- Personal Finance
Investing in the Iraqi Dinar
One of the most interesting items I've come across on eBay is the Iraqi Dinar. The new series of Iraqi currency, circa 2003, is still very cheap. However, just because it is cheap, does that make it a sound investment?
In this article I'll briefly explain the reasoning behind this opportunity, ways to purchase (if so inclined), and how to monitor its value (current exchange rate).
History of the Iraqi Dinar
The Iraqi Dinar first came into circulation in 1932, replacing the Indian Rupee. For 27 years (until 1959) the Iraqi Dinar stayed pegged to the British Pound at even par. Then, without losing value, the Dinar was pegged to the US dollar at a rate of 1 Dinar = 2.8 dollars. The Dinar rose to over 3 dollars per Iraqi Dinar and remained there until the Gulf War!
In 1991 when the Gulf War was over, a new, inferior quality Dinar was produced. Excessive printing by the government, along with US sanctions made the Dinar devalue quickly. In the mid 90's the Iraqi Dinar was valued at 3,000 Dinar per 1 US Dollar.
NOTE -- pictured right above is the OLD Iraqi Dinar and not in circulation (Saddam era). When on eBay be sure to look for the new Iraqi Dinar (with no pics of Saddam). The old dinar still sells on eBay, why I have no idea....
The new Dinar series started circulating in 2003 (aka post Saddam). It's been in circulation for 14 years and despite the War, has not gone down in value.
The Iraqi Dinar a scam?
There are many articles from credible sources calling the Iraqi Dinar a scam, foolhardy or waste of time and money. Perhaps. I myself do not claim to be any kind of financial professional and am not going to make any kind of recommendation either way. I'm just presenting some pretty interesting facts. You can google the Iraqi Dinar for yourself and come to your own conclusions. I'll say in 2017 that the Iraqi Dinar is still very very cheap, and although it hasn't risen since it has been in circulation, it also hasn't gone down.
At the time this hub was published, the dinar was approx. 1166 dinar per 1 US dollar, or 858 dollars per million dinar. If the Iraqi Dinar were to rise to say just .01 per US dollar, your 25 dollar investment in the 25,000 Iraqi note would then be worth 250.00!
Is investing in the Iraqi Dinar a waste of time?
Future of the Dinar?
The Kuwait Dinar is currently valued over 3 US dollars to 1 Kuwait Dinar. Obviously, Iraq has some serious stabilization to go through, but they are officially listed as sitting on the third largest oil reserve in the world. Some speculate that they in fact may be sitting on THE largest oil reserve in the world and that the current statistical data being used is outdated.... Either way, they're sitting on a fairly large reserve of oil. Prior to the Gulf war, the Iraqi Dinar was trading at 3 US dollars per 1 Iraqi Dinar.
Where can you buy the Dinar?
One of the easiest ways to buy a small amount of Dinar is on eBay. There are many credible sources (sellers with a solid history) and you can test one of them by buying a single 25,000 note for approx. 25 dollars. You can also buy 1 million Dinar at a time, but if you do, you may wish to buy directly from one of the online dealers. My advice is to do some comparative shopping!
Don't Bet the Farm
For me personally, the verdict is still out as to the legitimacy of this investment. There are many credible sources that say it is a waste of time, and they are all financial professionals.
Still, doesn't the fact that Iraq is sitting on such a large amount of oil, and the hope that the region may actually stabilize someday, warrant a little more research? Sure, the post Saddam Iraqi Dinar has not risen in value since its inception in 2003, but it hasn't gone down in value either.
I'm certainly not going to put my retirement into Iraqi Dinars, but my coworkers may get some interesting stocking stuffers this year!