ABSTRACT
So long as the vilayets which were later formed into the kingdom of Iraq remained a part of the Ottoman Empire, Ottoman currency prevailed. From April 1916 onwards this was nominally on a gold basis, but it had greatly depreciated because gold was continually being withdrawn from circulation and paper substituted. The British forces during the war brought Indian rupee notes and silver with them and these rapidly displaced Ottoman currency in regions of occupation. This introduction of Indian currency was inevitable for military purchases in Mesopotamia since the armies were at first administered and financed from India, and it continued when the military authorities acted as treasurers of the civil administration. At the end of 1916, in order to avoid the chaos of the two parallel currencies, Turkish currency was demonetized in the occupied areas; a little later a rate of exchange of 14 rupees to one Turkish gold pound was fixed, so that debts in the earlier currency could be paid, the rupee being then stable at 1s. 4d. sterling. Turkish and not British gold coin was, however, still in circulation in Iraq at the end of the war, particularly among the desert tribesmen. For this and other reasons the prohibition on the Ottoman currency was relaxed in 1920.
