The iqd is the official currency of Iraq, issued by the Central Bank of Iraq. It is subdivided into 1,000 fils and used in all domestic financial transactions, from street markets to government contracts.
Introduced in 1932, the iqd replaced the Ottoman lira and has undergone multiple redenominations due to inflation. The current version, adopted in 2003 after the fall of Saddam Hussein's regime, features Arabic script and national symbols like the Al-Rashid Mosque and the Tigris River.
Exchange rates fluctuate based on oil revenues, political stability, and central bank policy. As of June 2024, 1 USD equaled approximately 1,450 iqd, though unofficial black-market rates often differ.
In Iraq, the iqd circulates through banks, shops, and informal markets. Most urban centers accept cash, while digital payments remain limited. Mobile wallets are growing in popularity among younger users, but cash remains dominant.
Prices in cities like Baghdad, Mosul, and Basra are quoted exclusively in iqd. A meal at a local restaurant costs between 30,000 and 60,000 iqd, depending on location and quality. Public transport fares average 1,000 iqd per ride.
Despite widespread use, trust in the iqd has declined during periods of high inflation. In 2022, inflation reached 14.8%, eroding purchasing power. The Central Bank of Iraq responds with interest rate adjustments and foreign exchange interventions.
The iqd uses both paper notes and metal coins. Notes come in denominations of 100, 250, 500, 1,000, 2,500, 5,000, and 10,000 iqd. Coins exist in 1, 5, 10, 25, and 50 fils, though they are rarely seen in circulation due to low value.
| Denomination | Common Use | Physical Features |
|---|---|---|
| 100 iqd | Small purchases | Green, portrait of Mustafa al-Kazemi |
| 1,000 iqd | Everyday shopping | Blue, image of the ancient city of Ur |
| 10,000 iqd | Large transactions | Purple, depiction of the Great Ziggurat |
Security features include watermarks, microprinting, and color-shifting ink. Counterfeiting remains a concern, especially with lower-denomination notes. The Central Bank of Iraq issues updated designs annually to combat fraud.
Some assume the iqd is interchangeable with the U.S. dollar or euro in Iraq. This is false. While foreign businesses may quote prices in dollars, legal tender must be paid in iqd. Foreign exchange is regulated and requires authorization.
Another misconception is that the iqd is backed by oil reserves. While Iraq's economy relies heavily on oil exports, the currency is not directly pegged to oil. The Central Bank manages foreign reserves independently, though oil revenue influences monetary policy.
A lesser-known fact: the iqd was briefly replaced by the "Iraqi pound" in 1942 during British occupation. The original name was restored in 1952. This historical shift shows how currency identity can reflect political control.
Consider a consumer in Baghdad purchasing a smartphone priced at 12 million iqd. This amount equals roughly $8,275 USD at the official exchange rate. However, the actual cost depends on where the purchase occurs.
At a state-owned electronics store, the price is fixed in iqd. The buyer pays 12 million iqd using cash or card. At a private market stall, the seller may demand payment in USD or offer a discount if paid in iqd.
Exchange rates vary by location. A money changer near the Green Zone may offer 1,500 iqd per dollar, while a bank in the Karrada district offers 1,420. The difference reflects risk, liquidity, and transaction fees.
I once visited a small shop in Erbil where the owner refused iqd and insisted on USD. He said, "I've lost too much to inflation." His stance illustrates how distrust in local currency drives informal exchange practices.
Currency systems like the iqd are governed by international standards set by the International Monetary Fund (IMF) and the World Bank. These organizations monitor fiscal discipline, inflation targets, and debt levels in member countries.
The iqd remains essential to Iraq's economy despite challenges. Its design, function, and evolution reflect broader themes in monetary history: sovereignty, inflation, and public trust.