Is The Iraqi Dinar A Good Investment?

Is The Iraqi Dinar A Good Investment? January 17, 2011

The hype of the Iraqi dinar has been increasing over the last few years.  With just a small investment in the Iraqi dinar, people are speculating that a great return will come as Iraq stabilizes.  One of the most common arguments supporting the Iraqi dinar compares Iraq with the country of Kuwait in the early 1990’s during the Gulf War.  The thought is that the Iraqi currency will spike in value just as Kuwait’s currency did in 1991 after it started to recover from Iraq’s invasion.  The comparison, however, is unfortunately flawed and lacks the common threads that so many are quick to assume.

Kuwaiti Dinar and the Gulf War

Kuwait was invaded by Saddam Hussein in 1990 and suffered massive financial turmoil as the Iraqi army set fire to over 80% of its oil wells. After assistance from the US and other allied forces, the conflict in Kuwait ended and the country was able to restore its oil production in just 10 months.

During the invasion, the Iraqi dinar replaced the Kuwaiti dinar and a large number of banknotes were stolen by Iraq.  After Kuwait was liberated, a new series of the Kuwaiti dinar was restored and the previously stolen notes were demonetized.  The drop in perceived value of the Kuwaiti dinar during the invasion stemmed from the people of Kuwait fearing that their currency would be worthless, so it traded for as little as one KWD for $0.10 USD for a very short amount of time.  The value quickly returned to its previous price and has held strong as one of the world’s most valuable currencies.  For the last two decades, the Kuwaiti dinar has had an exchange rate of one KWD to about $3 USD.

Iraqi Dinar Compared To Kuwaiti Dinar

Iraq, however, is different, as its currency isn’t devalued iraqi dinar

because of a quick invasion that allowed fear to drop its value.  Its currency has been low relative to the USD for the last two decades.  This is primarily because after the Gulf War, the Iraqi government printed new Iraqi dinar that were of less quality than the pre-1991 Iraqi dinar, making them easy to counterfeit.  The rapid printing of these ‘old’ Iraqi dinars caused high inflation and has made the dinar worth pennies on the dollar since the 1990’s.  As a measure to prevent counterfeiting, a new dinar of higher quality was created in 2003 and has been used ever since Saddam Hussein was removed from Iraq.   The new dinars printed in 2003 were set to be equivalent in value to the old dinars printed in the 1990’s.  The thought that the Iraqi dinar will increase just as the Kuwaiti dinar did is speculative and won’t happen because of the same circumstances that we saw in Kuwait.  It has taken years of recovery for Iraq’s currency to improve slightly, while Kuwait’s dinar faced a short term crisis that was quickly controlled.  Furthermore, since the adoption of the new Iraqi dinar, the International Monetary Fund has not set an exchange rate on the dinar, making it unavailable for exchange at banks.

The situation in Iraq is clearly different from that of Kuwait and should not be used to justify the high risk associated with buying Iraqi dinar as an investment.  The newness of the Iraqi dinar coupled with the potential for inflation and the fact that no exchange rates have been declared on the dinar, make it an investment that isn’t measurable in terms of risk.  This purely speculative ‘investment’ preys on the fear of ‘missing out’ on a potentially massive return and for that reason should be viewed as a gamble more than a sound investment.

What’s you opinion on this speculative investment?

Did this answer your question about the Iraqi dinar? If so, hit the +1. :)

"The amount of people deducting tithes from their taxes has gone way down, due to ..."

Is it OK to Tithe With ..."
"church leaders want us to be rich it looks good for the sake of ..."

5 Wrong Reasons To Build Wealth ..."
"Yes. Good debt is money spent for work tools or supplies. Or for emergency repair/purchase ..."

Is There Such a Thing as ..."
"I read through quickly so I may have missed if Mr. Wesley provided for the ..."

