The Iraqi dinar was first introduced in 1931, and it was later replaced by the British pound. It was also pegged to the US dollar. It was equaled to the US dollar of $4.86 between the years 1932 and 1949. Between 1949 and 1971 is was equal to the US $2.80 after being devalued in 1949.
The Iraqi dinar was valued at $2.80 until December 1971, and not too long after the inflation of the US dollar in 1973, it was valued at about $3.39. The Iraqi dinar remained unchanged until the war of Iran-Iraq. In 1982, Iraq devalued the Iraqi dinar by 5%, which equated it to the US dollar that was worth $3.22.
In order to take a step towards independence in 1959, Iraq officially uncoupled the Iraqi dinar from the pound. However, the Iraqi dinar remained at equal worth to the pound until the currency unit of Britain was devalued for the second time in 1967.
The Iraqi currency is valued to be worth about 1,191 Iraqi dinar to 1 U.S. dollar. Whether you are a foreign exchange market investor or a local investor, if you stay on top of the current trends you can maximize your return. A reevaluation can occur once Iraq has economic and political stability. However, it seems that Iraq is moving in the right direction. The Iraqi election recount in 2018 was completed, and this helped to pave the way for Iraq to form a new government. This is a huge milestone, and after many of the years following the withdrawal of U.S. troops from Iraq, the United States has helped to improve Iraq’s relations with Saudi Arabia as well as with international banks.
A Revaluation Defined
A revaluation is a change in the official exchange rate of a currency, and it is typically a change in the exchange rate compared to other major world currencies. It can also be compared to another baseline measure such as the price of oil, gold, or wage levels in the issuing country.
Revaluation and the Iraqi Dinar Revalue is determined by an official authority in the country, which is typically the government or the central bank of the country. Sometimes it is a combination of the two. Revaluation can increase the value of the currency relative to the baseline, or it can decrease the value. When the value is decreased, it is considered to be devalued.
Devaluation happens quite frequently even among world currencies such as the U.S. dollar, the yen, the euro, and the British pound. This is done on a fairly informal basis meaning that the central bank may increase the value of a currency, usually by increasing interest rates, to attract foreign capital. They may weaken the currency to increase exports and to decrease imports, which will help to improve capital that flows into the country.
There is some debate as to whether it is a wise choice to invest in the Iraqi dinar. There are many different factors that can affect the outcome of your investment. Civil war, regional fights, and even the western countries that are staying away are all major concerns to Iraq. There is also the threat that the country may split into three separate regions. If that were to happen, investors might never see that payday that they were hoping for.
Iraq is backed with oil reserves and has the potential to spring back and even establish itself as a more stable economy. It did manage to bounce back after its eight-year-long Iraq-Iraq war after all. But in order to promote investor confidence, it is important to remain peaceful in the country which will also help to revive its economy and to bring back the IQD forex rate to more realistic levels.
Revaluation can also be confused with redenomination which is two entirely different things. Revaluation is the calculated adjustment made to a country’s official exchange rate, and it is relative to a specific and chosen baseline such as gold or USD. Revaluation results in the currency becoming expensive against the base currency and change the purchasing power of that currency. Redenomination is completed in case of high inflation by old high-value notes that are made equal to new small value notes.