an Iraqi Dinar account.

How to open a Bank account in Iraq

Several Banks in Iraq now accept foreign customers. There is a list on the Central Bank of Iraq website ( http://www.cbi.iq ). You may also wish to check out as to whether the bank of your choosing is also an official broker on the ISX (Iraq stock exchange)

The following information relates to the Warka Bank, which was one of the fore-runners for individual foreign banking and investment.

When you open a Warka Investment Bank account you should fund your account within six months, otherwise it will be closed. Visit the Warka website for a list of corresponding Banks so that you can wire transfer US dollars to your newly opened account. Citibank New York is one such corresponding Bank.

You will actually need to open two accounts - one in US dollars and one in IQD. Once the accounts are open and you have transferred US dollar funds, you need to specify how much should go into your IQD account. All USD and IQD Warka Bank accounts established after 22 July 2007 must maintain a minimum balance of $150 dollars in their USD account and 300,000 dinars in their IQD account.

The Warka Bank has an internet facility which allows you to have your own login and password to your account information. The link is :
https://www.warkaonline.com/IBS/index.jsp
Currently the annual fee is 15,000 dinars for this. This must be renewed each year by yourself, by a simple email authorisation. If you forget to do so, your password will become invalidated, and you will need to set up the internet facility again.

Almost all correspondence with the Bank is by email, including account opening.

For any type of authorisation, the Bank will email you an example. All signed authorisation forms and identity verification is done in the form of jpg or pdf files. This means you will need a scanner. Print off all forms, fill in the blanks, sign the form, scan the form and create an email attachment in the form of a jpg or pdf file. Do likewise for a copy of your Passport.

The Bank's working days are Sunday through Thursday (Friday and Saturday is their weekend).

The Warka Bank website has improved considerably over the last couple of years. All the contact information is there. As stated they will email you sample authorisation and bank account opening templates. There is probably no need to provide examples here. The Bank is quite efficient - all things considered. But allow a day or two for a response.

All you need to bear in mind is the concept of sending signed attachment documents in the form of jpg or pdf files. So an investment in a relatively cheap printer/scanner/flatbed photocopy combo unit is a good idea - then everything is pretty easy actually.

Warka Investment Bank Contact eMail Addresses

For any information concerning international foreign banking relations:
IFRD@Warka-Bank-Iq.com

For any information concerning banking customer services:
C.Services@Warka-Bank-Iq.com

For any information concerning opening an account at any Warka Bank branches:
C.Accounts@Warka-Bank-Iq.com
cbr@WarkaInvestmentBank.com

For any general information you need to ask Warka Bank about:
Info@WarkaInvestmentBank.com

For any information concerning the Iraq stock exchange (ISX):
ISX@Warka-Bank-Iq.com

For any information concerning Warka online banking:
e-Bank@Warka-Bank-Iq.com

For any information concerning wire transfers:
MT@WarkaInvestmentBank.com

For any information concerning credit cards (VISA/MASTERCARD):
CC@WarkaInvestmentBank.com

Official Warka Investment Bank Websites

http://www.WarkaInvestmentBank.com/contact_us.htm
http://www.Warka-Bank.com
http://www.Warka-Bank-IQ.com

ISX stock exchange

The Iraq Stock Exchange (ISX), formally the Baghdad Stock Exchange, was incorporated and began operations in June 2004. It operates under the oversight of the Iraq Securities Commission, an independent commission modeled after the U.S. Securities and Exchange Commission.

Before the 2003 invasion of Iraq, it was called the Baghdad Stock Exchange and was operated by the Iraqi Ministry of Finance. Now it is a self-regulated organization similar to the New York Stock Exchange, owned by the 50 or so member brokerages. As of 2005, the ISX was Iraq's only stock exchange. It opened in 2004 with 15 companies, and now lists more than 100 companies. Turnover of shares in 2005 was approximately $5 million USD per trading session.

The Aswat al-Iraq news agency covers every trading session with reports published on the web in English and Arabic.

In February 2009, the Iraq Stock Exchange announced that it would have a computerized system to show the movement of shares (as opposed to the original pen and paper and whiteboards). Three backup generators will make sure the market will be running nonstop, despite widespread electrical brownouts across the Iraqi capital. On April 19, 2009, the ISX switched to electronic trading. Initially only five companies are available for electronic trading, but more were added over the few months.

