Launching the New Iraqi Dinar

  • Reference: P-1075-E

  • Year: 2003

  • Number of pages: 15

  • Geographic Setting: Irak

  • Publication Date: Nov 27, 2006

  • Source: IESE (España)

  • Type of Document: Case

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Description

After the end of the Iraq war of 2003, the US-led administration in Iraq decided to introduce a new currency into the country. This was for several reasons: a) to use a currency without the head of Saddam Hussein on the notes, b) to give stability to the economy and c) to have more than just one domination of bill in circulation (up until then, the only bill in use was 250 dinars (20 US cents) and there were no coins). The design of the new money was to be identical to that in use before Saddam put his face on it, was printed in the UK and then flown into Baghdad. From there it had to be distributed around the country to individual banks, where people would exchange old notes for new at an exchange rate of one for one. Old money in the banks was dyed red, collected and flown back to Baghdad for accountability and destruction. Citizens had a three month window (15 Oct 2003 - 15 Jan 2004) to change their money, during which period both new and old money was legal tender. Thereafter, only the new money was legal.

Learning Objective

The case fits in a logistics or supply chain management course, and can be used to discuss the operational details of creating a distribution strategy. The purpose of this case is to understand the drivers of a logistics plan in a particularly difficult environment. It allows a discussion of the main shape and the details of a distribution strategy, and comparing it with what companies usually face.

Keywords

Decision Analysis Logistics Risk Management Supply Chain