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Is the Iraqi Dinar Investment a Wise Investment?

What does it mean to “invest” in the Iraqi dinar? Simply put, it’s the same as investing in any other currency. You buy a certain amount of Iraqi dinars (IQD) by paying the equivalent amount in US dollars (USD).

As with buying stocks, bonds or other currencies, when you invest, you buy dinars at a given price and then expect the price to rise. The real question, however, is not just “can you” invest in this particular currency, but rather “should you”? Although Iraqi dinars can be useful to those living in or near Iraq, there are many reasons not to invest in this currency.

Key points to remember

  • The Iraqi dinar is the currency of Iraq and can be exchanged for US dollars.
  • Hopes that the Iraqi economy could recover from civil and regional wars have led to speculation that the Iraqi dinar could appreciate against the dollar.
  • However, major banks and brokers do not offer trading in the IQD/USD pair, and transactions are made through currency exchanges, which charge high fees.
  • The value of the Iraqi dinar is set by the Iraqi government.
  • The Iraqi currency faces many challenges and many uncertainties in the short and long term.

Understanding the Iraqi Dinar

After the 1991 Gulf War, Iraq’s economy languished due to UN sanctions and official corruption. As Saddam Hussein’s government struggled to contain inflation and speculation, the Iraqi dinar fell from its pre-war value of $3 to less than a penny in 1993. In 1994, the inflation rate was over 448%.

When the US-led coalition overthrew the Iraqi government in 2003, the old dinars continued to circulate until the caretaker government launched a new currency the following year. New dinar banknotes were printed in the UK and exchanged at face value for Saddam’s dinars.

The fact that the new government was backed by several world powers raised hopes that the Iraqi economy would soon improve, especially after the economic isolation the country suffered in the 1990s. In 2007, the Fund International Monetary Fund (IMF) approved the Iraqi government’s anti-inflationary measures, noting that “the central bank of Iraq has raised its key interest rates sharply and has allowed a gradual appreciation of the dinar”.

As the Iraqi economy began to recover, many speculators began buying large amounts of Iraqi dinars, expecting the currency to continue rising. Some pointed to the rise of the Kuwaiti dinar after the Gulf War as evidence that the Iraqi dinar could experience similar success. Meanwhile, several US regulators have warned against scammers selling dinar “investments” at inflated rates and fees.

At the end of 2020, the Iraqi government announced a devaluation of more than 20% of the Iraqi dinar, in order to fill a liquidity shortage. The act prompted public protests in a country that was already struggling due to the global pandemic.

The Iraqi dinar is not traded on the global foreign exchange market. This means that the only way to “invest” in dinars is through high-fee money changers or the black market.

Advantages and disadvantages of investing in the Iraqi dinar

There are a few reasons to be optimistic about the future of the Iraqi economy. Iraq holding 11.7% of the world’s population oil reserve, it has the potential to rebound and establish itself as a stable economy. This will require a peaceful and promising business atmosphere to build investor confidence and revive its economy.

But that doesn’t necessarily mean that buying dinars is the best way to bet on the Iraqi economy. On the one hand, the Iraqi dinar does not float freely: the exchange rate is fixed by the central bank, which means that the currency is unlikely to experience rapid changes in value. In contrast, a more traditional investment vehicle, such as Iraqi stocks, could offer returns even if the value of the dinar remains unchanged.

Moreover, the volume of legitimate transactions is extremely low; IQD is not traded on the global forex market, and only a handful of Middle Eastern banks are willing to trade it. If you need to buy Iraqi dinars, you can only buy them at certain exchange offices, which may or may not be legally registered. These brokers can charge up to 20% for such trades, eroding the profit potential even for short-term trades.

But perhaps the biggest concern is the number of scams and frauds involving the Iraqi dinar. As early as 2011, several US state regulators warned against forex “brokers” promising high returns, while charging high fees for hard-to-sell dinars. This scam proved particularly popular after the 2016 election, amid rumors that Donald Trump would somehow skyrocket the Iraqi currency. (The Iraqi dinar reached its highest value against the US dollar in January 2016. At that time, the dinar was trading at around 1,090 dinars to 1 USD.

Advantages and Disadvantages of Investing in Iraqi Dinar


  • Iraq has large oil reserves that could support economic growth.

  • For those who live or work in Iraq, buying dinars might be a suitable investment.

The inconvenients

  • IQD has very little legitimate trading volume.

  • The IQD exchange rate is fixed by the central bank and does not float with the market.

  • Many scam artists have offered overpriced IQD “investment packages” to overseas speculators.

  • IQD does not trade on global forex markets, which means the only way to buy it is through high fee silver exchanges or certain Middle Eastern banks.

How much is the Iraqi dinar worth?

One US dollar was worth 1,458 Iraqi dinars, as of August 2, 2022.

When will the Iraqi dinar be revalued?

The value of the Iraqi dinar is not expected to change until 2026. In March 2021, an Iraqi central bank spokesperson 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.

Who sets the IQD exchange rate?

The value of the Iraqi dinar is set by the Iraqi government and does not change unless the central bank changes the exchange rate. This means that the government decrees the selling and buying price of the currency.

The essential

The long-term evolution of Iraq, of its economy, and therefore of the exchange rate, is a continuous and uncertain bet. If you hold Iraqi dinars and do not live in or near the Middle East, the currency is difficult to exchange and does not earn interest. Although it is possible that the dinar could rise in the distant future, there are many other investments with lower risks and higher rewards. When Iraq’s very survival is at stake, currency revaluation is unlikely to be on the agenda.

Moreover, forex currency trading is always risky, as external factors on an international level are difficult to control or predict. Unless they negotiate on regulated markets or through regulated agents, traders and investors should exercise extreme caution when dealing in Iraqi Dinar or similar currencies.

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