Iraq’s monetary system was administered by the British Mandate of Mesopotamia until 1931, when the Iraq Currency Board was established in London to issue the new Iraqi dinar and maintain its reserves. The Iraq Currency Board pursued a “conservative monetary policy, maintaining very high reserves behind the dinar”, which was “further strengthened by its link to the British pound”.

In 1949, the currency board was replaced by the National Bank of Iraq, which had been founded two years before on November 16, 1947. The National Bank of Iraq became the Central Bank of Iraq in 1956.