It has currently been open to all Iraqi citizens since June 2004. Foreigners were allowed to purchase stocks on the ISX from August 2007. The market is dominated by a handful of wealthy Iraqis, many of whom live outside the country and call in their orders by phone to brokers. Foreign investors in late 2008 accounted for less than 20% of activity.[

Stocks mainly focus on the financial sector, tourism and hotels, and local construction and telecommunications companies. Major stocks included Bank of Baghdad, Baghdad Soft Drinks Co, Iraqi Tufted Carpets Co, Hader Marble, and Altherar Agriculture.

From November 1, 2009 trading days on the ISX are Sunday to Thursday. The pre-session period starts at 9:30 am local time, and the main trading session is for two hours from 10 am to 12 noon local time.

The various stock sectors within the ISX are Bank sector, Insurance sector, Investment sector, Industry sector, Service sector, Industry sector, Hotel and Tourism sector and the Agriculture sector.

The Iraqi market is viewed as a long-term investment.

A Free Share is exactly what it sounds like, and is always paid as a percentage of the number of shares that an investor owns (eg. an investor owns 100 shares of Palestine Hotel which is offering 35% Free Shares - the investor receives 35 Free Shares and so he owns 135 shares of Palestine Hotel). Sometimes the share price drops slightly after an offering of Free Shares.

A Dividend is paid in IQD and is paid as 1 IQD and is always paid as a percentage of the number of shares that an investor owns (eg. an investor owns 100 shares of Mansour Pharmaceuticals which is offering 9% Dividends - the investor receives 9 IQD. Payment is made to the Broker/Bank Account which is available to the investor. Also, currently Dividends are rarely offered as the preferred profit offerings are in Free Shares or Paid Up Capital Shares.

A Paid Up Capital Share is optional and the investor does not actually have to take advantage (purchase) the offering which usually are priced at 1 IQD (sometimes 2 IQD) per share (eg. an investor owns 100 shares of Basra Bank which is offering 36.363% Paid Up Capital Shares at 1 IQD per share - if the investor wishes to purchase these shares at the percentage offered then the investor will pay 100 x 36.363% = 36.363 IQD and receive 36.363 shares, and so he now owns 136.36 shares of Basrah Bank. Companies, Banks, and Hotels offer Paid Up Capital Shares to raise or increase their capital. If the offer price (ie. 1 IQD) is too close to the current share price then it does not necessarily make any sense to pay 1 IQD per share when the normal share price is 1.05 or 1.10 or even 1.15 IQD as it is common for the share prices to trade for less after an offering since some investors will sell off their Paid Up Shares to take the profit. However, if the share price is 1.5 IQD or higher, then the potential for an immediate profit is there and can be realized if the investor decides to sell the Paid Up Capital Shares after receiving them.

The examples below refer to the Warka Investment Bank which was the original trend setter in dealing with the ISX, but there are also other banks and brokers in Iraq who are willing to do business with foreigners. The official ISX website ( http://www.isx-iq.net ) has a list of all brokers. You can contact the brokers and follow their procedures.
See also
the menafin website
Also visit the news section of the http://www.warka-bank-iq.com website to keep upto date about ISX company stocks (paid up/free capital shares).

Certification prior to buying stocks

Stocks may be purchased through a broker (eg Warka Bank) and held under the name of the broker as a proxy. However it appears to be the case that this proxy option is no longer available for new customers.

Alternatively, stock can now be purchased through a broker and held under the name of the actual foreign investor. In this case, an Iraqi Embassy certification process must first take place.

Iraqi Embassy Certification

The following documentation must be submitted and certified by the Iraqi Embassy or Consulate in your country:
1. Notorised copy of Passport
2. Notorised copy of ID card (country dependent)
3. Your address, telephone number and email
4. Three signatures ( one docunebt with 3 signatures)
Once the documents have been certified by the Iraqi Embassy, they must then be sent to your broker (eg Warka Bank) in Iraq. The documents must bear the Iraqi Embassy seal and are to be sent to your broker's mailing address where it will be submitted to the ISX for verification and approval.

(a) Certification via the Arab American Chamber of Commerce

This is the fastest method
(1) Create your own legal size document to include all the elements required. Ideally it should be a single document in entirety. The following is an example.

