Dinar Recovering

BADHDAD, Apr. 3 - The exchange rate fell from 10 dinars to the dollar in 1991 to 3,500 just before Baghdad fell to U.S. forces in April 2003, according to the central bank data.

The dinar has been improving since the last year's auction, trading around 1,400 to the dollar on Tuesday.

"We are satisfied with the present exchange rate. Reaching the 1,500 dinar to the dollar mark was important psychologically," Kasim said.

Inflation soared in the 1990s from the combined effect of U.N. sanctions and the government's printing money. The consumer price index rose from 18 points in 1991 to 5,197 points in 2002.

Kasim said publishing the data would make it difficult for future governments to manipulate monetary policy and would help attract investment, especially to a banking sector undermined by sanctions and the former regime.

Private bank deposits were 1.24 trillion dinars at the end of 2002 compared with 1.52 trillion dinars in government deposits. Banks' credit to the private sector was 312 billion dinars.

Abbas al-Bayati, general manager of the private sector Investment Bank, said the data ushered an era of transparency.

"This is part of general liberalisation," Bayati said. "It will reflect positively on the work of the banking sector."

By Khaled Yacoub Oweis