27 October 2003
BAGHDAD - Traders at Baghdad's bourses are refusing to exchange US dollars with the new Iraqi dinar, in order to dispose of old bills. The policy started a week after the introduction of the new currency at banks across the country. Traders have in effect given their stamp of approval to the new notes, saying that the new currency cannot be forged whereas the markets are rife with counterfeit old notes which traders themselves want to do away with as soon as possible. "I, for example, don't prefer to deal in the old currency at all because it is full of counterfeits and it is impossible for me or for anyone to sit and check all the notes in order to make out the counterfeits and separate them," said Bassim Qassim, a moneychanger at Baghdad's central currency market at Kifah Street.
However, other moneychangers have attributed the problem to the chief traders, or "big heads", of Kifah market, claiming that they are responsible for all the fluctuations in exchange rates as well as all "the tricks that aim at cheating the consumer". "Traders ere have some contacts with the chief traders of Kifah who are responsible for all these problems in money markets whether here, at Khadimiya or Kifah itself," said Jalal Yahiya, a moneychanger at Harthiya. He added that the reason why traders don't want to exchange dollars with the new dinars is because they are trying to divest themselves of the old currency now in order to take back old notes at a discount when the window of the currency swap, January 15, draws to a close. Ahmed Jassim, a moneychanger, explained that people are showing a strong desire to get the new currency when swapping their dollars, but are being blocked by the traders, forcing them to take the old currency.
Last week, moneychangers began encouraging people to take old notes by operating two dollar-dinar exchange rates. The rate to change dollars into new dinar bills was 1800 whereas with the old notes the rate was 1890. However, the incentive did not appear to be effective. "People really want to get their money in the new currency that is why they are ready to exchange their dollars even at a discount since they are afraid of the counterfeits in the old notes," said Redha Allwan, a moneychanger at Khadimiya bourse. The confidence in the new currency appears to be a double-edged sword. On the one hand it bodes well for the future of the dinar, but on the other hand it is allowing the moneychangers an opportunity to exploit consumers further. There should be no difference between the old and new dinars because they can be exchanged at par in any bank in Iraq. But consumers are still choosing to visit the money markets that offer no protection.
"I am an employee and don't have time to stand in long queues in front of the banks that is why I and so many others are forced to changing old currency in the money markets at a discount because I have no other alternative," insisted Jassim Mohammed, a teacher at one of the schools near Kifah's money market.
BAGHDAD - Traders at Baghdad's bourses are refusing to exchange US dollars with the new Iraqi dinar, in order to dispose of old bills. The policy started a week after the introduction of the new currency at banks across the country. Traders have in effect given their stamp of approval to the new notes, saying that the new currency cannot be forged whereas the markets are rife with counterfeit old notes which traders themselves want to do away with as soon as possible. "I, for example, don't prefer to deal in the old currency at all because it is full of counterfeits and it is impossible for me or for anyone to sit and check all the notes in order to make out the counterfeits and separate them," said Bassim Qassim, a moneychanger at Baghdad's central currency market at Kifah Street.
However, other moneychangers have attributed the problem to the chief traders, or "big heads", of Kifah market, claiming that they are responsible for all the fluctuations in exchange rates as well as all "the tricks that aim at cheating the consumer". "Traders ere have some contacts with the chief traders of Kifah who are responsible for all these problems in money markets whether here, at Khadimiya or Kifah itself," said Jalal Yahiya, a moneychanger at Harthiya. He added that the reason why traders don't want to exchange dollars with the new dinars is because they are trying to divest themselves of the old currency now in order to take back old notes at a discount when the window of the currency swap, January 15, draws to a close. Ahmed Jassim, a moneychanger, explained that people are showing a strong desire to get the new currency when swapping their dollars, but are being blocked by the traders, forcing them to take the old currency.
Last week, moneychangers began encouraging people to take old notes by operating two dollar-dinar exchange rates. The rate to change dollars into new dinar bills was 1800 whereas with the old notes the rate was 1890. However, the incentive did not appear to be effective. "People really want to get their money in the new currency that is why they are ready to exchange their dollars even at a discount since they are afraid of the counterfeits in the old notes," said Redha Allwan, a moneychanger at Khadimiya bourse. The confidence in the new currency appears to be a double-edged sword. On the one hand it bodes well for the future of the dinar, but on the other hand it is allowing the moneychangers an opportunity to exploit consumers further. There should be no difference between the old and new dinars because they can be exchanged at par in any bank in Iraq. But consumers are still choosing to visit the money markets that offer no protection.
"I am an employee and don't have time to stand in long queues in front of the banks that is why I and so many others are forced to changing old currency in the money markets at a discount because I have no other alternative," insisted Jassim Mohammed, a teacher at one of the schools near Kifah's money market.
Sarmad S. Ali
© Iraq Today 2003
