By Kathleen Moore
October 13, 2003
Prague, 13 October 2003 (RFE/RL) -- U.S. President George W. Bush has hailed the launch of Iraq's new currency as an important milestone for the Iraqi economy.
In his weekly radio address on 11 October, Bush said the new currency will help unify Iraq, which had previously used two different versions of the dinar in different areas.
"For more than a decade, different areas of Iraq have used two different versions of the dinar, and many of those notes were counterfeit, diminishing the value of those that were genuine. The new dinar will be used throughout Iraq, thereby unifying the economy and the country. The new currency will have special features that will make it difficult to counterfeit," Bush said.
Bush also hailed the new currency as a sign of economic promise. "Following World War II, it took three years to institute a new currency in West Germany," he said. "In Iraq, it has taken only six months. And the new currency symbolizes Iraq's reviving economy."
Iraqi officials began burning the old money in August, after coalition leaders announced they would change the roughly 4 trillion dinars in circulation.
The new bills no longer bear the image of ousted Iraqi leader Saddam Hussein and will begin circulating on 15 October. It is hoped the change will help restore monetary stability in a country long used to having Hussein's regime fuel rampant inflation by printing banknotes at will.
In Baghdad today, Iraq's Central Bank unveiled the new notes for the first time and burned thousands of old dinars in huge underground furnaces.
The central bank governor's deputy, Ahmad Salman Muhammad, said the bank has already absorbed a "good portion" of old banknotes still in circulation and will carry on burning old notes in the coming weeks. "All the money [which is] on the market now, we are going to burn all the money we have issued before," he said.
The new notes are printed in England and come in six denominations instead of the single 250-dinar denomination used currently.
Instead of Hussein, the new bills bear pictures of ancient Babylonian ruler Hammurabi and a 10th-century Iraqi mathematician, Abu Ali al-Hasan ibn al-Haytham.
They will be exchanged one-for-one with the Saddam dinar, which circulates in most of the country, and at a rate of 150 new dinars to the so-called "Swiss dinar," which is used in the northern Kurdish areas. They are also convertible into dollars, at a rate of around 2,000 to the dollar.
The changeover is to last three months, which Central Bank Deputy Governor Muhammad said is enough time for people to change their cash. "I think the time, three months, is enough and even if it is not enough we can do it [for] like two or three other months," he said.
It is hoped the security features will make the new notes much harder to counterfeit -- a major problem with the currency up to now. Forgeries circulated easily since Iraq had no record of how much currency it had printed in the first place.