An Iraqi currency reform or “redenomination” planned to be implemented within three years will hopefully result in the re-introduction of circulating coins.
Coins were initially introduced in modern Iraq during 1931 and 1932 when the country was an independent kingdom, and a second series was issued with the establishment of the Iraqi Republic. However, all coin production ceased in Iraq after 1990.
The Coalition Provisional Authority that followed the overthrow of Saddam Hussein in 2003 authorized new coins and bank notes, but the coins proved to be unpopular and were quickly withdrawn. Bank notes printed by the security printing firm De La Rue are still in use today.
On Aug. 7, Arab News reported that Iraq Central Bank Deputy Governor Mudher Kasim said he expected the new currency to be used in the market in three years and that this new currency would have no impact on inflation.
“This will facilitate the payments system ... instead of carrying a lot of money, we will carry less. This is an important reform,” said Kasim.
In a speech given recently in London, Iraq Central Bank expert Mazhar Mohammad Saleh said he estimates the currency reform will result in an exchange of more then 30 trillion dinars valued at more than $26 billion U.S. The most important change, according to Saleh, will be the deletion of the three zeroes from the currency. This will reduce the number of bank notes in circulation, simplifying the cash payment system in Iraq.
In the Aug. 4 issue of Albawaba Saleh explained, “Our problem lies in the timing of the currency exchange, as we need to select a suitable time for implementing the project without obstacles.” No details were given about the coins the central bank hopes to add. Where they might be minted, or if some will be high enough to replace some of the smaller denomination bank notes, is unknown.