The True Kuwaiti Dinar Story

[wmawhite]

Kuwaiti dinar - The dinar was introduced in 1961 to replace the Gulf rupee. It was initially equivalent to one pound sterling. As the rupee was fixed at 1 shilling 6 pence, this resulted in a conversion rate of 13⅓ rupees to the dinar.

When Iraq invaded Kuwait in 1990, the Iraqi dinar replaced the Kuwaiti dinar as the currency and large quantities of banknotes were stolen by the invading forces. After liberation, the Kuwaiti dinar was restored as the country's currency and a new banknote series was introduced, allowing the previous notes, including those stolen, to be demonetized.

After the liberation, a new series was issued on 24 March 1991 with the aims of replacing the previous withdrawn series as quickly as possible and guaranteeing the country's swift economic recovery. This new series was legal tender until 16 February 1995. Denominations were ¼, ½, 1, 5, 10 and 20 dinar.

 

Here is an article from a L. A. Times news correspondence report the reopening of the Kuwaiti banks:

 

Crush Expected When Kuwaiti Banks Reopen Today

March 24, 1991|From Reuters

KUWAIT CITY, Kuwait — Thousands of Kuwaitis are expected to jam the country's banks today when they open for the first time since the end of the Iraqi occupation.

Customers will be allowed to withdraw funds and to swap pre-invasion money for a new currency issued to make more than $1 billion in pre-invasion dinars stolen by the Iraqis worthless.

"We expect a rush of people," said Issam Asousi, an executive with the Bank of Kuwait. He said it could be a chaotic first week because customers have a lot of questions about their accounts.

Kuwaiti banks continued operating during the seven-month Iraqi occupation under managers brought in from Iraq, but they have been closed since the U.S.-led alliance ousted the Iraqi army from Kuwait a month ago.

When the banks reopen today, customers will be able to withdraw up to 4,000 Kuwaiti dinars, equivalent to about $14,000 at pre-invasion exchange rates from their accounts, and to exchange a like amount for foreign currency.

Balances of customers' accounts will go back to what they were on Aug. 1, a day before the invasion.

Clients will not be able to exchange Iraqi currency issued during the occupation, when Baghdad pegged the rates of the strong Kuwaiti dinar to the far less valuable Iraqi dinar.

The new Kuwaiti money will be exchanged for old at a one-to-one rate.

http://articles.latimes.com/1991-03-24/news/mn-1395_1_kuwaiti-banks

 

In closing, keep in mind that Iraq invaded Kuwait in August 1990.

The Kuwaiti currency at that time was the Kuwaiti Dinar.

The Kuwaiti currency was replaced with the Iraqi Dinar.

Seven (7) months later, February 28, 1991, The Iraqi forces are kicked out of Kuwaiti and the war has ended.

Twenty six (26) days later, on March 24, 1991, the Kuwaiti banks reopen with a NEW currency valued at 1 KWD = $3.50.

If any Kuwaitis still held the old currency it would be accepted at a one to one rate.

 

Keep this in mind when you hear other wild stories about the KWD.

Edited March 27, 2013 by wmawhite

[Xanderjd]

Yeah, there are still tons of wild stories out there about the subject too. Millions of people made billions and all those chestnuts.