Understanding the Iraqi Dinar Exchange Rate

So what’s your Iraqi Dinar worth?
Why is there a difference in price for different denominations?
What’s the difference between circulated and uncirculated banknotes?
Where do the “exchange rate websites” get their calculations?
How do I know my Iraqi Dinar comes from legitimate sources?

Watch the Understanding Iraqi Dinar Exchange Rate Video

So what is your Iraqi Dinar worth? Well, the short answer is: your Iraqi Dinar is worth exactly what someone else is willing to pay for it. Because the Iraqi Dinar is not openly traded on the world financial markets, there is no set rate for exchange. Many people reference the “online” currency converters from many of the popular currency exchange websites to see what their Iraqi Dinar is worth, but this is not a completely accurate rate—it is a guide for monitoring the trend in the value of the Iraqi Dinar. For this purpose, DinarBanker.com offers a downloadable application which can keep you up-to-date on the latest Iraqi Dinar trend and Iraqi Dinar exchange rates internal to Iraq.

Click here to add the Iraqi Dinar Exchange Rate to your iGoogle Page.
Click here to add the Iraqi Dinar Exchange Rate Tool to your website or blog.

The online rate is often based on the Central Bank of Iraq’s daily/weekly “auction rate” or the “market rate.” The “auction rate” is the rate that the Central Bank of Iraq sells the Dinar to large financial institutions, and the “market rate” is a closer estimation of the “street level” exchange rate among the currency venders in Iraq. Historical rate charts for both the Central Bank of Iraq “Auction Rate” and “Market Rate” over the past 5 years can be found here. HOWEVER, neither of these rates reflect what the Iraqi Dinar is worth—the reason for this is that the “auction rate” and “market rate” are internal Iraq Dinar rates only.

No U.S. Iraqi Dinar dealer is buying directly from inside Iraq and shipping directly to the US. All Iraqi Dinar must flow through neighboring countries and their currency exchange markets before they are shipped to the United States. The primary purchasing locations for U.S Iraqi Dinar dealers are Kuwait, Jordan, and The United Arab Emirates—these are considered External Iraqi Dinar Markets. Ninety-nine percent of the time, the price to purchase Iraqi Dinar from legitimate sources (discussed later in this article) in these markets is much higher than any internal Iraq exchange rates. The prices in these legitimate markets are affected by supply (from inside Iraq) and demand (external to Iraq) for the Iraqi Dinar.



The primary factors affecting the supply flow of Iraqi Dinar across the Iraqi border into neighboring countries include religious/banking holidays, times of closed borders, and times of limited commercial activity or slow-down. The demand for the Iraqi Dinar is primarily affected by international demand based on news (good and bad), rumors, and world-wide investment performance. At times of limited supply and high demand, it is not uncommon for the price of the Iraqi Dinar to surge $100 USD or more over the internal Iraq exchange rates. See the change in value of the new Iraqi Dinar since 2003.

As far as different denominations are concerned, the exchange rate for the smaller denominations can surge well over 100% of the internal Iraq rates due to their limited availability outside of Iraq. The limited availability of the smaller denominations outside of Iraq is generally related to the difficulty in transporting the currency due to its bulk, and at times because of limited printing of the smaller banknotes. Surges in demand for smaller notes because of rumors can also result in exchange rates much higher that internal Iraq rates.

As far as circulated and un-circulated currency are concerned, un-circulated currency is always more expensive. “Circulated” currency simply means the currency may have been used in the Iraqi economy before it was shipped outside of Iraq, and “un-circulated” currency is mint condition currency that went straight from the currency printer to the bank—it has never been used in the Iraqi economy and is in sequential numerical order—very crisp and new. Un-circulated currency is more expensive because it is just harder to get and in higher demand. At times, for whatever reason, the Iraqi Government will limit the release of certain un-circulated denominations which can drive the prices to very high levels.

One worrisome factor affecting the cost of Iraqi Dinar in the Middle East and consequently the selling price at some Iraqi Dinar dealers here in the United States is the original “source” of the Iraqi Dinar being purchased and sold. This factor is one that every potential Iraqi Dinar purchaser in the U.S. should be very aware of. Just like every other place in the world, there are illegal activities (money laundering / terrorist funding) that creep into the currency markets. It is possible for U.S. dealers to get Iraqi Dinar very inexpensively in the Middle East from unsavory sources that may be linked to illegal activities. The Iraqi Dinar from these sources is considered to be “of criminal origin.” The U.S. Iraqi Dinar dealers that chose to purchase their Iraqi Dinar at the submarket prices in order to re-sell the dinar at lower prices in the U.S. run the risk of not only being criminally prosecuted in the United States, but of also supporting illegal activities that may be harmful to the U.S. and other countries.

As a potential Iraqi Dinar investor, it is critical to make certain the U.S. Iraqi Dinar dealer you purchase from is purchasing Iraqi Dinar (for you) from a legal source that is “of non-criminal origin.” Look for a dealer that has been in business for at least several years and has a reputable single source supplier in the Middle East (Kuwait, Jordan, UAE, etc). Check to make certain that the dealer is registered with the U.S. Treasury Department as a Money Service Business and more importantly that they have been successfully (no violations) audited by the Bank Secrecy Act compliance Department of the Internal Revenue Service. There are many dealers who come and go without ever registering with the Treasury Department or without ever being audited to make sure the dinar they sell is of non-criminal origin. Additionally, make absolutely certain the U.S. Iraqi Dinar dealer you are buying from is legitimately registered with their own banking institution. By this, I mean make certain that the dinar dealer has registered with their bank as a Money Service Business selling Iraqi Dinar, and not a dealer of collectibles or some other nonsense.

So, in summary, your Iraqi Dinar is worth exactly what someone else is willing to pay based on supply and demand. Ninety-nine percent of the time, the Iraqi Dinar exchange rates you see on the internet websites and the Central Bank of Iraq’s website are much lower than the actual cost U.S. Iraqi Dinar dealers actually pay. The currency exchange rates like the one posted on DinarBanker.com can be used as a great guide for the trend in the value of your dinar—your dinar is normally worth much more depending on supply and demand outside of Iraq. Finally, make certain that you purchase Iraqi Dinar from a reputable U.S. dinar dealer who has been audited by the U.S. Treasury Department and is properly registered with their own bank as a Money Service Business---these steps will insure that you never have any difficulties with your Iraqi Dinar purchase or the cashing of your Iraqi Dinar.

The information contained in this article was provided by Ty Rhame, the President of DinarBanker.com (the website for Sterling Currency Group) and the Dinar Banker staff.

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