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Last Updated: Monday, 7 July, 2003, 20:12 GMT 21:12 UK
Iraq to adopt new currency
'Saddam' banknote
The Saddam dinar will be replaced
Iraq will replace its existing currencies with a new dinar, according the US civil administrator Paul Bremer.

The new dinar will supersede notes used in the south of the country that currently carry images of the former president Saddam Hussein.

The northern Kurdish-controlled areas of Iraq will also adopt the new dinar in exchange for their current currency, the so-called Swiss dinar.

"On October 15, new Iraqi dinar banknotes will be available to the Iraqi people," Bremer said in a televised address.

"They will replace the existing Iraqi 'print' dinars at parity. After October 15 you will have three months to swap your existing notes for the new ones."

The Swiss dinar used by the Kurds will be replaced at the value of 150 new dinars to one Swiss Dinar, Mr Bremer added.

Cash crisis

Officials were forced to continue printing the Saddam notes in denominations of 250 after the war in an effort to stem a growing cash crisis.

Fraud associated with the 10,000 Saddam note means that most Iraqis refuse to accept them.

To do any serious shopping in Iraq you need to carry around massive wads of local currency
Mark Gregory
BBC business correspondent

This has forced people to carry bundles of 250 dinar notes, which are only worth the equivalent of 16 US cents each.

The British company De La Rue, based in Basingstoke, Hampshire, is negotiating to win the contract to print the new currency, which will be available in six denominations of up to 25,000 dinars.

"The company will lead a consortium of global currency specialists to manufacture the banknotes," De La Rue said in a statement.

The banknotes are also expected to be of higher quality than current notes in circulation with added security features.

Shares in De La Rue rose 9% on the news.

Operation budget

Mr Bremer also announced on Monday that he had approved a new budget of 9 trillion dinar ($6.5bn, 4bn at street exchange rates) for the second half of 2003.

"This is a very important step in getting Iraq and Iraqis back to work," he said.

"With this budget, ministries will be able to spend money on important projects. Many state companies will be able to begin operating again."

Half of the revenues are expected to come from oil sales, he added.

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