5 Bible Verses John Wesley Used ..."

Browse Our Archives

What Are Your Thoughts?leave a comment
  • A good friend of mine told me about this. She and her husband are a part of a group in our town that invested in the dinars. They describe the same thing as this article is saying, but they were not aware of the Kuwait dinar, I’m sure. I was planning to invest as well, but I will have to reconsider after reading this. Many people don’t know about the Kuwaiti dinar, so thanks for posting this.

    • Tim

      I hope you’re able to find all you need as you look into it as an investment. I’m very hopeful that Iraq will continue to improve in the years to come (gradually), but I don’t feel in any way that it’ll be a large spike like Kuwait. The circumstances are different and a decision to invest shouldn’t be made based on that one unique circumstance.

      Thanks for your comment!

  • I hadn’t heard this, but looked at the Iraqi Dinar values a few years ago. There were some amazing spikes and valleys about the time of the invasion. Funny thing was, they happened BEFORE the invasion. Someone knew what was going to happen.

    Much to volatile for my blood. When I want to throw away money, I’ll go to the local mall and throw $20 bills off the 2nd floor and watch people scramble for them. It will be more fun, cost about the same and have the same ROI.

    • Tim

      LOL! let me know when you’re going :) I’ll be sure to come with an open wallet!! hilarious!

  • Invest only what you can afford to loose…..

    If you have been in this game for a while you have heard this before, don’t buy more dinar than you can afford to loose. Why? as Dinar Blog says it’s just the nature of the beast. Dinars are not considered a safe investment, so, don’t put all your eggs in one basket! Keep in mind, higher risk opportunities come with them the chance for strong returns on investment, and the worst is over as far as Iraq’s unrest is concerned.

  • Hi, Tim,

    Good post. Thanks for the research on the Kuwaiti dinar.

    I’ve seen people asking about investing in the Iraqui dinar on Yahoo Answers, but I didn’t realize it had become a big fad/swindle.

    We certainly want Iraq to improve economically, so it becomes a productive nation. That was the reason for the invasion.

    But buying its currency in hopes of getting rich is even worse than the lottery, in my opinion. All money in the lottery is eventually won by somebody.

    Iraq’s security is still fragile. It could still fall apart. Then the only ones its currency made rich will have been the scammers.

    Foreign exchange in every form is a gamble. I do believe investors should diversify in securities that pay an income in currencies besides the US dollar. But otherwise, ordinary people should buy foreign currency only when they visit that country.

    • Tim

      Great points Rick! I appreciate your input here!

  • If you’re thinking about buying the Iraqi Dinar, make sure it’s from a place you can trust. It is absolutely necessary that the company is registered with the U.S. Treasury to sell the dinar and has an excellent record with the Better Business Bureau. You may call them so you could see for yourself if you can build a relationship of trust from the dealer. Scam is there so you should always be cautious. <a href=""Dinar Blog

  • Will

    This post lacks content on the potential gains that could be made when Iraq recovers financially. A country this rich in oil, with help from the US and other foriegn investors to rebuild its infrastructure is bound to see a rise in it’s currency’s value. A small invetment could produce tremendous profits with the current rate being less than a penny to the US dollar, even a small rise to 33 cents to 1 US dollar is a substantial profit. People who are looking for a “sure thing” will not be able to find that anywhere. My suggestion is to look at where the dinar was before the gulf war, the factors that caused its decline and how many of those factors remain today and come to your own conclusion.

    • Tim

      You’re right Will, this post didn’t go great detail about potential gains because it was to primarily address the unfounded comparison between Iraq and Kuwait.

      I agree that the dinar will slowly increase in value over time. We’ve seen it double in price since 1995 (3,000 dinar to $ 1 USD in 95…. approx 1200 dinar to $1 USD today). We’ve also seen Apple stock (AAPL) increase 10 times over that same period, not to mention the Dow Jones Industrial Average more than doubling over the last 15 years.