------------------------------

(Your Name)
(Address)
(City, State, Zip)
(Phone) / (E-mail)

Dear Sirs
  To Whom It May Concern:
I, (print your name), born in United States on (date of birth) certify with my three original signatures below, that this is a true and accurate copy of my valid U.S. Passport and valid Identification. Above is my current home address, telephone number, and email address.

[COPY OF PASSPORT]

[COPY OF ID]

Three original signatures:
(1) Signature:________________________________________
Date: _______
(2) Signature:________________________________________
Date: _______
(3) Signature:________________________________________
Date: _______

For Notary Public:
State of __________________
County of _______________
On this, the___________day of ______________, 20______, before me a notary public, the undersigned officer, personally appeared_____________________________, known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument, and acknowledged that he executed the same for the purposes therein contained.
In witness hereof, I hereunto set my hand and official seal.
___________________________ Notary Public

------------------------------

(2) Have the document notarized by a local Notary Public.
(3) Send your document along and a prepaid return envelope to:
    Arab American Chamber of Commerce
    Certification Department
    972 Mt. Holly Dr. Annapolis MD 21401.
    Tel: (410) 757-5544 or 1 888 999 5991
The fees include:
    AACC Service fee, Notary public and court fee, Secretary of State fee,
    Department of State fee, Embassy of Iraq fee,
    and fee for returning it to you in the prepaid envelope you provide.
Embassy of Iraq details:
    Embassy of Iraq,     1801 P Street, NW,     Washington, DC 20036
    Tel: (202) 483-7500
    http://www.iraqembassy.org
(4) Make a copy of the certified document for yourself, and send the original certified document to Warka BanK:
    Warka Bank for Investment and Finance
    Main Branch – Baghdad Iraq
    International Foreign Relations Department
    Watheq Square, Salman Faiq St.
    Hay Al Wihda, Sec. 902, 14th St.
    Baghdad, Iraq
    Phone +964 1 7172828 (Fax: +964 1 7179555)

(b) normal Certification

(1) Create your own legal size document to include all the elements required. Ideally it should be a single document in entirety. The following is an example.

------------------------------

(Your Name)
(Address)
(City, State, Zip)
(Phone) / (E-mail)

Dear Sirs
 To Whom It May Concern:
I wish to provide the necessary authentication and certification requirements to engage in trading on the Iraqi Stock Exchange. Please accept the following Authenticated Legal Personal Documents with original seals, signatures, and dates in chronological order for this reason.
I, (print your name), born in United States on (date of birth) certify with my three original signatures below, that this is a true and accurate copy of my valid U.S. Passport and valid Identification. Above is my current home address, telephone number, and email address.

[COPY OF PASSPORT]

[COPY OF ID]

Three original signatures:
(1) Signature:________________________________________
Date: _______
(2) Signature:________________________________________
Date: _______
(3) Signature:________________________________________
Date: _______
1. Notary Public
State of __________________
County of _______________
On this, the___________day of ______________, 20______, before me a notary public, the undersigned officer, personally appeared_____________________________, known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument, and acknowledged that he executed the same for the purposes therein contained.
In witness hereof, I hereunto set my hand and official seal.
___________________________
2. Regular document certification from the Secretary of State (not an apostille):
________________________________________________ __________________ Seal
Secretary of State--- Date _____
3. Authentication of the Secretary of State by the Department of State:
US Department of State, Authentication Department, 518 23rd Street, NW, Washington, DC 20520 (202) 647-4000
________________________________________________ __________________ Seal
Department of State--- Date _____
4. Legalization of the document by the Embassy of Iraq:
Embassy of Iraq, 1801 P Street NW, Washington, DC 20036 (202) 483-7500
________________________________________________ __________________ Seal
Embassy of Iraq --- Date _____

------------------------------

(2) Have the document notarized by a local Notary Public.
(3) Certify your document at the clerk of the county court.
(4) Take the document (or mail it with a postage paid return envelope) to the capital of your state to certify it from the Secretary of State. Ask your Secretary of State to put a regular certification on the document, not an apostille. Check on the charges first.
(5) Mail the document to the Department of State in Washington DC with a postage paid return envelope. The Department of State will authenticate the certification of the Secretary of State
(6) Mail the document to the Embassy of Iraq in Washington DC with a postage paid return envelope. The embassy will legalize the document and mail it back to you.
(7) Send your certified copy to Warka Bank. Keep a copy for yourself.
    Warka Bank for Investment and Finance
    Main Branch – Baghdad Iraq
    International Foreign Relations Department
    Watheq Square, Salman Faiq St.
    Hay Al Wihda, Sec. 902, 14th St.
    Baghdad, Iraq
    Phone +964 1 7172828 (Fax: +964 1 7179555

Buying stocks

Your broker (eg Warka Bank) will handle your stock transactions via your (Warka) Bank account. Note the aforementioned certification process if you do not wish to use (or this is your first buy order) a proxy certificate name.

