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Friday 16 January 2004
Iraq's new banknotes
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Iraqi banknotes bearing the face of Saddam Hussein ceased to be legal tender on 15th January 2004. New notes carrying pictures of historic Iraqi sites and artefacts have been in circulation since October 2003, and their value has risen sharply.
This report from Mark Gregory: |
Listen to the story
The Iraqi dinar has risen a third or so in value against the dollar since the new banknotes began to circulate. One factor has been the gradual pick up of the Iraqi economy after the devastation of the war. There are simply more transactions taking place, which has supported the value of the currency. And it seems Iraqis trust the new dinar banknotes more than they did the old ones, which featured pictures of Saddam Hussein.
The new notes, printed in Britain, contain sophisticated features to protect against forgery. But the dinar's rise has also been driven by speculators. Large amounts of new Iraqi currency have been smuggled across borders to be stashed in other Arab nations.
Speculators are betting the dinar will rise much further still in years to come as the country make full use of its oil wealth. Cross border smuggling has contributed to a shortage of new banknotes in Iraq. Scarcity has pushed up their value.
Listen to the words
risen a third or so
increased in value compared to the dollar by about 33%
banknotes
pieces of paper money
circulate
here, be used by people
transactions
business deals involving buying or selling
supported
helped to keep it at a high level
forgery
the crime of making and using false banknotes to deceive people
speculators
speculators buy things in the hope of selling them later at a profit
stashed
an informal word for hiding something to keep it safe
oil wealth
financial resources from the sale of oil
pushed up
made it rise higher
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