      I think the dinar will increase in value slowly, but not in a quick turn of events like we saw in Kuwait – because there’s no rhyme or reason for it to jump. Steady improvement in the Iraqi government will make their economy grow. It is true that the dinar has improved since 2003/4 (when Saddam left power), but the annualized rate of return is about 8% (The dinar was 3000:1 in 04 and about 1180:1 today). At that rate, we can expect the investment to double in roughly 9 years as Iraq improves (and if it maintains steady growth in its dinar).

      I don’t want to sound like I’m telling you what to do with your money – that’s not the reason I put this together. :) I just wanted to make sure you were aware of the correlation between Iraq and Kuwait and how the increase Iraq sees in its dinar has not/ will not come the same way the Kuwaiti dinar dipped and spiked.

    • Will

      I agree with you Tim that the Iraqi dinar will not recover as quickly as the Kuwaiti dinar because of the reasons that you mentioned earlier. I disagree though with the suggestion that it will take another 9 years for the dinar to double from its curent value. You mentioned how the dinar has doubled in value since 2004, but that is an unfair evaluation of its increase in value because there was not a stable government,military, and it was still under UN sanctions that have recently been lifted. That is why I(come to your own conclusions) believe that we will see a much faster rise in its value. I dont believe that it will be as fast as Kuwait’s rise, but think about this, about $800 US buys about 1 million dinars at curent value. So with every penny the dinar’s value rises that 1 million dinars you bought for $800 is worth another $10000 US. With a country thats been well over 1 dinar to 3 USD that hardly sounds like a lottery dream to me.

      • Tim

        Thanks for sharing your opinion on the dinar – differing thoughts are welcome here and your input is appreciated! :)

        I’m most impressed that you make the point to come to your own conclusion. This is EXCELLENT advice for anyone reading this post. At the end of the day, it’s a matter of what you’re comfortable with after you’ve evaluated the potential risks and returns of an investment.


  • Thank you everyone for these responses. They were very informative, and definitely provide food for thought when it comes to this kind of investing. I think this type of investing is much too advanced and risky for me right now. I think I will wait until I have more experience, before venturing into foreign investing. Thank you again for the wisdom and insights shared here. It is greatly appreciated.

  • iraqi dinar

    Many people are claiming that the investment in iraqi dinar (IQD) is a low risk high return more surefire, get rich quick scheme. Iraq is one of the largest oil producer in the world. The initial investment is very low. You can get a million IQD for less than a thousand dollars. They are in the midst of war and chaos, but things are bound to change (in a positive way). The Iraqi dinar in Saddam ‘s reign was $ 3.22 per dollar. Soon the value of the IQD will rise and we can make a killing and retire early. Good sales pitch.

  • I’ve been around the forums and chat sites a long time. Never in all my years as an a currency trader and it’s about 20 years, have I ever seen the hype coming down on an investment the way this one is. Buying Dinar is not a scam. But if you listen to the pumpers and believe them then you have been scamed. Every Wednesday new rumors abound in the chat sites from so called guru’s who portend to have inside intelligence from an higher up, source has to remain nameless, that the dinar will revalue at 3+ heck I’ve seen them say as high as 8 dollars! Lies! Someone is making money off the poor people who spend their last dollar or the rent money because of these pumpers. When I bought Dinar I bought with the hope that perhaps I could make as much as 10% on my money. In no way did I ever expect to make 1000X my money. I don’t know why these people aren’t in Jail. If you want to buy Dinar with the possibility that someday you may make a small profit, then fine, but if you are thinking you will get rich, put your money someplace else. That’s why I stick to the one site that only deals in the facts. We may not have the members that the other sites do but that’s ok, at least the information we gleen from articles and documents are factual and not made up by someone with an agenda.

    • Terry G.

      So what is your site so we can check to see what you all are saying. There’s a lot of people out there that have no idea how to find out the correct information or what sources to find it. It would be great if you could share where to go so people could make a more educated decision. Thanks. And NO, I’m not one of the guru’s, just only in name…

    • Roger

      I think we can expect a rate of $ 3+

      Iraq has to exceed the rate of Kuwait which is around $ 3.50

  • ruth sanchez

    I assume this is the one website that Sheila is referring to regarding the one website that has the facts (but not the members.) Finding the truth is really like looking for a needle in a haystack anymore. I would like to know about any other websites that have the REAL scoop, thanks!