Send your purchase requests the day before the trading day you have in mind. Only part of all your buy requests may actually get fulfilled. You will need to send another buy request for those that did not make it - they will not get automatically re-submited. There is a minimum purchase requirement of shares per company stock (eg 200,000 shares).

You will receive an email with an excel spreadsheet attachment detailing exactly what was executed.

When emailing the bank to make the buy request, you will need your scanner, so that you can attach the actual buy order in a jpg or pdf file.

The email should be sent to ISX@Warka-Bank-Iq.com   or   IFRD@Warka-Bank-Iq.com

A simple example email to buy is as follows:

------------------------------

Dear Sirs,
re: ISX purchase request consent form
...Your IQD account name at the Bank...
...Your IQD account number at the Bank...
Please find enclosed with this email an ISX purchase request consent form, to be executed as stated in the form.
The name of the attachment is .......
Yours faithfully, .....

------------------------------

The following is an example of an ISX purchase form attachment to be used. It should be printed, signed and then scanned as a jpg or pdf file:

------------------------------

I, (Your Name) authorize Warka Investment Bank to withdraw approximately (1,600,000) Dinars from my IQD Savings Account #__________ to purchase stocks in the following manner. Stocks are to be held by Warka Investment Bank in trust until it is legal for shares to be transferred into the name of (Your Name) or until such time as (Your Name) shall instruct Warka Investment Bank to sell said shares on the Iraq Stock Exchange. It is understood between the parties that Warka Investment Bank shall receive 2% in the form of commission at the time when shares are transferred into the name of (Your Name). The following ISX stock purchases are to be executed for the trading day of (Date).
Purchase (200,000) Dinars worth of stock in each of the companies below:
• Banking Sector:
1) AL-WARKA'A INVESTMENT BANK / WARKA BANK FOR INVESTMENT & FINANCE
2) ASHOUR BANK
3) BABYLON BANK
4) BANK OF BAGHDAD
5 )BASRAH INTERNATIONAL BANK
Purchase (100,000) Dinars worth of stock in each of the companies below:
• Agricultural Sector:
6) IRAQI AGRICULTURAL PRODUCTS MARKETING
7) IRAQI FOR SEED PRODUCTION
8) IRAQI PRODUCTION AND MARKETING MEAT
Purchase (150,000) Dinars worth of stock in each of the companies below:
• Industry Sector:
9) BAGHDAD SOFT DRINKS
10) NATIONAL CHEMICAL INDUSTRIES
Total Dinars invested in 10 stocks = (1,600,000) Dinars.
Parties in full agreement, signed below.
_____________(Your Name)_____________ Date_____________
Legal Account Owner & Investor
_____________________________________ Date_____________
Warka Investment Bank Representative

------------------------------

Selling stocks

Your request to sell stocks should be sent the day before you require the sale. If some of the items in your sell request were unable to be sold, you will need to re-submit your sell request (now modified). Any items not sold will not be automatically resubmitted by the bank. There may not be enough buyers to completely fill your order on a given day. Warka Investment Bank will sell your shares/stocks as long as there was someone willing to buy them. It may take a few days to get email confirmation of your sale results. This will be in the form of an excel spreadsheet.

When emailing the bank to make the sale request, you will as always need your scanner, so that you can attach the actual sale order in a jpg or pdf file.

The email should be sent to ISX@Warka-Bank-Iq.com   or   IFRD@Warka-Bank-Iq.com

A simple example email to sell is as follows:

------------------------------

Dear Sirs,
re: ISX sell request consent form
...Your IQD account name at the Bank...
...Your IQD account number at the Bank...
Please find enclosed with this email an ISX sell request consent form, to be executed as stated in the form.
The name of the attachment is .......
Yours faithfully, .....

