The Iraqi Dinar is the currency of Iraq. In 1959, the Dinar was competitive to the US dollar: 1 dinar was valued at US $2.80. However, its value rose in 1971 and 1973, and a dinar was worth US $3.3778.
However, in 1991 after the gulf war and United Nations sanctions, a lot happened and devalued the Dinar.
The Swiss printing method previously used in making money was no longer available. Moreover, newly-made notes were of inferior quality.
The United States placed sanctions on Iraq, affecting the economy. With the need to solve various economical issues, the government excessively printed the dinar notes and distributed them.
This devalued the Dinar quickly, and by late 1995, 1 dollar was worth 3000 dinars. So let’s get back to the question.
Will Iraqi Dinar Ever Revalue
No, the Iraq nation faces an economic crisis. Recently it revalued its currency against the US dollar by 20%. This was done to push their economic cycle and activate their private sector. The crude production cuts and low oil prices are the reasons behind the economic crisis.
More On The Question
Iraq’s government has fears that huge inflation might happen. The inflation will bring them to the ground. It’s also at risk of depleting its foreign reserves.
To avoid this, the government had to cut its expenditure. By the end of 2021, the country estimates the budget deficit to reach ($84 billion) 100 trillion dinars.
In addition, the international monetary stated that it expects a 12% shrinkage of Iraq’s economy. This means the Iraq value will continue to devalue.
Is The Iraq Dinar A Great Investment?
I guess you all understand what investment is. It works the same way as purchasing stocks, bonds, and other currency. In recent years there have been lots of speculations about the Dinar.
Stories and schemes have been emerging about its revalue and how it’s a good investment. This has left many thinking if they should take the step of investing or not.
However, before investing or thinking about it there are several factors that you should consider.
Some of the reputable banks in the United States, such as Bank of America, do not offer forex trading in dinars (specifically Iraqi).
Certain states are against such investments. The known ones are Alabama, Utah, and Oklahoma. They issue warnings about the legitimacy of this investment.
It’s because many scammers have been at the forefront of promoting investments in Iraq Dinar.
The Iraq currency faces a lot of uncertainty about its future. The country’s challenges are a lot and may have both short-term and long-term effects on the currency.
Note that Iraq is in a war, and there’s a possibility the country might be divided into three regions. If it happens, those holding the Dinar with the hope of making profits will be doomed.
So, the Iraq dinar investment can be a scam. The IDQ trade is so common in black markets and not the regular banks.
In addition, the information being published about the Iraqi Dinar is from unreliable sources and cannot be depended on.
Positives About The Dinar Investment
Having oil reserves is a great thing. Iraq has the chance to spring back economically and be stable again.
However, for that to happen, they must have a peaceful country. That is attractive to investors. This is the only thing that will help revive the economy of Iraq.
Iraq Economy And History
Iraq has an estimated population of 39.3 million people. However, the lack of reliable data has made Iraq not be ranked in the 2021 index.
The country is undergoing a lot with some insurgent groups threatening and trying to rule some parts of Iraq.
In addition, political instability and religious groups that cause unrest are major factors affecting Iraq’s economy. As a result, foreigners and local citizens fear investing in the country.
The Iraq government can turn around this economy for the best. However, several things need to be considered first.
Firstly it should work in improving national security and restoring the rule of law. This can be achieved by seeking help and being open to foreign countries.
It should also work on corruption levels and strengthen the financial sector. The government can also partner with other states in a bid to improve its climatic conditions.
The Islamic states took over a vast territory of Iraq in 2014. The government has been at war with the Islamic state since then.
From the look of things, the Iraq government is slowly winning the war. However, the Islamic State remains to continue posing a terrorist threat.
The economy of Iraq solely depends on the oil sector. It’s responsible for about 85% of the government’s revenue.
Another fact is that the war against terrorism has imposed a high cost on the nation’s economy. Loads of money are spent on acquiring machinery and equipping personnel.
