The Iraqi dinar exchange rate: between the fragility of a rentier economy and the weapon of the US Federal Reserve
The exchange rate of the Iraqi dinar reveals the depth of the structural crisis of the oil-based economy, where the dollar has turned from a means of exchange into a tool of political influence, which puts Iraq before two bitter choices: either to continue in monetary dependency, or to embark on an arduous path to redefine its financial relationship and build buffers that protect its economic sovereignty.
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The Iraqi dinar exchange rate crisis is no longer just a supply and demand imbalance within the “Al-Kifah Exchange,” but has turned, in the view of observers, into a reflection of the heated political clash between Baghdad and Washington.
Behind the fluctuating figures, fundamental questions arise about the extent to which the Iraqi state can “break free” from the American monetary hegemony, which has been brandishing the “financial card” whenever political and security issues become intractable.
The economy held hostage: fragile infrastructure and financial blackmail
Economic expert Haitham Al-Anbaki believes that the current situation goes beyond the idea of “natural fluctuation”.
In a deeper analysis of the situation, Al-Anbaki points out that the “structural imbalances” in the Iraqi economy – being a rentier economy that depends entirely on oil sales – have made the country an “open arena” for blackmail using financial leverage.
According to Al-Anbaki, American threats and regional tensions not only affect the dollar, but also strike a fatal blow to “food security,” as the prices of basic commodities in local markets move immediately upon the issuance of any political messages from the US Treasury.
This “conditional link” between politics and bread puts the government in a difficult position in the face of street pressure.
The Federal Weapon: A Look at the January 2026 Figures
Based on the data, the gap between the official rate and the parallel market rate (which reached 15% in January 2026) appears to be a “thermometer” of the relationship between Baghdad and New York.
The US Treasury's restrictions on money transfers are not merely technical procedures for auditing remittances, but analysts see them as a technical "veto" that controls the pace of development and liquidity.
The Ministry of Planning points to a 6% increase in inflation, which analysts interpret as a “sovereignty tax” paid by citizens as a result of the struggle over hard currency flows.
Iraq, whose funds are deposited in the Central Bank accounts in New York, finds itself in a legal and historical paradox: it has the money, but it does not have the freedom to dispose of it without an American “green light”.
The politicization of currency: from the military to the banks
Politically, MP Ahmed Al-Sharmani goes even further, considering that Washington has moved from “direct military intervention” to “soft financial intervention.”
Al-Sharmani also asserts that economic pressure is being used today as a tool to shape the political landscape, specifically in sovereign matters such as the selection of the prime minister and the government's foreign policy.
This argument reveals an explicit accusation against previous governments for neglecting “economic fortification,” which left Iraq without “financial buffers” to protect it from the vagaries of political mood in Washington.
The dollar here is not just a currency, but a "carrier of political messages" aimed at imposing specific wills in the upcoming government formation.
The consequences... Does Iraq have the option of "critical rebellion"?
The current crisis also presents complex scenarios; while national forces call for “uniting ranks” and reducing reliance on hard currency, the technical reality clashes with the Iraqi banking system’s connection to the global “SWIFT” system and the absolute American control over oil sales.
It should be noted that Iraq faces the necessity of redefining its financial relationship with the world. Will it succeed in building a parallel economy that reduces dependence, or will the dinar remain hostage to the US Treasury , its value manipulated according to the compass of geopolitical interests in the region?
The rising prices of the dollar and gold are putting pressure on the markets... and the framework discussed raising the official exchange rate!
Iraqi markets are experiencing a state of anxiety and anticipation as the prices of the US dollar and gold continue to rise in recent days. This situation reflects a confluence of internal political and financial factors with external influences, placing the local economy under increasing pressure. There are fears that this rise could become a permanent trend if swift governmental and legislative action is not taken.
Baghdad markets recorded a new surge in the dollar exchange rate, exceeding 154,200 dinars, after having been below 150,000 dinars in recent days.
