The Iraqi dinar that the Coalition Provisional Authority retired in 2003 was a currency that a decade of sanctions and a captured printing press had destroyed — and one of the strangest cases in this archive, because for those years Iraq had effectively two dinars at once. Between 15 October 2003 and 15 January 2004 the occupation authority issued a new, unified dinar and exchanged the population out of the old notes, ending a monetary split that had run since the 1991 Gulf War. The verdict on the record is replacement: the old “print” dinar was withdrawn and superseded by a freshly designed, professionally produced currency.
The split was the heart of the story. Before 1990 Iraq used a dinar printed in Britain by De La Rue and known, for reasons no one has ever firmly established, as the “Swiss dinar.” It was a hard, stable currency — worth more than three US dollars in 1990. When sanctions cut Iraq off after the invasion of Kuwait, Saddam Hussein’s government, unable to import quality banknotes, disowned the old money and printed its own crude replacement domestically: the “Saddam dinar” or “print dinar.” The government then ran the presses to finance deficits an oil economy under embargo could no longer cover, and the print dinar collapsed — from roughly parity with several dollars to about 3,000 to the dollar by late 1995, amid annual inflation estimated near 250 percent in the south.
The Swiss dinar, meanwhile, did something remarkable: it survived. In the Kurdish north, beyond Baghdad’s control, the old De La Rue notes kept circulating — and because no one could print any more of them, their supply was fixed and their value held. While the southern print dinar inflated into the thousands, the northern Swiss dinar traded at a vast premium, around 100 print dinars to one Swiss dinar through the late 1990s. A single country had two national currencies, one worthless and multiplying, the other scarce and prized, separated by a political frontier.
After the 2003 invasion the Coalition Provisional Authority unified them. De La Rue — the same firm that had printed the original Swiss dinar — produced a new series in six denominations, and Iraqis exchanged their old notes over three months: Saddam print dinars at one-to-one, the cherished Swiss dinars at 150 new dinars to one. The new currency, an oil state’s money no longer printed to plug a sanctions-era deficit, actually appreciated about 25 percent in the months after its launch as prices stabilized. It is the closed, dated act on which this file rests.
The Lebanese pound did not die of a commodity bust, because Lebanon has almost no commodities to bust. It died of a banking arrangement — an effective sovereign Ponzi scheme, in the World Bank’s own framing — that propped up an artificial dollar peg for more than two decades and then collapsed all at once. Between late 2019 and 2021 the pound lost roughly 98 percent of its value against the US dollar, and in July 2020 Lebanon became the first country in the Middle East and North Africa ever recorded to enter hyperinflation. The verdict on the record is devaluation: the official peg of 1,507.5 pounds to the dollar, set in December 1997, was finally cut to 15,000 on 1 February 2023, while the street had already run far beyond it. There has been no stabilizing reform. As of this writing the crisis remains unresolved, and the people it ruined have not been made whole.
The mechanism was financial, not geological. From 1997 the central bank, the Banque du Liban (BDL) under long-serving governor Riad Salameh, fixed the pound at 1,507.5 to the dollar — a peg that, in a country running chronic trade and fiscal deficits, required a perpetual inflow of dollars to sustain. The system manufactured that inflow. Commercial banks lured dollar deposits, heavily from the Lebanese diaspora, by paying interest rates far above world levels; the banks in turn parked those dollars at BDL for still-higher returns under what Salameh called “financial engineering.” The returns of earlier depositors were paid out of the deposits of later ones. That is the textbook definition of a Ponzi, and when fresh dollar inflows slowed after 2018, the scheme had nothing left to pay with.
The unravelling was sudden and total. Mass protests erupted in October 2019; banks imposed informal capital controls overnight, trapping depositors’ dollars behind their counters. On 9 March 2020 Lebanon defaulted on its sovereign debt for the first time in its history. The pound, no longer defensible, collapsed on the parallel market — and because the official peg was kept alive on paper, Lebanon developed a thicket of contradictory exchange rates: the official 1,507.5, the BDL “Sayrafa” platform rate, the parallel-market rate, and the so-called “lollar,” a dollar trapped in a Lebanese bank account that was worth a fraction of a real dollar in cash. By March 2023 the parallel rate had reached 100,000 pounds to the dollar, and the largest banknote in circulation, the 100,000-livre note once worth about 67 dollars, would buy a single dollar.
What this episode lacked was a fix. The 2023 devaluation of the official rate to 15,000 was an admission, not a cure — it merely narrowed the gap between the fictional peg and reality. The deposits that vanished behind the banks’ doors were never restored; estimates of the losses hidden in the system run from roughly 40 to 76 billion dollars. This is a collapse whose human ledger is still open.
The Iranian rial did not collapse in a single catastrophic spike; it eroded, year after year, until it was worth so little that the parliament legislated to strike four zeros off it and rename the unit the toman. The verdict here is devaluation: an oil-dependent economy, squeezed by international sanctions and chronic high inflation, watched its currency fall from roughly 70 rials to the US dollar in 1979 to around 162,500 on the free market by May 2020 — and on 4 May 2020 the Islamic Consultative Assembly approved a plan to redenominate, making one new toman equal to 10,000 old rials. That redenomination is best understood as a symptom dressed as a reform: a legislative acknowledgment that the rial unit had become too small to be usable, not a measure that halted the decline. The crisis is ongoing.
The mechanism is the classic oil-state version of the resource curse, compounded by geopolitics. Iran’s public finances and foreign-exchange earnings rest heavily on crude exports, which makes the state’s revenue hostage both to the oil price and to whether Iran is permitted to sell at all. When the United States withdrew from the nuclear deal in 2018 and reimposed “maximum pressure” sanctions, that second variable turned against Iran sharply: oil-export revenue fell from around 51 billion dollars in 2018 to roughly 5 billion in 2020. A government facing a revenue collapse and cut off from world finance leaned on monetary financing, and inflation, already chronic, settled into a punishing range — roughly 30 percent in 2020 and in the 40s through the years that followed.
The redenomination itself must be described precisely, because its status is easily overstated. The May 2020 parliamentary vote approved removing four zeros and renaming the rial the toman, with a smaller sub-unit, the parseh (one toman = 100 parsehs). But the measure was legislated and phased, not instantly executed: it required the approval of the Guardian Council, and the central bank was to be given up to two years to withdraw the old rial, with rial and toman circulating in parallel during the transition. The “toman” was in any case already the unit Iranians used in everyday speech, informally dividing rial prices by ten. The reform proposed to make official what the street had long done.
What it did not do was anchor the currency. After the 2020 vote the rial kept falling, reaching record lows against the dollar in the years that followed as sanctions persisted and inflation stayed high. A redenomination that strips zeros without changing the fiscal and external pressures behind the inflation does not stabilize a currency; it relabels it. This file records the dated devaluation and the legislated reform; it does not claim the rial was saved.