After shifts of former Iraqi regime and emergence of the liberation process, the Iraqi currency has confronted key changes in both sides of its value, design and color. April 9, 2003 is considered as the last day of the Ba’ath regime. During (15/9/2003) and (15/1/2004) New Iraqi currency attained in Iraq from British printing houses, which was better than the previous currencies in a way that was not tranquil to counterfeit than its predecessors. And then it has been distributed throughout Iraq, including the Kurdistan Region. In a new decision of that moment which Paul Bremer issued, the value of the new currency, one Iraqi dinar equal to 150 dinar. In the new edition, there were no coins, the minimum unit is 50 dinars, but it did not fit properly in the market.
“Positive impact of erasing zeros on Iraqi dinar”
The purpose of removing the zeros is to control inflation and rising prices, as well as facilitating buying and selling, especially for large transactions, which reach hundreds of millions and billions, because it creates myriad problems for citizens and traders.
According to studies, 70 countries have up to now removed zeros from their currencies, for instance: Germany removed 12 zeros in 1923, in 1946 Hungarian 29 zeroes and China 8 zeros removed from their currency, in 1960 nineteen countries freed themselves from the zeros. Twenty countries have altered their zeros twice, Brazil counted as a country that more than the other decided on zeros of its currency that was six times. Iran is the last country decided to remove the four zeros from its currency after sharply fall of its currency against the US dollar, however the adjustment was useless due to US economic sanctions on the country.
“Negative impact of removing zeros on Iraqi dinar”
Iraq’s current economic situation is not conducive to removing zeros from its currency, which requires withdrawing its existing cash and printing new currency, to prevent any fraud in doing this. It is unclear when the plan to remove zeros from the Iraqi currency will be implemented for a certain period of time, but I believe that removing zeros from the currency is not feasible, especially after the exchange rate has been a shock to the Iraqi market.
Implementing the process of deleting zeros; firstly requires choosing the suitable time in which the Iraqi economy is stable. Secondly creates an economic environment in a thoughtful manner to… Implement the erasure process, which requires financial and banking measures and decisions made by the financial authorities in the country. Application of the decision is not appropriate at the moment and is considered a serious threat to the instability of the country’s security and economic situation.
In every economic equation, the ratio of profit and loss is calculated, which is why economists warn of mental disorder in the Iraqi market in the event of deleting zeros. Erasing zeros from the currency will not provide anything for the Iraqi economy. Even worse, the government has started within easy and short-term solutions, such as domestic and foreign debt at the expenditure of future generations, which endangers the country’s future and leaves no hope for the future.
The government had to depreciate the dinar against the dollar to cover its shortage and support domestic production, which has fallen abruptly in recent years. Iraq’s economy is seeking stability more than ever. Therefore, the Iraqi economy will certainly not withstand another shock after all the shocks and crises, if this is done, it has only one goal, which is to hit the deal on both sides by some of authorities.