Have you heard the rumors about the Iraqi dinar? Week in, week out, we receive at least 2-3 questions about this. The ‘word on the street’ is that the Iraqi government is set to “increase” the value of the dinar, essentially re-peg it against the dollar by 2, 10, even 100 times its current value.
In other words, rumor has it that if you’re sitting on $1,000 worth of Iraqi dinar, that after the re-pegging, that same dinar will be worth up to $100,000, practically overnight.
I hate to be the bearer of bad news, but it just isn’t true… and I wanted to take some time today and lay these rumors to rest since it’s such a popular question within this community, and I know that there are some people scrambling to pick up dinar.
In 2010, the Central Bank of Iraq did announce plans to ‘redenominate’ the Iraqi dinar, effectively chopping off a few zeros from the nominal value of the bank notes. But the actual value in US dollar (or euro, gold, oil, wheat, etc.) terms would remain unchanged.
Any potential upside in the Iraqi dinar is in becoming a free-floating, market based currency. Many currencies in the Middle East including the United Arab Emirates dirham and Saudi riyal are pegged to the US dollar. So is the Iraqi dinar.