In Iraq, Saddam Dinars Remain in Wallets

They toppled statues, shredded paintings and defaced murals, all to wipe Saddam Hussein's (search) omnipresent image from the Iraqi psyche. But three weeks after the Americans took Baghdad, the fact remains: Saddam is still in everybody's pocket.

The Iraqi dinar (search), each bill with a reverential engraving of the deposed leader surveying his domain, continues to be the currency of this lawless nation. The new American governors said Sunday that the dinar will be supplanted and replaced — but not for a while.

"Any currency that two people in Iraq are willing to accept will be utilized in this interim period," said George Mullinax, a U.S. Treasury (search) official working as a liaison with the Iraqi Central Bank. He said the interim government, when it's appointed, will make a new currency a priority.

"We're not going to print Saddam dinars," he added pointedly.

When regimes fall, for whatever reason, they leave behind the trappings of their government. Cash usually lasts the longest, simply because it's an indispensable commodity. But when the money depicts a disgraced dictator at the height of his power, it can make for an awkward transition.

The dinars locked away in the Central Bank (with the inscription "Built in the age of Saddam Hussein") have been twice defiled — bombed by coalition forces, then looted by thieves unconcerned about whose face was on the bill. The bank is littered with shreds of 250-dinar notes, blown apart and scattered by wind.

About $400 million in hard currency and about 20 billion dinars were looted in the lawlessness that accompanied U.S. forces into Baghdad, Mullinax said. That — and uncertainty over the dinar's future — has produced a wave of rumors and seesawing exchange rates.

Before Saddam invaded Kuwait in 1990, a single dinar cost $3. But then came the 1991 Gulf War and U.N. sanctions that impoverished Iraq, and by March — the eve of the 2003 war — it was trading at 2,600 to the dollar. It dropped to 3,400 after U.S. forces invaded Baghdad.

But in recent days it has surged, a development that traders attribute to growing demand and an unchanged supply.

On Sunday, moneychangers on the street offered about 2,000 dinars to the dollar, though only if the buyer was getting the common 250-dinar note.

But 10,000-dinar notes, which some view with suspicion because of reports of counterfeiting, were valued at 2,400 dinars to the dollar.

Most sales are conducted with tremendous stacks of dog-eared 250-dinar notes, bound with rubber bands into unwieldy bricks of 100 notes — 25,000 dinars, or about $12.50.

"Soon we'll have our own new bills," said Hussein Ali, a moneychanger. "In the meantime, we'll use our Saddam notes."

Many merchants, however, are fixing prices in more stable dollars. Ali Hussein al-Obeidi, who owns a cigarette shop, said wholesalers were now demanding all payments in dollars.

Some fluctuation is caused by an infusion of dollars from the Americans now running the show.

Last week, U.S. forces began issuing "emergency payments" of 20 one-dollar bills to government workers who have returned to their jobs.

"If you remember Y2K, the U.S. government printed a lot of currency in anticipation of shortages in ATMs," said David Nummy, a U.S. Treasury official in Baghdad. He said the one-time tips would soon be replaced with actual paychecks.

That money, Mullinax said, is coming from $1.4 billion in frozen Iraqi accounts in the United States.

"That would be a lot of $20 payments," he said.

The dinars, while used, are hardly loved. Some people have made a scene by tearing up the Saddam-festooned currency for foreign journalists. And scattered establishments — especially restaurants and hotels catering to foreigners — have begun to refuse their own currency.

"Very sorry, sir. U.S. dollars only," a waiter at the Flower Land Hotel's restaurant said Sunday.

Mohammed Majid, who sells satellite dishes from his electronics shop for $300 apiece, said he sent away two people who brought in huge satchels of dinars.

"I told them to go exchange them," he said. "People pay in dollars."

But he doesn't expect the dollar to last long either. After all, he says, soon a new government will print a new currency — "without the picture of Saddam."

But if not Saddam, who? "Bush," he deadpanned. As shoppers nearby burst into laughter, Majid turned serious. "Somebody will be elected by the new government, and..."

He broke off and considered it for a moment.

"Maybe it's better that the picture on the bill be Bush."