Why People Invest in Iraqi Dinar and How You Can Use It

Given the current uncertain environment in stocks and bonds, now is an excellent time to investigate alternatives. It is the official currency of Iraq and is issued by the Central Bank of Iraq. The Iraqi government plans to introduce additional reforms to improve its economy. Successful implementation of these reforms will likely lead to an increase in the value of the Iraqi Dinar. The dinar investment opportunity fraud has been around for a while and has recently become more widespread.

1. But since all currencies are valued against one another, the Dinar could rise in relative value compared to other currencies, like the dollar, the euro, and the yen.
2. While it’s true that alternative energy sources, like wind and solar, have made considerable progress in the past couple of decades, they’re mostly being used for electric power generation.
3. The large number of unemployed workers has naturally suppressed wages in the country.
4. Privately-owned banks, until recently, served almost entirely as currency exchange businesses, with the exception of a handful of mostly regionally owned commercial banks.

Increasingly, the GOI has asked investors and sellers to provide financing options and allow for deferred payments. Second, traveling to Iraq is another reason why people would want to hold the currency. Business people looking for investment opportunity still need currency when they are in the country. Rather than relying on banks or airport exchanges, they will use a currency broker because of the exchange rates and lower fees.

Political and Security Environment

In the past three years, the GOI did not conduct any investment policy reviews through the Organization for Economic Cooperation and Development (OECD), the World Trade Organization (WTO), or the UN Conference on Trade and Development (UNCTAD). We recommend that you hold a very small slice of your portfolio in exotic currencies, like the Iraqi Dinar. Given that the country’s political fractures are benefiting no one, the country will eventually settle internal differences, and submit to a workable confederation.

Reasons To Hold and Use the Iraqi Dinar

Limited information on debt obligations was available on the Central Bank and MOF websites. Iraq currently has BITs with Armenia, France, Germany, Japan, Jordan, and Kuwait. Iraq’s investment agreements include general provisions on promoting and protecting investments, including clauses on profit repatriation, access to arbitration and dispute settlements, fair expropriation rules, and compensation for losses. Much like its currency, Iraq’s economy and political situation can only improve. The country is being virtually discounted by major players, which means the country is virtually “underpriced”. As oil from the directly affected country slows, other producing nations like Iraq, would be counted on to make up for the lost supplies.

With Iraq’s currency currently being close to worthless, it hardly reflects the fortunes of the country that has a disproportionate share of the world’s most important commodity. As developing countries in the world continue to advance, and their populations acquire more automobiles and make greater use of air transportation, demand for oil will steadily increase. Iraq also has the world’s fifth largest dinar investment oil reserves, trailing only Venezuela, Saudi Arabia, Canada and Iran. That doesn’t mean that the Iraqi Dinar would explode in value in the strict sense. But since all currencies are valued against one another, the Dinar could rise in relative value compared to other currencies, like the dollar, the euro, and the yen. There are several compelling reasons for the Iraqi Dinar as an alternative investment.

The Iraqi Dinar as an Alternative Investment

These smaller percentages of the “rent allowance” rate, ranging from 1 percent to 25 percent, amount to significant rent reductions for leased land. Iraq currently has four FZs with tax exemptions and other incentives for the transportation, industrial, and logistics sectors. The largest is the Basrah/Khor al-Zubair FZ, comprising 18 square km and located southwest of Basrah at the Khor al-Zubair seaport. Operational since June 2004, it hosts a number of local and foreign companies. The Falafel and Fallujah zones are located in formerly ISIS-held areas, and the possibility of continued political instability makes further development in the near future unlikely. In May 2019, Iraq and Kuwait announced a new joint FZ project in Safwan port, pending approvals.

As mentioned earlier in the article, there are rumors of incoming foreign investment in Iraq. This would create more stability and economic growth for the people of Iraq, leading to the an increase in value of the Dinar. During the 2020 U.S.-Iraq Strategic Dialogue, the DFC signed a $1 billion MOU with the MOF to enable private sector investment in Iraq.

