Iraqi dinar suffers a rough ride

IT is hardly surprising, but the new Iraqi dinar has been having a bad few months. Although the City has yet to begin trading the new currency, an ersatz market has sprung up on the internet.

Western punters have been piling in through websites such as dinarsforless and daystartrading, run by Bill Burbank, a part-time fireman in California. The new imperialism meets the new economy.

Burbank legally obtains the currency from Middle Eastern go-betweens. Deliveries often occur in a local Starbucks. He has sold more than $500,000 worth so far.

Dinar bulls are struggling. When trading began last October, a dollar bought 420. Now it buys 555 - a 32% drop.

The currency has declined 11% against the dollar in the turmoil of the past five weeks alone. And this is while the dollar itself has fallen.

But the middlemen, as usual, are still making money. In downtown Baghdad the exchange rate is 1,400.