It can be because you want to start collecting Iraqi banknotes. Or you can like profit from its current exchange rates and rate in accordance with forecasts for the Iraqi dinar’s future.
Regardless of your aims, it is always advisable to research currency forecasts before investing in them, whether they are for the Iraqi dinar or any other. You can better grasp the current trajectory for the Iraqi dinar by understanding what the future holds.
Once you are aware of the currency’s potential for profit, you can purchase Iraqi dinar.
What Is the Iraqi Dinar (IQD)?
The Iraqi dinar is the country’s official currency, and its currency code is IQD. A 1,000-fil Iraqi dinar is a unit of currency that is circulating thanks to the Central Bank of Iraq. Dinars are the smallest unit of money in use because fils have been replaced by inflation and are no longer used.
The IQD is fixed at a rate of $1 USD = 1,450 IQD as of Q2 2021, while the actual exchange rate may vary somewhat from that peg.
The Iraqi Dinar: A Brief Introduction (IQD)
One dinar was worth 11 rupees when it was initially issued in 1932 to replace the Indian rupee. Up until 1959, the dinar was tied to the British pound (GBP), then to the U.S. dollar (USD). Until the Gulf War in the early 1990s, the exchange rate was largely constant.
Prior to the 1990–1991 Gulf War, the dinar was worth more than $3 in American money. The Swiss dinar was a currency produced prior to the Gulf War. Due to war-related sanctions, the government created inferior new currency after the war, which was a result of a lack of printing equipment. As a result, the currency depreciated quickly, reaching an average of 1,950 dinars per USD by 2003. In some parts of the country, the outdated Swiss banknotes were still in use.
Beginning in 2003, fresh, higher-quality notes were once more printed in order to unify the nation’s currency. Swiss notes were swapped at a rate of one Swiss note for 150 new notes, while old notes were exchanged for new ones. The USD/IQD exchange rate was set at 1,190 until December 2020, when Iraq’s Central Bank announced it would devalue the country’s currency by more than 20% in response to a severe liquidity crisis brought on by low oil prices. This move has angered the public as the government struggles to pay its bills. December 2020 will see the peg fixed at 1:1,450.
The price of Iraq’s primary export, oil, is denominated in US dollars, hence the dinar is not widely used outside of Iraq. Despite this, many con artists attempt to persuade consumers to purchase dinars in the anticipation of a future price increase. Investors are cautioned by numerous organizations and media to avoid IQD frauds.
Brokers typically charge a 25–30% premium over the official exchange rate when selling IQD in cash. Thus, those who purchase it quickly experience significant losses. Since there is essentially no market for it outside of Iraq, selling it is also challenging. If someone wants to sell them dinars, the brokers often offer 30 percent less than the official exchange rate. If the official exchange rate remains unchanged, these transaction expenses might erode 40 to 60 percent of the cash invested.
According to estimates from the World Bank, annual inflation in Iraq was 0.4% in 2018 and -0.2% in 2019.GDP decreased to -1.2 percent in 2018, increased to 4.4 percent in 2019, and decreased to -10.4 percent in 2020.
2022 and 2025 Iraqi Dinar Future Prediction
Now that you are familiar with the Iraqi dinar’s historical trends, it is time to learn about its future predictions for 2022, 2025, and 2030. Using the following forecast for the Iraqi dinar in 2022, you can then make plans for purchasing Iraqi dinar.
Increasing oil prices
The oil industry in Iraq has a significant impact on the value of the Iraqi dinar. Fortunately, predictions for 2020 are lower than the forecast for Iraq’s oil prices in 2021 and beyond. The oil price forecast for 2021 in Iraqi dinars is $39.50/b.
The planned 2020 budget for Iraq increased the rates by 23.4%. In turn, it might increase the value of the Iraqi dinar on the world market.
With rising oil revenues, Iraq’s earlier financial difficulties might also be alleviated. Over time, it may also raise the value of the Iraqi dinar.
Potential Oil Reserves
Because of its oil industry, Iraq’s economy has been growing steadily. Huge oil reserves exist throughout the nation. However, it has only used a small portion of its prospective oil sites up until this point. There are still many unexplored oil-bearing resource regions.
