Revaluation of Iraqi Dinar considers as a hot favourite topic since the second gulf war has begun. Due to war conditions in Iraq, Iran and Kuwait, a significant devaluation in Iraqi Dinar has been observed.
A glimpse from history:
If we turn the pages of history, we will come to know that in 1990; US$3.5 was equals to 1 Iraqi Dinar. The reason for that strong position was the stable political and economic conditions along with the natural gift of oil to the country.
In this Era, where Iraq is a conflict-ridden country having severe type of political, social, economic and security issues the value of its currency has got down to its worse limit which is 1183.50 IQD = US$1.The credit rating of Iraq has also turn down to B+ and the investors are feeling hesitant in investing in this economy due to its prevailing political and security risks.
Reasons for Devaluation :
Major reason for this devaluation is that the political leaders of other regions such as Kurdistan were not ready to cope-up with the government and native forces to improve the situations in the country. Along with that the violence created by Daa’ish is also a cause of this miserable situation. In last some months there is an enormous decrease in the export of oil as well.
But in spite of all these conditions, different analysts and people are hopeful for the revaluation of Iraqi Dinar. According to Fitch analysts it is the diamond in the rough. They feel that this economy has long-term potential of growth. The evidence to this fact is that the stock market of Iraq is working with full stream and as per the news from recent days the export of oil has been increased by 3 million barrel per day, which is a positive sign for the revaluation of Iraqi Dinar .Another sign of improvement is that the Armed forces and security activists are now working hard to get rid of these security barriers. As well as the 99% of oil trade is under the control of Iraq now. Since 1990 Iraq set free from the obligations of UNO, that’s why it is a plus point for the trade because we can make trade contracts in any place or with any country without any trade barrier.
Iraqi authorities have taken some courageous and good measures, such as gradual increase in the price of oil in international trade as well as for the revaluation of Iraqi Dinar they are trying to take the control over the inflation and foreign trade balance.