9 June 2003:
U.S. forced to print Saddam banknotes
By Andrew Marshall
Click to enlarge photo
BAGHDAD (Reuters) - They have torn down his statues and peppered his portraits with bullet holes, but Iraq's interim U.S. rulers have been forced to print millions of new banknotes bearing the face of Saddam Hussein.
Officials sitting at makeshift desks in the plundered and fire-ravaged central bank building say printing presses began cranking out vast quantities of Saddam dinars last week to ease a cash crisis that has enraged Iraqis.
The problem lies with the purple-and-yellow 10,000-dinar notes, worth about 6 pounds, that Saddam's government introduced in the last years of its rule.
Nobody wants to hold them. They are widely believed to be easy to counterfeit and persistent rumours say they will be declared worthless because large amounts were stolen during the anarchy that followed Saddam's overthrow on April 9.
Merchants are redeeming the notes at only around 70 percent of their face value, infuriating Iraqis who have received their wages in 10,000-dinar bills. Everybody wants their money in 250- dinar notes, even though large transactions require sackloads of them to be hauled around.
To meet the demand for the smaller notes, the central bank is printing millions, each bearing the picture of a youthful Saddam with neatly combed hair and a smart jacket and tie.
"It was not possible to change the banknotes for the time being," Faleh Salman, the acting central bank governor, told Reuters in his chaotic office in an annexe of the central bank compound. "There is no national authority in Iraq at the moment to change the design of the banknotes."
Outside, hundreds of Iraqis thronged the barbed-wire barricades at the entrances to the compound waving fistfuls of 10,000-dinar bills. U.S. troops yelled at them to disperse.
"I came to change these notes because nobody will take them," said Zainab Mohammed, an elderly woman veiled in black. "But nobody will let us in. What am I supposed to do?"
Flanked by U.S. soldiers, the 59-year-old Salman left his office to try to calm the crowd. Sweating in the fierce sun and mopping his brow, he told them truckloads of 250-dinar bills were being sent to banks across Iraq in the next few days.
Salman insists that the 10,000-dinar notes are legal tender and should be redeemed at full face value by banks and merchants. He blames speculators for fuelling the hysteria.
"People are trying to make a profit by saying the notes will become worthless, then buying them for less than face value," he said. Asked how many 250-dinar notes were being printed, he replied: "That's my secret."
U.S. and British officials concede it is embarrassing to have to print Saddam banknotes, but say it is better to lose face -- by temporarily keeping his face on the currency -- than fan the anger of Iraqis about the dinars in their pockets.
They say new banknotes will be designed once an interim Iraqi administration is in place. The exchange rate has gyrated on speculation about the new currency and a postwar influx of dollars.
Some Iraqis have been hoarding the so-called "Swiss dinar", Iraq's pre-1991 currency that does not carry Saddam's face, believing it will be revived. The old and tattered notes are still in use in the north of the country, where Kurds ran an autonomous enclave after the 1991 Gulf War.
The "Swiss dinars", which got their name because they were printed in Europe and are considered harder to counterfeit, are worth far more than the Saddam dinars.
They reached a high of 3.8 to the dollar this month, while it takes more than 1,000 Saddam dinars to buy a dollar.