These conceivable oil reserves have a direct bearing on the prospective rise in the value of the dinar in Iraq. A number of multinational corporations, including Shell, ExxonMobil, and Total, are eager to invest in Iraq’s gas and oil reserves.
When Iraq releases its oil reserves, it may draw a number of investors from throughout the world. Even now, Iraq sends a sizable amount of petroleum each month to other nations.
When Iraq opens up any of its potential oil sites, the Iraqi dinar’s value is predicted to increase. The value of the Iraqi dinar is also less likely to fall because Iraq has multiple sources of income from its natural resources.
It’s unlikely that the demand for gas and oil among nations will fall for a while. Iraq will be able to maintain its position as the world’s leading oil supplier and develop during the next few years.
Iraq has the potential to develop into a major global energy supplier, according to historical trends. All of these elements may help the Iraqi dinar’s value rise in the future.
To strengthen the nation’s economy, the Iraqi government intends to implement additional changes. The reforms have the potential to raise the value of the Iraqi dinar if they are successfully implemented.
The gas, electricity, and oil industries of Iraq are the main targets of the changes. Within the next three to five years, the reforms hope to see fruitful outcomes. Furthermore, the government plans to implement the reforms rigorously. Sectors that do not adhere to them risk suffering consequences.
The changes also advocate for an increase in Iraq’s oil output after the present OPEC+ agreement expires. The agreement expires in April 2022. After this time, if Iraq’s oil output rises, the economy of the nation might improve. It automatically raises the value of the Iraqi dinar.
The Iraqi government has also accumulated large gold bullion and cash reserves. Keeping the nation’s wealth in storage can be a wise decision. Due to Iraq’s backup reserves, a decline in the value of the Iraqi dinar is less likely.
If the Iraqi dinar future forecast for 2022 appears advantageous to you, you can purchase Iraqi dinar. Iraq has a lot of natural gas and oil reserves, thus there is less chance that their value would decline. There is a chance that Iraq’s economy can grow by opening up more potential oil fields.
The 2030 Iraqi dinar forecast appears optimistic. Price and market analysts forecast the future value of the Iraqi dinar in order to better comprehend market trends.
Future Prediction of Iraqi Dinar 2025 and 2030
Iraq has one of the largest oil reserves that can guarantee its financial market return in safety. Iraq may eventually experience economic stability.
For Iraq, it is challenging, though. To resuscitate its economy, Iraq will need to establish some sound business plans. It will result in an upward trend for the IQD value in the Forex rate.
There is currently speculation that the Iraqi Dinar investment and future promises are merely con games conducted on investors.
Redenomination and Revaluation
Revaluation: The value of the Iraqi dinar was changed in accordance with the 2021 revaluation date. Standards are comparable to the US dollar or gold. The price of the IQD will increase and become more expensive after the Iraqi dinar is revalued. Consequently, it is safe to say that the Iraqi
Redenomination: Making the value of the old currency equal to that of the new currency is known as redenomination. For instance, a 1000 value old dinar can be converted into one freshly launched IQD. In order to retain the relative purchasing power of the new and old currencies, redenomination reduces the number of zeroes.
The aforementioned Iraqi currency news today suggests that the Iraqi dinar may be redenominated. But there are no indications that the Iraqi dinar will be revalued. In the absence of the Iraqi dinar, currency conversion is not possible.
Professional analysts claim that when it comes to the revaluation of the Iraqi dinar, it would be useless to consider such ideas. It may result in a number of issues for the nation, including:
- Due to the new dinar revaluation, Iraq will be unable to pay its debts.
- This entails forbidding foreign entities from doing business in Iraq.
- Due to the knock-on effects of the aforementioned variables, the country may experience slow or no growth.
By citing the successful revaluation of the Kuwaiti dinar, one of the most expensive values at the moment, some people attempt to persuade other investors to invest in the Iraqi dinar.
It is important to keep in mind that even when a currency is revalued, a multiplication of price increases is an impractical and almost impossible strategy for a currency. Due to its substantial oil reserves, many investors also think that the value of the Iraqi dinar in 2021 will increase after the war.