------------------------------

The following is an example of an ISX sell form attachment to be used. It should be printed, signed and then scanned as a jpg or pdf file:

------------------------------

I, .....Your Name..... authorize Warka Investment Bank to sell approximately (1,300,000) shares and deposit all sale proceeds into my IQD Savings Account #........ It is understood between the parties that Warka Investment Bank shall receive 1% in the form of commission at the time when said shares/stocks are sold and their sale proceeds deposited into my aforementioned mentioned account. The following ISX share/stock sell is to be executed for the trading day of .... date ......
Sell (150,000) shares from each of the company stocks below:
• Banking Sector:
1) AL-WARKA'A INVESTMENT BANK
2) BABYLON BANK
3) IRAQI MIDDLE EAST INVESTMENT BANK
4) NATIONAL / CIVILIAN BANK OF IRAQ
Sell (100,000) shares from each of the company stocks below:
• Services Sector:
5) AL-NUKHBA FOR CONSTRUCTION
Sell (120,000) shares from each of the company stocks below:
• Industry Sector:
6) BAGHDAD SOFT DRINKS
7) MESSAN FOR FOOD INDUSTRIES
8) MODERN PAINT INDUSTRIES
9) NATIONAL CHEMICAL INDUSTRIES
10) NINEVEH FOR FOOD INDUSTRIES
Total shares to be sold from 10 company stocks = (1,300,000) shares.
Parties in full agreement, signed below.
........... (Your Name) ............. Date ..............
Legal Account Owner & Investor
...................................... Date ..............
Warka Investment Bank Representative

------------------------------

ISX company List (November 2009)

Not all of the companies below might be actually currently trading very much, if at all. The following links will enable you to see which companies have been trading recently, and their closing prices.
www.isx-iq.net/page/english/analysis-daily-e.htm
www.isx-iq.net/page/english/bulletin-daily-type-e.htm (Electronic Trading Bulletin)

• Agriculture Sector:

Al-AHLYIA FOR AGRICULTURAL PRODUCTION
Al-EKHA'A FOR AGRICULTURAL PRODUCTION
AL-ITHMAR AGRICULTURAL
AL-THERAR FOR AGRICULTURAL PRODUCTION
BABIL FOR ANIMAL PRODUCTION
IRAQI AGRICULTURAL PRODUCTS MARKETING
IRAQI FOR SEED PRODUCTION
IRAQI PRODUCTION AND MARKETING MEAT
MIDDLE EAST FOR PRODUCTION - FISH
MODERN FOR ANIMAL PRODUCTION

• Banking Sector:

AL-WARKA'A INVESTMENT BANK / WARKA BANK FOR INVESTMENT & FINANCE
ASHOUR BANK
BABYLON BANK
BANK OF BAGHDAD
BASRAH INTERNATIONAL BANK
COMMERCIAL BANK OF IRAQ
CREDIT BANK OF IRAQ
DAR ESSALAM INVESTMENT BANK
ECONOMY BANK FOR INVESTMENT
ETEHAD IRAQI BANK
GULF COMMERCIAL BANK
INVESTMENT BANK OF IRAQ
IRAQI ISLAMIC BANK
IRAQI MIDDLE EAST INVESTMENT BANK
IRAQI UNITED BANK
KURDISTAN INTERNATIONAL BANK
MOUSIL BANK FOR INVESTMENT
NATIONAL / CIVILIAN BANK OF IRAQ
NORTH BANK
SUMER COMMERCIAL BANK

• Hotels & Tourism Sector:

AL-MANSOUR Hotel
AL-SADEER Hotel
ASHOUR Hotel
BABYLON Hotel
BAGHDAD Hotel
ISHTAR Hotel
KARBALA Hotels
NATIONAL FOR TOURIST INVESTMENT
PALESTINE Hotel
TOURIST VILLAGE OF MOSUL DAM

• Industry Sector:

