The Central Bank of Iraq issues the nation’s currency, Iraqi dinar. Many currency trading firms sell dinar to long-term investors who want to buy dinars because of the currency’s low foreign exchange rate to United States dollars. In this article, we will look at how investors stay informed about dinar news and also briefly outline the history of the currency and the country.
THE DINAR CHRONICLES: 5 HISTORICAL INTEL FACTS INVESTORS NEED TO KNOW ABOUT THE IRAQI DINAR
- Investment in the Iraqi Dinar Currency
- The Ottoman Empire Once Ruled Iraq
- The British Seized Iraq in World War I
- The British Dragged Iraq into World War II
- The Rise and Fall of Saddam Hussein
Let us now look at both the history of the Iraqi dinar and Iraq in more detail. Here are two pieces of interesting historical research to give you the backstory of Iraq to put the unfolding dinar chronicles into perspective.
A BRIEF HISTORY OF THE DINAR
The word “dinar” is not unique to Iraq. Many Middle Eastern countries use this name for their currency, as it refers to the caliphate of Damascus who issued Arabic gold coins around the 1630s. A caliphate was an Islamic state under the leadership of a caliph. The Muslim population regarded this Islamic ruler as a political and religious successor to Mohammed, the Islamic Prophet.
Since the dinar is a popular name for many currencies used in the Middle East, people often assume it must have Arabic, Persian, or Turkish roots. However, the word itself originated from the Latin word for money, “denarius.” The Iraqi Dinar once ranked among the most valuable currencies in the world because Iraq once used to be a country with enormous wealth. In fact, the old dinar was worth as much as $3.20 before Hussein began his unprovoked wars against Iran and Kuwait.
The United Nations trade embargo came in response to the hegemony of the sovereign Arabic state of Kuwait and the Gulf war led by a US-led military coalition. This caused the Iraqi dinar to plummet in value. By August 2002, an Iraqi dinar was worth less than a penny. Today, according to a foreign exchange currency converter, 1 Iraqi Dinar (IQD) is only equal to 0.00084 of a United States Dollar (USD).
5 HISTORICAL INTEL FACTS INVESTORS NEED TO KNOW ABOUT THE IRAQI DINAR
1. Investment in the Iraqi Dinar Currency
Is it possible that the Iraqi dinar will rise to the rate it used to be in the 1980s? While we can only speculate how much the rate will change, we have two good reasons to believe the dinar will revalue.
The first is that the Bank of Iraq is doing all it can to restructure Iraqi debt and restore international trust in the Iraqi currency and its market economy.
The second is that both the newly elected Prime Minister of Iraq and President of Iraq want to end corruption in Iraq—not only corruption within the Iraqi government but also corruption by international companies exploiting the Iraqi oil industry. The new government plans to reconstruct the oil industry because boosting oil sales will restore the country’s financial assets faster than developing any other Iraqi industry.
Since the Arab Gulf region has as much as 65% of the oil reserves of the world with Iraq contributing 12% to this total, the proven oil reserves in Iraq will be money in the bank. Iraq has the potential for turning oil into cash once it can get its oil fields back up to par. When this happens, Iraq will produce as much as 2 billion barrels a year. If each barrel sells for $100, then Iraq could earn $200 billion a year.
No doubt, many other economic benefits will also accrue once the people prosper and build businesses. For example, the personal income tax rate will rise from its present low level of 15%. By comparison, the personal income tax rate in the United States is 39.6%, which is the average for a developed country.
2. The Ottoman Empire Once Ruled Iraq
Iraq once commanded an illustrious position on the world stage. In ancient history, it was part of the lands historians dubbed the “cradle of civilization.” Great empires like the ancient Sumerians and Babylonians and Assyrians rose and fell between the lands straddling the Tigris and Euphrates River. After the dust of the war had settled, Persia ruled from Baghdad to the Euphrates valley, holding on to their conquered lands until the Middle Ages.
In 1638, the Ottoman Turks became an unstoppable military force and conquered lands stretching from the Tigris Valley to the Euphrates Valley. At its height, the Ottoman Empire circumscribed southeastern Europe up to the city gates of Vienna; the Middle Eastern lands of Iraq, Syria, Egypt, and Israel. It also ruled most of North Africa, spreading as far as Algeria in the West, as well as most of the Arabian Peninsula.
The Ottoman Empire ruled Iraq during two time periods, and they called the country “Ottoman Iraq.”
Suleiman the Magnificent of the Ottoman Empire captured Baghdad in 1534 and ruled Iraq until 1704. To make it easier to administer, he divided Iraq into four provinces, called “eyalets.” He segmented Iraq into the Baghdad Eyalet, the Shahrizor Eyalet, the Basra Eyalet, and the Mosul Eyalet. A remnant of this period of history still surfaces in Iraq today in the form of the deep division within Islam between the Shia and the Sunni. This rift emerged during the Safavid-Ottoman conflicts early in Iraqi history. From 1623 to 1639, the Ottoman Empire battled with Safavid Persia for control over Mesopotamia.
Although Iraq freed itself from the yolk of the Ottoman Empire briefly, the Ottoman Turks again seized control in 1831. The Ottoman Empire now organized Iraq into different regions, called “vilayets,” segmenting Iraq into the Mosul Vilayet, the Baghdad Vilayet, and the Basra Vilayet. Many of these regional names may sound familiar. For instance, you may have heard about the “battle for Mosul” between Iraqi or coalition forces against the Islamic State of Iraq and Syria (ISIS) militants, which resulted in the death of about 10,000 people, mostly civilians, from October 2016 to July 2017.
