When Will Iraqi Dinar Values Increase?

Many soldiers and contractors returning from the Middle East have brought back millions of Iraqi dinar upon speculation that the currency will soon explode to its pre-war value. Some even dare to hope that it will again reach the levels it enjoyed pre-Gulf War. Currently, 1 Iraqi dinar is worth about 1/10 of a U.S. cent. Experts expect that it will increase gradually as Iraq is stabilized, within the next three to five years, and will remain in a range between $.01 and $1.25 versus the U.S. dollar. Still others argue that it will happen much more quickly, as soon as one to two years, as the Iraqi oil fields are rebuilt and again begin to produce massive revenue for the country.

The dinar has already increased value 25% since the end of large-scale fighting in the country. Iraq’s currency is tied very tightly to the geopolitical atmosphere in the country, and there are many reasons to be hopeful in this regard:

• The United States allocated over $18 billion for reconstruction and improvements to infrastructure along with a continuous support structure. It has forgiven Iraq’s debt to the United States, and offers the backing that will help Iraq develop its market economy, (valued at $70 billion a year) given its vast oil reserves and educated population.
• Iraq has oil reserves of $10 trillion, second only to Saudi Arabia. They have signed tentative agreements with the world’s biggest oil companies in the world to get the oil flowing as quickly as possible.
  Many of the world’s most advanced nations are currently working in Iraq, building commercial enterprises, and intending to make it a base of operations.
• Money has been promised by many countries for help with restoration projects and infrastructure improvements, including: electricity, clean water, road projects, internet systems, phone systems, and health services. Much of this work is already taking place.
• Iraq is setting up agreements with neighboring countries for exports of oil reserves to quickly begin to produce revenue.
• Iraq’s new government set up a monetary system that is spurring foreign investment, which is essential to building a strong market economy.
• The Central Bank of Iraq was set up totally independent and not run by leadership in Iraq, in much the same way as the Federal Reserve operates in the U.S.
• Iraq has opened new stock and bond markets, and they are thriving while pushing listed Iraqi stocks drastically upwards.
• Real estate is booming in Iraq, as people are permitted to buy where they couldn’t before and depressed prices are spurring sales. Citizens have more money than they’ve had in many years and are taking advantage of the market.

Iraq, with the help of the United States and other allies, is moving swiftly in the right direction, and will bring the Iraqi Dinar from catastrophic lows to a globally recognized currency with world value, within the next few years.

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