AL-HILAL INDUSTRIES
AL-KHAZER FOR CONSTRUCTION MATERIALS
AL-KINDI OF VETERINARY VACCINES
AL-MANSOUR PHARMACEUTICALS INDUSTRIES
AL-RAFIDAIN FOR CARBONATED DRINKS
BAGHDAD FOR PACKING MATERIALS
BAGHDAD SOFT DRINKS
EASTERN BREWERY
ELECTRONIC INDUSTRIES
FALLUJAH FOR CONSTRUCTION MATERIALS
IRAQI BOTTLING AND CANNING
IRAQI CARTON MANUFACTORIES
IRAQI DATE PROCESSING AND MARKETING
IRAQI ENGINEERING WORKS
IRAQI FOR TUFTED CARPETS
KIRKUK FOR PRODUCING
MESSAN FOR FOOD INDUSTRIES
MODERN CHEMICAL INDUSTRIES
MODERN CONSTRUCTION MATERIAL INDUSTRY
MODERN PAINT INDUSTRIES
MODERN SEWING
NATIONAL CHEMICAL & PLASTIC INDUSTRIES
NATIONAL FOR FOOD INDUSTRIES
NATIONAL HOUSEHOLD FURNITURE INDUSTRY
NATIONAL METALLIC INDUSTRIES AND BICYCLES
NINEVEH FOR FOOD INDUSTRIES
NORTH SOFT DRINKS / NORTH SOFT DRINKS & MINERAL WATER
READY MADE CLOTHES
THE LIGHT INDUSTRIES

• Insurance Sector:

AHLIYA FOR INSURANCE
AL-AMEEN FOR INSURANCE
AL-HAMRAA FOR INSURANCE
DAR AL-SALAM FOR INSURANCE

• Investment Sector:

AL-AMEEN FOR FINANCIAL INVESTMENT
AL-AYAAM FOR FINANCIAL INVESTMENT
AL-BATEK FOR FINANCIAL INVESTMENT
AL-KHAIMA FOR FINANCIAL INVESTMENT
AL-KHAIR FOR FINANCIAL INVESTMENT
AL-QUM'A FOR FINANCIAL INVESTMENT
AL-WIAAM FOR FINANCIAL INVESTMENT
AL-ZAWRAA FOR FINANCIAL INVESTMENT
MESOPOTAMIA INVESTMENT

• Services Sector:

AL-AMEEN ESTATE INVESTMENT
AL-BADIA FOR GENERAL TRANS
AL-MA'MUN FOR GENERAL TRADING
AL-MOSUL FOR FUNFAIRS
AL-NUKHBA FOR GENERAL CONSTRUCTION
AMUSEMENT TOWN
BABIL FOR CINEMATIC PRODUCTION
BAGHDAD MOTOR CARS SERVICING
BAGHDAD PASSENGERS TRANSPORT
IRAQI FOR GENERAL TRANSPORTATION
IRAQI LAND TRANSPORT
KHARKH TOUR AMUSEMENT CITY
MAMOURA REAL ESTATE INVESTMENT

History of the Iraqi Dinar

The Iraqi dinar was introduced into circulation in 1931 and was pegged at par with the British pound sterling. Both the banknotes and the coins were printed and minted in the United Kingdom. The Iraqi dinar replaced the Indian rupee, which was the official currency prior to the British occupation of Iraq in World War I.

From 1931 to 1947, the banknotes were issued by the Iraqi currency board for the government of Iraq and banknotes were convertible into pound sterling. From 1947, the banknotes were issued by the National Bank of Iraq, then after 1954 by the Central Bank of Iraq. After the 1958 coup d'etat, the Iraqi dinar was dissociated from the pound sterling, and pegged to the US dollar without switching its value (at a rate of 1 dinar = 2.8 US dollars). By not following the devaluations of the U.S. currency in 1971 and 1973, the Iraqi dinar rose to a value of US$ 3.37, before a 5% devaluation reduced the value of the dinar to US$ 3.2169, a rate which remained until the first Gulf War. The black market rate was about five times higher ( 1.60 dinars per US $) than the official rate.

After the first Gulf War in 1991, and due to the economic blockade, the previously used Swiss printing technology was no longer available. A new inferior notes issue was created - the so-called Saddam dinar. (Meanwhile, the previous issue became firmly known as the Swiss dinar and continued to circulate in the Kurdish region of Iraq.)

Banknotes issued between 1990 and October 2003, along with a 25-dinar note issued in 1986, bear an idealized engraving of former Iraqi President Saddam Hussein. Following the 1991 Gulf War, Iraq's currency was printed both locally and in China, using poor grade wood pulp paper (rather than cotton or linen) and inferior quality lithography (some notes were reputedly printed on presses designed for printing newspapers). Counterfeited banknotes often appeared to be of better quality than the real notes. These poor quality notes between 1990 and 2003 were often referred to as Saddam dinars. The Saddam dinars were also known as the 1990 - 2003 series.