To stimulate investment in Iraqi dinar, the example of European nations is used when making future predictions. However, the war situation in these nations was very different from the one that exists in Iraq.
Iraq could split apart as a result of the civil conflict, which would worsen the nation’s economic situation. Therefore, you should acquire the necessary information about the situation in Iraq and the potential for an Iraqi dinar revaluation in 2021 before investing and believing in the future projections for the dinar.
Benefits and Drawbacks of Investing in Iraqi Dinars
There are various causes for optimism regarding the Iraqi economy’s future. Iraq has the ability to recover and establish itself as a stable economy because it holds 9% of the world’s oil reserves.
The establishment of investor confidence and the resuscitation of its economy would necessitate a tranquil, encouraging business environment.
But that does not necessarily imply that the best approach to wager on the Iraqi economy is to purchase dinars. For starters, the exchange rate for the Iraqi dinar is controlled by the central bank, thus it is unlikely to experience any sudden swings in value. In contrast, a more conventional investment vehicle, such as Iraqi equities, may provide returns even if the dinar’s value stays the same.
Furthermore, there is very little real trading volume; the IQD is not traded on the international FX market, and only a few Middle Eastern banks are ready to engage in it. If you must purchase Iraqi dinars, you can only do it at a few money exchangers, some of whom may or may not be registered legally. For such transactions, these brokers may charge up to 20%, which reduces the possible return even for short-term trading.
But the number of frauds and scams involving the Iraqi dinar may be the biggest worry.
State regulators from various states have issued warnings about currency “brokers” that promise big returns while imposing large fees on difficult-to-sell dinars.
Following the 2016 presidential election, this con became especially well-liked amid predictions that Donald Trump will somehow boost the value of the currency.
Investment in Iraqi Dinars: Pros and Cons
|Large oil reserves in Iraq may be able to sustain economic expansion.||There is hardly any active trade in IQD.|
|Purchasing dinars might be a wise investment for those who reside or work in Iraq.||The central bank sets the exchange rate for the IQD; it does not fluctuate with the market.
|Scammers have bombarded foreign investors with costly IQD “investment packages.”|
|The only option to purchase IQD is through expensive currency exchanges because it is not traded on the major international forex markets.|
Purchasing Iraqi Dinars
What does taking part in the Iraqi dinar’s future forecast mean? Simply said, the Iraqi dinar’s future is like any other investment. The “x” value of Iraqi dinars (IQD) is purchased for a specific amount of US dollars.
The Iraqi dinar value for 2021 is purchased in the same way as stocks, bonds, and other financial securities. Then, you anticipate that the price increase would bring about more advantages. Future forecasts for the Iraqi dinar operate in this manner.
It would be naive to think that making investments based on forecasts for the value of the Iraqi dinar would be risk-free and provide unrealistically high profits. Future estimates for the Iraqi dinar are similarly impacted by these elements.
The Basics of Foreign Exchange
A technique to swap money and cash is through forex. For instance, the exchange rate for an Iraqi dinar (IQD/UDS) is approximately 1,160 IQD per USD.
Assume that you buy $1,000 in Iraqi dinar after seeing the 2025 forecast for the currency and end up with 1.16 million IQD. You can wait for the value of the Iraqi dinar to increase against the dollar after investing using future projections for the currency.
The Iraqi Dinar will be revalued when?
Before 2026, the Iraqi dinar’s value is not likely to change. A representative of the Iraqi Central Bank declared that the exchange rate would be fixed for the following four years in March 2021. Another government representative later that year acknowledged that the exchange rate had been set in place in government budgets.
Who Determine the IQD Exchange Rate?
Unless the central bank modifies the exchange rate, the value of the Iraqi dinar is set by the Iraqi government and remains constant. This indicates that the price for the sale and purchase of money is set by the government.
Long-term forecasts for Iraq’s economy, currency rate, and other factors are questionable. Additionally, as it is difficult to predict or control external events on a global scale, currency trading on margin is always dangerous. Investors and dealers should use extreme caution when dealing in the Iraqi dinar or any similar currencies unless they are doing so on regulated markets or through licensed agents.