NY Times article from 1991 reporting the revaluation of the Kuwaiti dinar
Jul 19, 2013
When Iraq invaded Kuwait in August of 1990, the value of the Kuwaiti dinar dropped to about 5 cents. In other words, it took 20 Kuwaiti dinars to buy one dollar.
In February of 1991 Iraq was expelled from Kuwait, and a month later, the banks revalued their currency to $3.47, the highest valued currency in the world. When this occurred, the New York Times reported the event on March 25, 1991.
It still has no water and little electricity or food, but Kuwait revived its banking system today, introducing a new currency.
Banks reopened for the first time since Iraqi occupation forces shut them down in December. Thousands of people lined up to exchange their old Kuwaiti dinars for crisp new ones and to withdraw a limited amount of money....
All other old dinars can be exchanged for new ones on a one-to-one rate until May 7, when the old dinars become invalid. The new official exchange rate is 3.47 American dollars for one new Kuwaiti dinar.
At the same time, the UN put Iraq under trade sanctions, crashing the value of the Iraqi dinar (IQD) from $3.22 to about 4000 to the dollar. Their currency could only be spent in Iraq itself, and people had to carry around wads of 25,000 dinar notes to buy groceries.
Then in 2003 coalition forces invaded Iraq and overthrew Saddam Hussein. By 2004 we gave them a new currency without Saddam's picture on it. The value soon doubled and went up to 2000 to the dollar. A few years ago the Central Bank of Iraq managed to stabilize the value at 1166 per dollar.
On June 27, 2013 the UN removed Iraq from Chapter VII sanctions, allowing Iraq to regain control of close to $80 Billion in frozen funds that had been sitting in western banks since 1990. This also allowed Iraq to be reinstated on the world's banking network, as soon as they are ready. At the same time many expect to see the IQD revalued at or near its former position.
Dr. Stephen Jones