    • Hi Ruth,

      I don’t know if they will let me tell you on this site but we’ll see. I rely on the facts regarding this investment and this is one place to get them. The other place is

      Hope this gets to you!


  • The Iraqi dinar is a good investment for all those who can wait for a long period to get a good return from the investment.

  • Hi Daren

    Yes! A really long period of time. The Dinar will redenominate within the next year, my guess is we will see this by the middle of 2012. When this happens we will be lucky to break even, considering the spread and cashin fees. Only after that and if it becomes a global tradeable currency can we hope that over time the value will raise. Both the new currencey and the old will coexist for a time and then it is my guess they will put a time limit for you to turn in your old currency for the new lower denomination bills. JMO

  • I have read all the replies/speculation about the Iraqi Dinar and its future & destiny. My take is, $1,000,000 Iraqi Dinar cost me roughly $700 dollars in 04. This was money I was given extra for being deployed there in support of the conflict. With that said, I have nothing but time. I can wait another 10 or 20 more years if need be If the rate does not climb to at least a mild 2-1 exchange rate; what have I really lost? Only $700 – right? On the flip side, a chance at a million or more return for $700 is a gamble I’m willing to take. The real question is: Why has our government added a trillion or so more toward our deficit investing in Iraq war? Who has taken the biggest risk and/or gamble? Myself, or our government? Who knows what will happen in this world we currently live in? I say make a small investment with no real expectations. Then it becomes only a win – win situation or small lost.

  • The wealth of the wicked is held up for the righteous

  • Stan Romello

    Is there any new information out there about the direction the Iraqi Dinar headed?

    • gene calonge

      I’m with you mike n. A small investment for a possible large return, very worth return it to me. My concern though is that all my IQD I received in Iraq in cash form so when it comes time to cash in, what do I do?? Just go to a bank? Will there be fees taken from it? Or even taxes??

  • Pingback: Iraq Dinar exchange rate »

  • Adding a little to what Mike said, the government invested 6 billion dollars in to dinar in hopes to turn our debt situation around, that sounds terribly promising. They are hoping to strike a deal with the Iraqi Government(Buy a barrel of oil for $35 then trade it to china for $100) yeah it sounds pathetic, but promising for the Dinar. Again, all subject to own opinions.

  • Jonny Bear

    OH! and Gene, you simply go to a NATIONAL bank, they exchange currency, you deposit it in to an account there, they can give you up $10,000 in cash there, but the rest must be deposited, you will want to move that money around 3 times or so to get people off your trail (finding out your personal info and stealing your money)

  • Tim

    Another year and still no movement with the Iraqi dinar. If you’re still curious about the Iraqi dinar, I’d invite you to re-read the article.

  • KT

    Hi Tim,

    As many have already said, there isn’t an expectation of a quick rise in the IQD FX. But let’s look at some facts that I’m not sure if you or someone else have mentioned. The IQD was trading at about $3.22 before UN sanctions although that was with rising inflation (around 1988), after UN sanctions and the onset of the Iraq invasion it was around $1.33 and went as low as $0.33. Post war it emerged to trade at $0.0003 sub sub pennies. Currently its trading $.0008. So, if you got in early (2003) until now (2012) that investment could have potentially made you close to 166% ROI.

    Also in my opinion going the bank route is better than receiving and storing physical currency. Obviously if you store the currency you are at risk of hazards (fire, water, theft, etc etc) and also if they create new currencies you will need to exchange them. Not to mention if you keep in a bank you also gain interest.

    However, that’s digressing from the issue. YOu are probably correct, it will not be another Kuwait. However, why not another Germany? Why not go from $0.0003 to $.03? AS others stated, I can wait…it’s an investment and if Iraq is able to rebound then it will turn out to be a very good one for the amount someone puts in.

