Dollar to Dinar? Coming Sooner Than You Think
Dollar to Dinar? Coming Sooner Than You Think
Multi-National Division Baghdad
Story by Staff Sgt. Mark Burrell
Date: 07.16.2009
Posted: 07.16.2009 05:41
BAGHDAD – "Can I get fifty bucks in Iraqi dinar?" That may sound like an odd request from an American Soldier at a finance office in Baghdad, but in the next few months it will be as natural as buying DVDs or energy drinks from the Iraqi shops here.
However, the Army and Air Force Exchange Services run shops and the military postal services will still only accept U.S. dollars, explained Maj. Timothy Lancaster, the commander of the 208th Finance Company, 10th Sustainment Brigade Troops Battalion.
"The goal is to migrate from using primarily U.S. dollars to primarily Iraqi dinar by, Oct. 1," said Lancaster. He stressed that October isn't a deadline, but a reasonable goal.
Lancaster, from Mannheim, Germany, is in charge of six finance detachments from all over the world that support finance in Multi-National Division – Baghdad.
"Iraq is their own country and sovereign," Lancaster added. "Their currency is the Iraqi dinar, so we need to respect that and start adopting what we can to support them."
As coalition forces have left the cities and Iraqi security forces have taken over security, Army finance is trying to transition the economy back to the shoulders of Iraqis using the dinar to lessen CF visibility here, according to Lancaster.
"The advantage of switching over is we inject their economy and that makes the dinar stronger," said Capt. Jason Hempstead, the 828th Financial Management Detachment commander, 208th Financial Company. The Pennsylvania National Guard Soldiers from the 828th run the Camp Liberty Finance Office.
"It helps us accomplish our mission and it helps Iraqis become more economically stable," added Hempstead, who hails from, Richmond, Va.
In theory, the goal to lessen the CF footprint, help stabilize the Iraqi economy and spend more local currency in markets in Baghdad should be easy, but that isn't the case, said Lancaster.
"The switch from the dollar to the dinar has been harder than expected because it's been so ingrained in Iraqi vendors," explained Lancaster. "Vendors are so used to seeing cash and U.S. dollars, there has to be a mental shift."
That shift is already starting to take place around bases in Baghdad as more and more local shop owners don't bat an eye when asked if they take dinar, said Lancaster.
"It shouldn't be a problem, the vendors usually accept local currency," added Hempstead.
Though many Soldiers come in to request money from their Eagle Cash card, the need for U.S. currency is mostly coming from paying agents that pay their contractors, added Hempstead.
"We issued about four million U.S. dollars from this office last month," said 1st Lt. Donald Warren, a disbursing agent from, Indiana, Pa., assigned to the 828th Financial Management Detachment. "But for every day operations, we have both types of currency to fulfill the need for the mission."
In the market, the price of the Iraqi dinar fluctuates daily, but for the past seven months the military exchange rate has held at 1,170 Iraqi dinars to one U.S. dollar, explained Lancaster. Differences in on base and off base exchange rates can lead to black market currency prices and fear of counterfeit currency coming into circulation.
"We have guaranteed currency from trusted sources, like the National Bank of Iraq, so it's safe to get your dinar from our finance offices," said Lancaster. There are also security measures that Lancaster's offices take that check for watermarks among other things.
Using the dinar will also cut out steep costs of transitioning cash from the United States to Iraq with Soldiers carrying it every step of the way, added Lancaster.
"Is it a simple flip of a switch? No, it really isn't," said Lancaster. "We will always be here for the Soldiers, but we want the banks here to do the banking for the Iraqis."
As word spreads and more Soldiers start to take advantage of the dinar, the easier it will be to transition out of Iraq when the time comes, the easier it will be to get a better deal on those DVDs and energy drinks at the markets.
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