This article was co-published by the Trading & Investment Collective
Financial markets have become an increasingly important funding mechanism for the terrorist organisation, ISIS. According to some experts, currency speculation provides ISIS with approximately $20 million each month. It is further suggested, that the investments are propped up by cash looted from Mosul banks in 2014, and stolen pension payments owed to public servants in Mosul, Iraq.
ISIS’s currency speculation involves moving these stolen Dinars over to unsuspecting Jordanian banks. Since the Iraqi Dinar is a fixed currency, the Iraqi government regularly buys and sells the Dinar to influence supply and demand – also assisting in keeping the value of the Dinar pegged at 1 US dollar to 1107.1 Dinar.
ISIS makes a profit from the favourable movement of exchange rates.
$20 million each month is hardly significant, however, when one compares it to ISIS’ other sources of finance. Every month, ISIS earns approximately $100 million from oil sales, $25 million from hostage ransoms, and $3 million collecting rent from annexed buildings. There is also evidence to suggest that somewhere between $500 million and $1 billion has been stolen from Syrian and Iraqi banks over the course of the terrorist group’s lifespan.
To much of the world’s relief, however, ISIS has experienced some financial hardships recently. In early January, a coalition bombing of a cash storage facility destroyed literally millions of dollars, and ISIS’ oil trucks and facilities have also been the target of bombings. These coalition actions, along with a drop in the price of oil, have contributed to a 50% reduction to all ISIS combatants’ salaries early this year. The effects of this would have no doubt been significant. ISIS must pay their combatants in order keep vital services, such as water and electricity, running in conquered areas. If the organisation were unable to do this, they would likely experience an even greater uphill battle.
Thus, it seems that for ISIS, the markets are both a blessing and a burden.
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