Recently the Iran government faced protests. It led to the resignation of Abdul-Mahdi. Al-Kadhimi was appointed as the prime minister of Iraq.
However, the country is expected to carry out its next general election in 2022.
Does Iraq Have The Rule Of Law?
Having an unstable government must affect the rule of law. Iran as a country has fought corruption for centuries.
But, unfortunately, corruption and uncontrolled politics have undermined a lot of rights.
The judiciary has also been politicized and thus weakened. But, again, this has been caused by frequent interference from religious, tribal, and bureaucratic forces.
Without law, corruption increases and leads to reduced investments by both foreigners and locals.
The country has tried implementing anti-corruption laws, which have met a lot of resistance from some officials.
Such individuals perform inhumane acts like money laundering, nepotism, funds misappropriation, and many more.
Is Iraq A Member Of Open Market?
Iraq does not have any form of trade freedom. They are not members of any world trade organizations.
Lack of organization and security are the major things that deter foreign investment and trade.
In general, the country lacks infrastructure and financial systems. However, the government has tried to put regulations that could save the banking system.
However, the frameworks haven’t been strengthened enough to ensure banking stability.
Iraq’s National Debt
Every nation has a fair amount of debt. Therefore Iraq is no exception. Statistics show that Iraq has a national debt of around 132.06 billion US dollars.
It is estimated to have risen to 184 billion dollars by 2026. That’s a huge debt for a country with so many resources.
How Iraq Can Revive Its Economy
The country has the chance of rejuvenating its economy. Despite the country’s current economic and political issues, three areas of focus can bring about growth and stability of the nation.
1. The Agricultural Sector
A country that can produce its food can sustain its people and economy. By reviving the agriculture sector, Iraq will have opened the private sector.
As a result, many industries and opportunities will be created. This includes things such as food processing industries.
It will lead to improved transport, banking, and technology sectors. To improve agriculture, the government should be ready to adopt and develop new agricultural technologies. This will ensure they remain competitive in the area.
2. Maintaining Peace
Lack of peace and the unstable government is the major factor that’s pulling Iraq down. Peace is a strong driver for growth. Iraq should invest in its national security and intelligence to combat religious groups.
While focusing on that, they should improve some basic services like health and education. An educated and healthy population is more productive.
The basic services will also ensure the tranquility and proper functioning of several government institutions.
3. Improve On Its Exports
Iraq is among the countries that have the largest oil reserves in the world. Oil is treasured today, and most countries want to get their hand on it.
However, Iraq should not only focus on oil production, which they do. It’s time they diversify their economy.
Their geographical position is great, and from oil, they can improve their logistics and make it a transportation hub.
4. Development of public transport
Iraq is well-positioned geographically, and its terrain is quite great. Road construction won’t be as daunting compared to other nations.
The development of roads will give the local and small investors the chance to move their goods across the country.
Right now, transportation costs in Iraq are very high. This is because companies offering private mailing are so expensive.
5. Develop the Banking System
By strengthening the banking system, the citizens will have access to loans. The loans can be channeled to various investments.
The statistic shows that only 11% of Iraqis have accounts in their local banks, and 4% can access a loan.
The reason for the lack of proper banking is under development, and most banks are bureaucratically controlled.
The bad thing is that most of their banks lack electronic banking. The process of opening an account is quite lengthy and tiresome, and it involves multiple processes.
In addition, their banks don’t offer credit and debit cards. This makes their banking system more traditional.
The Iraqi Dinar was very valuable. However, several factors such as sanctions, bad economic decisions, political instability, and wars led to its fall.
Throughout the years, the Iraqi government has tried its best to revamp the economy. It has faced frequent pulls from the radicals and Islamic states.
Recently, scammers started pushing information about investing in Iraq dinar. They claimed that the Dinar would soon revalue.
Therefore anyone wishing for huge returns should stock on it. Many people question the legitimacy of the information. This article has the best information on the Iraqis Dinar.