Iraq is a party to both International Labor Organization conventions related to youth employment, including child labor. Iraqi labor laws also regulate working conditions and prohibit all forms of forced or compulsory labor, including by children. However, the GOI has not effectively monitored or enforced the law, which has resulted in unacceptable working conditions for many workers. U.S. firms frequently identify corruption as a significant obstacle to FDI, particularly in government contracts and procurement, as well as performance requirements and performance bonds. U.S. companies operating in the energy and other sectors continue to be obligated to follow U.S. laws such as the Foreign Corrupt Practices Act (FCPA). Iraq ranked 160 out of 180 on Transparency International’s 2020 Corruption Perception Index.

The U.S. International Development Finance Corporation signed a $1 billion MOU with the Ministry of Finance (MOF) to enable private sector investment in Iraq. An uneven security environment, including the threat of resurgent extremist groups, remains an impediment to investment in many parts of the country. Other lingering effects of the fight against ISIS include major disruptions of key domestic and international trade routes and the destruction of economic infrastructure. Many militia groups that participated in the fight against ISIS remain deployed and are only under nominal government control. Several militias have been implicated in a range of criminal and extralegal activities in commercial sectors, including extortion. However, the security situation varies throughout the country and is generally less problematic in the Iraqi Kurdistan Region (IKR).

IQD/BTC

The COI investigates government corruption allegations and refers completed cases to the Iraqi judiciary. In 2004, the COR abrogated CPA Order 57, which had established Inspectors General (IGs) for each of Iraq’s ministries. Similar to the role of IGs in the U.S. government, these offices had been responsible for inspections, audits, and investigations within their ministries, although detractors claimed they in fact added another layer of bureaucracy and corruption. In 2019, the GOI dismantled the IG offices in all of the ministries after a parliamentary decision citing their lack of effectiveness. In August 2020, PM Kadhimi announced the formation of a new higher committee on anti-corruption staffed with new judges and a force from MOI that reportedly led to several senior officials’ arrests.

As globalization has slowly but relentlessly swept around the planet, large companies have been moving production out of countries where wages are high, and into those where they are low. The Iraqi Dinar is so low in value, it has virtually has nowhere to go but up. Despite more than 40 years of recognizing the need to reduce dependence on oil, the industrialized nations of the world remain seriously dependent on the commodity. For example, were civil war to break out in Iran or Saudi Arabia, world oil supplies would tighten almost immediately. Should the conflict drag on for months or years, the effect on the price of oil could be long-term.

The US has an array of credit rating agencies that rate firms and countries on their financial health and repayment abilities. The top three US credit rating agencies include Moody’s, Standard and Poor’s (S&P), and the Fitch Group. According to prosecutors, a group of men behind an Iraqi currency scheme created a pitch that included war hero tales to lure potential investors.

Neither the Commission of Integrity nor the IGs has effective jurisdiction within the IKR. The Kurdistan Board of Supreme Audit is responsible for auditing regional revenues with IKP and https://1investing.in/ GOI oversight. The IKP established a regional Commission of Integrity in late 2013 and increased its jurisdiction the next year to include other branches of the KRG and money laundering.

Osman has a generalist industry focus on lower middle market growth equity and buyout transactions. In March 2021, a spokesman for the Central Bank of Iraq announced that the currency would remain fixed for the next four years. Later that year, another government official confirmed that the exchange rate had been established in government budgets. You can send a variety of international currencies to multiple countries reliably, quickly, and safely, and at a rate cheaper than most banks. Following the 1991 Persian Gulf War, the economy of Iraq languished due to United Nations sanctions and official corruption.

The 14 banks facing the ban issued a joint statement urging the Iraqi government to address the issue and warning that banning a third of Iraq’s private banks from dollar trading would not only impact the dollar price but hinder foreign investment. GOI entities are required to give preferential treatment to SOEs, under multiple laws. A 2009 COM decision requires all Iraqi government agencies to procure goods from SOEs unless SOEs cannot fulfill the quality and quantity requirements of the tender.