History of the Iraqi Dinar
The dinar replaced the Indian rupee as Iraq's official currency in 1932. The value of the Iraqi dinar was equal to the British pound (US$4.86) until 1959, when its peg was changed to the US dollar (1 dinar = 2.8 USD). In the early 1970's, major realignments of world currencies as well as the devaluation of the US dollar caused the dinar's value increased to 2.8 USD. This rate remained fairly steady, with a drop to $3.22 USD during the Iran-Iraq war in 1982, until the Gulf War. After the war in 1991, the loss of traditional Swiss printing technology gave rise to the overprinting of inferior quality notes. This caused a drastic devaluation of the dinar. The previous issue became known as the Swiss dinar, which remained in use in the Kurdish section of the country. By 1995, the USD was valued at 3,000 dinars.
Between late 2003 and the beginning of 2004, the Coalition Provisional Authority issued new notes and coins. Old currency was exchanged at a 1:1 rate, except the Swiss dinars (150 new dinars for 1 Swiss). In April 2006, the exchange rate was reported at 1500 dinar per USD, or ID1 to US$$0.00067. There is not a set international exchange rate, however, so international banks are not yet trading the currency.
Sources:
http://en.wikipedia.org/wiki/Iraqi_dinar
http://www.edinarfinancial.net/history.php