Now that the situation in Iraq is uncertain and there is no clear prospect of an early end to the war, Washington is already discussing the issue of post-war Iraqi currency. Meanwhile, Iraqi money changers are getting rich by exchanging some dinars for others.
The fact is that two currencies are in circulation in Iraq - dinars of the old and new type. Some are known as 'Saddam dinars'. They appeared after the first Gulf War and feature a portrait of Saddam Hussein. The old-style dinars are the main currency of the autonomous region in northern Iraq - Kurdistan. They are also called Swiss dinars. They have a very distant relation to the small country in the center of Europe: they were printed in England, but for Iraqis it is Switzerland that is associated with everything solid and high-quality.
During the war, the old dinars gained exceptional popularity, and money changers are doing business on this. Banknotes with the president's portrait are in little demand, although the currency situation is too uncertain and everything changes every hour. Even before the start of the Gulf War, the Iraqi dinar was not notable for stability, the banking system collapsed, and hyperinflation began. In 1990, one dinar was worth $3. Since then, the official exchange rate has remained the same, but on the market a dollar now costs 1.5-3 thousand new dinars. At the same time, they give 6-10 Swiss dinars for a dollar, and their price is constantly rising.
US officials have begun to say that Iraq needs a new currency that will be more stable, and expressed the idea that the 'Saddam dinar' will have to sink into oblivion along with the Iraqi president. 'The international community will help the interim administration of Iraq in implementing the new currency policy regardless of whether they decide to introduce a new currency or return the old one, the Swiss dinar,' says American retired general and president of defense company SY Coleman Jay Garner. Making the Swiss dinar the main currency is the first prospect.
Washington is also considering the option of replacing the dinars with US dollars. Although it is obvious that Iraqis will oppose the dollar, the American press writes that this possibility is currently being seriously considered by the US Department of the Treasury. The Washington Post claims that the dollar instead of the dinar is a temporary prospect: they will in any case be replaced by a new Iraqi monetary unit, which, however, will be pegged to the American currency. This means that the currency reserves constituting the material backing of the new Iraqi monetary unit will be placed in accounts of the US Treasury.
The third option, according to the Italian newspaper Panorama, is the introduction of a completely new currency that will fully suit the multinational state. To unite all Iraqi ethnic groups, Washington proposes to go back to the distant past and depict on the currency King Hammurabi, known for creating the code of laws. However, while the war is still ongoing, American experts have time to dig into the history of Iraq in search of creative ideas.