Meanwhile after a certain period following the introduction of the Saddam dinars, the original Swiss Dinar was actually disendorsed by the Iraqi government. However, despite the fact that it was no longer really legal tender, the old currency (Swiss Dinar) continued to circulate in the Kurdish regions of Iraq and it even retained its value, whilst the more recent Saddam dinar continued to lose value (US$ 1 equalled 3000 Saddam dinars in 1995).

Despite the collapse in the value of the Saddam Iraqi dinar, the highest denomination printed until 2002 was 250 dinars. In 2002, the Central Bank of Iraq issued a 10,000-dinar banknote to be used for larger, and inter-bank transactions. This note was rarely accepted in practice due to fears of looting and counterfeiting. This forced people to carry around stacks of 250-dinar notes for everyday use. The other, smaller bills were so worthless that they largely fell into disuse. This situation meant that Iraq, for the most part, had only one denomination of banknote in wide circulation (with the exception of the northern Kurdish region which still continued to use the original disendorsed Swiss dinar).

Following the deposition of Saddam Hussein in the 2003 invasion of Iraq, the Iraqi Governing Council and the Office for Reconstruction and Humanitarian Assistance began printing more Saddam dinar notes as a stopgap measure to maintain the money supply until an even newer currency could be introduced.
( The Office for Reconstruction and Humanitarian Assistance (ORHA) was the organization established by the United States Government that acted as a caretaker administration in Iraq until civilian rule resumed on June 28, 2004 ).

Then finally, between October 15, 2003 and January 15, 2004, the Coalition Provisional Authority issued the new Iraqi dinar printed by De La Rue using modern anti-forgery techniques to "create a single unified currency that is used throughout all of Iraq and will also make money more convenient to use in people’s everyday lives". The new Iraqi dinar replaced both the original Swiss dinar and the (relatively new) Saddam dinar.

Old dinars were exchanged for new dinars at a one-to-one rate, while Swiss dinars were exchanged at a rate of 150 new dinars for one Swiss dinar.

The new banknotes consisted of six denominations: 50, 250, 1000, 5000, 10000, and 25000. The notes were similar in design to notes issued by the Central Bank of Iraq in the 1970s and 1980s. A 500 dinar note was issued a year later, in October 2004.

Although the value of the new Iraqi dinar appreciated from 4,000 dinars per US dollar, at the time of its introduction, to a high of 980 dinars per US dollar, it has now depreciated to an official exchange rate of 1170 dinars per US dollar (december 2009) as specified by the IMF at the Central Bank of Iraq. However, there is not yet a set international exchange rate, and so international banks do not yet exchange Iraqi dinars.

Immediately after the issue of the new Iraqi notes, there was a lot of speculation in the new Iraqi dinar. Many dinar sellers hinted at 1,000 % profit based on assumptions about Iraq's future economy and oil sales.

However, apart from anything else, Iraq's main export commodity is oil, and this is sold in US$ (not Iraqi dinar) which are deposited in a New York bank account controlled by the Iraqi government. It seems to be a story of two currencies - exports and imports seem to use US$, whilst the Iraqi people use dinars in their daily lives. An international exchange rate will no doubt be decided by the IMF - if and when. Several investment experts strongly oppose speculation in the Iraqi dinar.

Coins

Iraqi coins were introduced in 1931 and 1932 in denominations of 1, 2, 4, 10, 20, 50 and 200 fils, with the 200 fils known as a rial. The 20, 50 and 200 fils were minted in silver. In 1953, silver 100 fils coins were introduced.

Following the establishment of the Iraqi Republic, a new series of coins was introduced in denominations of 1, 5, 10, 25, 50 and 100 fils, with the 25, 50 and 100 fils in silver until 1969. In 1970, 250 fils pieces were introduced, followed by 500 fils and 1 dinar coins in 1982.
Coin production ceased after 1990.

In December 2004, new 25, 50 and 100 dinars coins were introduced (effective 2nd January 2005) by the Coalition Provisional Authority, but the coins were not very popular.

 
 

New Iraqi Dinar Notes : (50, 250, 1,000, 5,000, 10,000, and 25,000)  
Move mouse over thumnails to enlarge and reveal caption:

The 500 dinar note was isssued one year later (see picture after main photo matrix)

 


50 dinar note





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