Banks That Buy Iraqi Dinar
The value of the Iraqi dinar is unlikely to change before 2026. In March 2021, a spokesman for the Central Bank of Iraq announced that the currency would remain fixed for the next four years. Later that year, another government official confirmed that the exchange rate had been established in government budgets.
banks that buy iraqi dinar
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The value of the Iraqi dinar is fixed by the Iraqi government and does not change, unless the central bank changes the exchange rate. This means that the government decrees the price for sale and purchase of the currency.
Many countries periodically take their currency notes out of circulation. New currency notes are circulated to replace the old ones and the old notes are then considered out of circulation. Typically, national banks will accept the old notes for a brief period of time and distribute only the new notes. Bank of America only accepts foreign currency bills that are in current circulation.
Mutilated currency is any currency that has been ripped, torn, taped, burned or substantially defaced. In many countries, merchants or banks will not accept these bills. Bank of America does not distribute or accept mutilated currency of any kind.
Bank of America, N.A. does not buy or sell Iraqi dinar banknotes or Vietnamese dong banknotes, and currently has no plans to offer this service in the future. You may have read on the internet or heard from friends that Bank of America, N.A. buys and sells these banknotes, or has plans to offer this service. This information is not correct.
The Iraqi government wanted to increase its cash amount with the devaluation, the Iraqi Kurdish news outlet reported in 2020. Any US dollars that the government receives are now worth more in dinars.
In November, the Central Bank of Iraq added four new banks to the list of those banned from dealing in dollars. Two U.S. officials confirmed that the Fed requested the four banks be blocked because of suspected money laundering. They spoke on condition of anonymity because they were not authorized to comment on the case.
New Iraqi Currency Starting on October 15, 2003 a new national currency known as the 'new Iraqi dinar' will begin to replace the existing currency, the 'old dinar', and the currency used in the North of Iraq, the 'swiss dinar'. The new Iraqi dinar will 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.
It is with these principles in mind that we are confronting the many challenges on the economic front that we have faced since the end of the war. Government ministries were largely destroyed by fighting and looting; the Iraqi dinar had depreciated severely and we feared a monetary crisis and hyperinflation; basic economic statistics were non-existent; and the lack of a secure environment restricted commerce and the work that our staff could do in Iraq. We continue to deal with lawlessness, limited communication capabilities, and the loss of technical expertise in government ministries.
A second priority is to promote the establishment of a stable, unified national currency, which is a prerequisite for establishing a vibrant economy. The pre-existing currency situation in Iraq makes this a difficult task. Several currencies circulate widely, including the Iraqi, or Saddam,dinar in central and southern Iraq; the Old Iraqi, or Swiss,dinar in the northern part of the country; and the U.S. dollar. One of our main concerns following the end of the war was that there would be a large devaluation of the Saddam dinar and hyperinflation. In addition, there were concerns about losing control of currency printing facilities, and fears that the currency would cease to serve as an accepted means of exchange.
We took early action to address these concerns. We secured currency stocks and printing facilities, and the military made public announcements that existing currencies would continue to be accepted as means of payment. Although little price data is available to make assessments about inflation, the information we have received on exchange rates indicates that the value of the Saddam dinar against the dollar, while very volatile, has strengthened of late. We stand ready to assist in the implementation of whichever long-term currency reform the people of Iraq choose through a representative Iraqi government.
Strengthening and modernizing the banking sector is also central to achieving economic progress in Iraq. We are still in the early stages of assessing the banking system, but we do know that Iraqi banks were dominated by the state and oriented more toward the fulfillment of political objectives than the provision of economic services or financial intermediation. Our objective is to ensure that the banking sector begins to function in a commercially viable way and that it reflects regional as well as international best practices. For example, we endorse the objective of Iraqis having access to financial products and services that are based on Islamic principles. We are also working with Iraqis to help them create a sound supervisory and regulatory regime in the banking sector. After closing their doors during the war, financial institutions are now beginning to revive. The Central Bank has reopened, as have many of the branches of the largest banks in Iraq.
The potential value of an investment in dinars is often illustrated with references to what happened to the Kuwaiti dinar following the first Gulf War and the German deutschmark following World War 2. These would be good examples except that neither one was a free-floating currency at the time so the value was mostly a function of policy making and official currency management.
In fact, more recent currency history would seem to show that it is more likely that the dinar will depreciate further in the near term. The fallacy that dinar dealers are relying on is that a growing economy will result in a stronger currency. That is not the case. As the recent examples of Venezuela, Turkey and Mexico show; a growing economy is as likely to be accompanied by an inflating (weakening) currency as not.
There is currently no active market for dinars. You can buy them but can you sell them? We surveyed several dealers and found that the difference between what you can buy dinars for and what you can sell them for is approximately 20%. This means that the dinar will have to appreciate by at least 20% before you could sell the currency back at break-even. It is worth noting that since the new dinar was introduced after the U.S. invasion it has only appreciated about 23% total.
The new bolivar now trades at 2.15 to the USD. This redenomination process has been done over and over again in modern history. One of the risks here is the process required to get your hard currency dinars exchanged for potentially a second issue of new dinars at a new value. If there is an extremely illiquid market today there is likely going to be one then as well. It may be something that can only be done in Iraq which could make the process extremely expensive.
As hundreds of people demonstrated near the central bank headquarters in Baghdad on Wednesday to protest the devaluation of the Iraqi dinar against the dollar, which has triggered a rise in prices of imported consumer goods, an informed source told Iran International that representatives from the Iraqi government are scheduled to go to US next month to investigate the smuggling of dollars from Iraq to Iran.
The dinar went into a tailspin against the dollar after the New York Federal Reserve imposed tighter controls on international dollar transactions by commercial Iraqi banks in November to halt the illegal siphoning of dollars to neighboring Iran, which is under tough US sanctions.
The move blocked more than 80 percent of Iraqi bank transfers. Under the curbs that took effect this month, Iraqi banks must use an online platform to reveal their transaction details. But most private banks have not registered on the platform and resorted to informal black markets in Baghdad to buy dollars.
This has created dollar shortages as demand has outstripped supply and accelerated the dinar's descent against the greenback. The Wall Street Journal recently reported that the intensification of pressure on the Islamic Republic has caused the value of Iraq's currency to drop. 041b061a72