Shafaq News- Kirkuk

Merchants and residents in Kirkuk, northern Iraq, are increasingly struggling to obtain 250-dinar ($0.19), 500-dinar ($0.38) and 1,000-dinar ($0.76) banknotes, with traders reporting shortages of small denominations and growing difficulties using worn or damaged notes in daily transactions.

Abbas Ahmed, a shopkeeper in Kirkuk’s Doctors Street market, told Shafaq News that obtaining the three denominations has become increasingly difficult. “When customers pay with larger notes, some shops ask them to buy another item rather than give them their change.”

Some small-denomination notes reaching shops are also torn, dirty or heavily worn, making merchants and customers reluctant to accept them.

Samer Abdullah, a currency exchanger on Republic Street, noted a sharp increase in demand for small denominations, while supplies remain inconsistent.

Residents and merchants often turn to exchange shops for smaller notes, but the quantities available fluctuate. Some notes brought in for exchange are already damaged and need to be replaced rather than returned to circulation.

Small-denomination notes change hands more frequently than larger ones, making them more vulnerable to wear and tear, Abdullah explained.

Describing the shortage as a daily problem, Hamza al-Jubouri, a wholesaler in Kirkuk’s Citadel Market, told Shafaq News that small amounts of change are often needed in wholesale and retail transactions, leaving merchants with limited options when the required denominations are unavailable.

Some traders hold on to 250-dinar, 500-dinar, and 1,000-dinar notes rather than spend them, fearing they will be unable to replace them later. This further reduces the number of these notes circulating in the market.

Shafaq News’ review of currency issuance data shows that the number of 1,000-dinar notes rose from 718 million in 2022 to 775 million in 2026. The number of 250-dinar notes increased from 795 million to 818 million, while 500-dinar notes fell slightly from 147 million to 145.4 million.

Together, the three denominations accounted for about 1.738 billion notes in 2026, compared with roughly 1.660 billion in 2022, an increase of about 78.4 million notes.

The figures do not indicate how many of those notes are physically available in shops or remain in good enough condition for daily use. They reflect issuance data rather than the number of notes actually circulating or the proportion that has become damaged.

The Central Bank of Iraq (CBI) continues to list 250-dinar, 500-dinar and 1,000-dinar notes among the country’s officially circulating denominations. It has also stated that older notes remain legal tender alongside newer issues.

In an interview with Shafaq News, Economist Ali Khalil said the availability of small denominations should be measured not only by the number of notes issued but also by the number that remain fit for circulation.

Frequent handling makes small-denomination notes particularly vulnerable to damage, meaning some of the issued supply may have been removed from circulation or require replacement.

Khalil pointed out that the existence of more than one billion notes across the three denominations does not necessarily indicate a surplus in the market. “Damaged notes may no longer be usable even if they remain part of the official issuance figures.”

He called for stronger mechanisms to replace damaged notes, ensure a steady supply of new notes and monitor the movement of cash through banks, exchange shops and merchants.

The CBI has procedures for handling damaged banknotes, including criteria for their replacement depending on the type and extent of damage. An electronic service is also available through the Ur platform to submit requests for the replacement of damaged banknotes.

In 2020, the central bank reinstated penalties related to shortages of 1,000-dinar, 500-dinar, and 250-dinar notes, effective Oct. 1 of that year, under rules governing the circulation and replacement of banknotes and their counting and sorting.

Office worker Suhad Ibrahim told Shafaq News that consumers are among those most affected because they have little control over the availability of small denominations when making everyday purchases.

Customers who pay more than the price of an item sometimes do not receive their full change or are asked to buy another item to avoid losing the remaining amount.

The shortage is particularly noticeable in shops, markets and public transportation, where small cash payments are common.

Despite their low face value, 250-dinar, 500-dinar and 1,000-dinar notes remain an important part of Iraq’s cash-based economy. While official figures show an increase in the number of 250-dinar and 1,000-dinar notes since 2022 and a slight decline in 500-dinar notes, merchants in Kirkuk continue to report difficulty obtaining small denominations in usable condition.