  • Christopher

    You guys all need to take a basic economy class at your local college. That and research a little more before you guys say “retarded” things about this investment. Obviously no one has any experience investing or any common sense. It is totally stupid to invest in the dinar. LOOK UP DEMONETIZATION and what happens. K thanks noobs.

  • KT

    Christopher, I would love to have a real conversation but you should humble yourself a bit more. Any real investor knows the difference between theory and practice, if economy 101 and finance theories are so accurate then all your professors would be rich. Additionally, demonetization has little effect if you hold your investment in the countries banks.

  • Gerrie

    Now with all the changes in Iraq, What is your say on the Iraqi Dinar.

  • Rada

    Okay, my head is spinning. How does a private investment group/pumper gain by recommending I invest in the dinar? The money does not go through the group, so how am I being scammed? Just is not hitting me. I read all these posts all over the internet about folks promoting this to scam me, but where is their advantage if I buy on my own, and sell on my own…. when and if, of course?

  • Roger

    There will be a lifting of three zeros from the IQD and 1 dinar will be equal to 86 cents (USA) The question is if the Central Bank of Iraq will revalue up to let´s say $ 3.22 But we will still be very wealthy if they just lift the three zeros from their currency

    I have my money in a bank in Baghdad. I do not like having a lot of bills in my home.

  • Roger

    New bills will be introduced in Iraq.

    50, 100, 250 and 1000 dinar bills.

    After removing the three zeroes from the old bills a coke will cost 1 dinar instead of 1000 and 1000 dinars will then be worth $ 860:-

    This is a tremendous investment and it is still a very big secret for the average citizen. The plan from the Central Bank of Iraq has all along been 2013 I think. So we can expect the RD and RV in January or February 2013.

    That´s my opinion.

  • Roger

    Today Mr Saleh of Central Bank of Iraq told media that there will be a removal of the three zeros of the currency in the NEAR FUTURE

    That is a very positive announcement from official sources in Iraq.

    The long waiting could soon be over.

  • gene Calonge

    Roger, I am intrigued that you keep your Iqd in a bank. May I ask what bank? I feel a little stupid because that never crossed my mind, I mean crap! I could have been gaining intrist for the past 8 1/2 years!? And if they do RD I wouldn’t have to worry so much if my bills were going to be obsolete. If the RV happened and my I’d was already in the bank, I wouldn’t have to do anything, right? Hmm… is it too late to bother now??

  • Roger

    Hello Gene,

    I stumbled over this once-in-a-lifetime opportunity in May this year and found a dealer in England who I phoned and he suggested I transfered my funds to Credit Bank of Iraq in Baghdad.

    He is the only one in the world that is doing this. He has around 110 customers mainly from USA. This guy is very smart and you must have a contract written that you sign and then he takes care of your money and transfer them to his special account in Credit Bank of Iraq. It´a matter of trust but I can tell you he is a down to earth honest englishman.

    So when when it´s time to sell my dinars I just phone him and he will contact the bank in Baghad and transfer my millions to my bank account in Sweden. The funds will arrive to my bank in USD and I think the rate will be very good, like $ 3.22 or more.

    In this way I do not have to handle dinar bills that Forex might refuse here in Sweden. I am confident that there is no problem in USA at Wells Fargo bank but in my country it could be problems coming with millions of bills to Forex. There is of course a security risk walking around with millions of dinars but please be cautious when you walk into the bank.

    I am very secretive about my dinar investment and have not told any body about this at all.

    If you are interested in this please contact this man at

    If the revaluation is delayed another year I recommend this man.

    I think we are very very close to a revaluation in December or January next year.

  • Bo

    One thing I can say about the Dinar is that the US government invested billions in a US embassy in Iraq, they continue to assist with reconstruction and Iraq is still rich in oil, and countries rich in natural resources and with an increase demand from China- it’s just a matter of time before the Iraq Dinar makes an upward movement.

  • gene

    What do we think about the rent activities involving IMF and WTO?