3. The British Seized Iraq in World War I
From July 1914 to November 1918, World War I rearranged the hierarchy of the dominant geopolitical powers and changed the map of the world. Contemporaries called the First World War, “the war to end all wars,” because it mobilized over 70 million soldiers.
The Middle Eastern region of WW1 called the “Mesopotamian campaign,” was a series of battles between the British Empire and the Ottoman Empire. After forcing the Ottoman Turks to retreat, Britain seized Iraq from the Ottoman Empire, which had ruled Iraq for a long time period—from the middle of the 16th century to 1916.
In 1920, the League of Nations granted Britain a mandate over Iraq. The British government installed a Hashemite monarchy, and Iraq remained a British protectorate for 17 years. Iraq gained independence after the League of Nations admitted it as a member. On October 3, 1932, Iraq celebrated its independence.
4. The British Dragged Iraq into World War II
Although Iraq gained its independence from Britain, British influence continued because the Iraqi government continued to rely on Britain for economic and military aid. This dependency irked the population and led to many failed revolts against British-influence peddling.
From 1939 to 1945, World War II was underway. Iraqi revolutionaries once again tried to break away from Britain. This time, Iraq tried to align with the Axis forces. British military intervention crushed the revolutionary movement and coerced the Iraqi government to support the Allies. It was not until 1958 that the Iraqi people finally overthrew the British-controlled Iraqi monarchy. Military and civilian governments tried to rule until Saddam Hussein eventually usurped power.
5. The Rise and Fall of Saddam Hussein
In 1976, General Saddam Hussein was a strongman of the Iraqi government. Although not the formal head of government, he exercised far more power over the government than the Iraqi constitution allowed. As a de facto leader, he consolidated his influence over the Ba’ath party and the Iraqi government. In 1979, he formally ruled Iraq as a dictator.
For 30 years, he ruled with an iron fist. His statue stood outside every village and his portrait glowered over every government office. The country appeared to name almost everything after him to win his approval—mosques, cities, suburbs, and airports. Iraqi poets invoked his name during public gatherings, writing lyrical poems about how the invocation of his name alone was enough to stimulate Iraqis to aspire higher. Ethnic pogroms were common under his rule, and his tyrannical regime executed people reported to have made jokes about him.
Hussein appeared infallible to the Iraqi people, even after two military misadventures against Iran and Kuwait. It was not until a US-led coalition in 1991 that Hussein fell from power.
During the occupation of Iraq, he eluded American forces for eight months. After the occupying American soldiers brought him to trial, he denied that Iraq had lost the Gulf War and bragged about a crushing defeat over the United States. He even insisted that the Iraqi judge grant him immediate immunity because he was still the President of Iraq. Throughout the trial, he remained unapologetic for all his crimes against humanity, including raining poisonous gas over Hajaba, killing 5,000 Kurdish villagers. After the trial, the Iraqi court condemned him to death by hanging.
HOW TO KEEP INFORMED ABOUT DINAR NEWS
If you are investing in the Iraqi dinar or plan to invest at some future date, then it’s important for you to stay alert to the foreign exchange rates, economic news about Iraq, and any information suggesting that the Iraqi dinar will revalue. While you could do this by reading Iraqi news websites or visiting the website of the Central Bank of Iraq, it’s often tedious and time-consuming to sort through relevant Iraqi currency news.
Fortunately, many blogs, like Treasury Vault or The Dinar Chronicles have done the heavy lifting for you.
While the Dinar Chronicles Blogspot gives excellent updates, while trying to offer the latest dinar coverage, we feel that the dinar chronicles intel does not go far enough in helping readers get an in-depth understanding about the cultural, political, and economic changes shaping the history of Iraq and the destiny of the Iraqi dinar.
At Treasury Vault, we take a slightly different approach to providing our readers with updates about the Iraqi dinar. Like the Dinar Chronicles, we talk about the Iraqi dinar and try to offer the later dinar intel, but we also talk about other long-term foreign currency you should consider in addition to the Iraqi dinar IQD. We also review what’s happening in the reconstruction of Iraq’s economy and in the global currency markets, as well as offer editorials on the Iraqi dinar to help you understand the potential for the Iraqi currency to revalue.
We don’t rely on a guest post or unsubstantiated tweet to provide our US and global readers with investment advice and dinar news. Instead, we have backgrounds in finance and historical research. We owe it to you, our readers to get the latest updates, dinar recaps, and commentaries. We stay up to date on global currency trends and write articles about how a country’s foreign exchange rate and spot exchange rate work. They are in the best position to read the signs that suggest a possible Iraq dinar revaluation (RV).
HISTORICAL FACTS INVESTORS NEED TO KNOW ABOUT THE IRAQI DINAR
With a better understanding of the history of Iraqi dinar, you are better equipped than most other dinar investors who only focus on rumored dinar intel. You will also be in a much better position to interpret the value of the information you find in popular dinar blog posts. While many people are distracted by the question, “Did Donald Trump buy Iraqi dinar?”, the best investing decisions come with expanded knowledge about the history of Iraq. Keeping a close eye on Iraq’s history will help you interpret the significance of the latest Iraqi news.