Most Iraqis embrace new currency
BAGHDAD, Iraq -- It didn't take long Wednesday for a crowd to gather around Abdul Qadar Husan as he stood in front of Iraqi Middle Eastern Investment Bank inspecting his newly exchanged dinars.
Husan, a 65-year-old contractor, was one of the first customers in line to swap a bag of Saddam Hussein-era money for the new U.S.-developed currency, which doesn't carry the deposed leader's portrait. "I just wanted to get rid of that guy's picture," he said.
"They're so small," said Sabah Hussein, 30, a deliveryman, marveling at the Monopoly-money-sized Iraqi bills. "It's good. I like it. They will be easier to carry."
Much to the relief of the U.S.-led administration, Iraqis by and large embraced yesterday's launch of a new dinar. There was no panic, no terrorist attacks against banks and only some modest griping about standing in lines in the sun, even though citizens have until Jan. 15 to carry out their exchanges.
After a string of car bombings and political setbacks, the currency debut gave U.S. officials a much-needed boost in its efforts to rebuild Iraq, restoring some goodwill with an increasingly wary Iraqi population and giving the Bush administration an opportunity to demonstrate that it is making progress.
"We are laying the groundwork for the private sector in Iraq," said Commerce Secretary Donald Evans, who flew to Baghdad to usher in the new currency.
The carefully orchestrated media event at the Baghdad International airport underscored how fervently the White House is working to manage perceptions about progress in Iraq. In recent weeks, the Bush administration has launched a public-relations counteroffensive to what it called negative media portrayals about the U.S.-led occupation.
Throughout the day in Baghdad, customers arrived at banks with heaps of old cash -- the dinar currently exchanges at 1,970 to the dollar -- carried in plastic trash bags, suitcases, burlap rice sacks and bulging pockets. Since it is largely a 1-to-1 exchange (the so-called Swiss dinar in the largely autonomous Kurdish regions of northern Iraq, which is considered stronger and more stable, are exchanged 1-to-150 national dinars) most customers left with similarly cumbersome stacks of new, plastic-wrapped money.
Security at banks was sharply increased. U.S. tanks were stationed in front of most exchange centers, and some remained even after banks had closed. Customers were patted down and searched. Security cameras and Iraqi police kept watch inside.
The coalition spent $170 million to design, print and roll out 6 trillion new dinars, carting the currency around in the plywood boxes with 747 airplanes. Old bills are being incinerated.
Fears that those opposed to the U.S. occupation would attack bank branches were heightened by a string of suicide car bombings, including three over the past week.
"I'm just hoping that nothing happens today," said Zuhair Njimi Aldin, 24, as he exchanged 7 million old dinars at Al Zuwya Bank in Baghdad.
Most of the crowds were orderly and patient, according to teller Kawkab Thyab, noting that many people already deposited their cash over the past few weeks so their account balances would automatically convert.
"Actually, people were more anxious and nervous before today," she said.
Experts predicted that Iraqis would welcome the new currency's safeguards against counterfeiting and the promise of greater stability. About 2 out of every 1,000 existing dinar bills are fake, coalition officials estimated. Counterfeit 10,000-dinar notes are such a problem that they are exchanged at a 25 percent discount.
"I think most of the activity is going to happen over the next few weeks," said Jacob Nell, a currency adviser from the United Kingdom. He predicted that merchants will prefer the new currency's counterfeit protections and may start to discount the old bills to offset the risk.
The new currency is the latest step to get Iraq's economy on its feet and instill greater confidence among investors and business owners. The coalition recently began thrice-weekly currency auctions to set the exchange rate against the U.S. dollar. The first auction had one bidder, the last had eight. But by Jan. 15, officials hope a competitive market will help stabilize the currency.
Separately yesterday, at an undisclosed location near the Syrian border, a small group was seen by elements of the 82nd Airborne trying to cross into Iraq. When challenged, they fired small arms and rocket propelled grenades at the Americans, the military said.
A coalition spokesman said the infiltrators were apprehended or killed. There were no U.S. casualties, but a helicopter was disabled when struck by small arms fire.
Syria denied that an infiltration attempt had taken place from its territory.