According to economic experts, this rise cannot be separated from the political instability and the delay in resolving key issues, primarily the formation of the next government. Adding to this is the growing concern over potential US pressure and increasing talk of sanctions or financial restrictions that could affect Iraq, prompting traders and citizens to seek refuge in dollars and gold as safe havens.
In this context, experts believe that recent financial and customs measures have also contributed to increased market confusion, particularly those related to the implementation of the new ASYCUDA system and customs duties, along with the resulting delays in transfers and the difficulty in obtaining dollars at the official rate. A
well-informed government source stated that the Coordination Framework forces discussed several options during their recent meetings to address the escalating financial crisis, including proposals to raise the exchange rate as one of the scenarios being considered to cover increasing public expenditures, given the pressures facing the budget and the state's financial obligations.
The source, who requested anonymity, explained to Al-Mada that this approach is still in the initial stages of discussion and has not yet been formalized into an official decision. However, it reflects the level of concern within political circles regarding the widening gap between revenues and expenditures. He pointed out that any such step would have sensitive social and economic repercussions and could face widespread public opposition.
For his part, economist Haider al-Sheikh explains the reason behind the recent surge in the dollar's value over the past two days, pointing out that the sudden implementation of the ASYCUDA system prompted a number of traders and businessmen to resort to the parallel market to secure dollars. They also diverted imports to ports where the system is not applied, in order to evade the new customs tariff.
Al-Sheikh told Al-Mada that the increased demand for dollars in the parallel market led to a gradual rise in its value over the past month, from approximately 143,000 dinars to around 147,000 or 148,000 dinars, before continuing its upward trend.
He added that the current market turmoil was exacerbated by the parliament's failure to convene a scheduled session to cancel or amend the government's decisions regarding the implementation of the customs tariff. This was interpreted by market participants as a continuation of current policies, which has driven prices even higher, both in the exchange rate and in the prices of basic commodities. He anticipates that the next government will resort to raising the exchange rate to address the financial crisis and maximize revenues.
Speculation disrupts the dollar exchange rate in Iraq, while unofficial channels hinder economic reform.
Al-Fahd said, during his appearance on the “Free Talk” program on Al-Furat satellite channel, that: “The rise in the price of the dollar is not related to monetary factors as much as it is the result of commercial speculations within the parallel market,” noting that “the citizen lacks a culture of consumption, which negatively affects the movement of the market.”
He explained that "the Central Bank, through the application of modern systems and the expansion of financial inclusion, has imposed greater control over financial transfers," stressing that "its monetary policy contributes to maintaining low inflation levels and protecting the purchasing power of vulnerable classes, as well as covering all hard currency demands."
He pointed out that "there are unofficial outlets that must be controlled, with the need to tighten control over imported goods that enter from a country other than the country of origin," indicating that "the success of the Iraqi trader is achieved through obtaining an official agency for parent companies."
Al-Fahd stated that "completing the development road project will open the door to the establishment of a global market in Iraq," stressing that "government and private banks have correspondent relationships with international banks, and all of them are subject to strict auditing processes."
He pointed out that "the Skoda system contributes to curbing informal trade and regulating import operations," stressing that "most economic problems have political roots, represented by the existence of unofficial border crossings in the Kurdistan Region, which calls for real coordination between the central and regional governments."
He stressed that "the next government is required to make the economic and reform program its top priority," noting that "the problems are identified, but they need a real political will away from agendas, as political disputes were a direct cause of the decline in the economy."
Al-Fahd concluded by emphasizing "the importance of protecting the local market by enforcing customs policy and regulating the entry of goods, in addition to imposing taxes in a way that strengthens the national industry."
As part of the government’s efforts to regulate the market and enhance monetary stability, the relevant financial institutions continue to implement a package of integrated policies aimed at protecting the exchange rate of the Iraqi dinar and reducing the impact of emerging changes on the national economy, especially with regard to the price gap between the official and unofficial markets for foreign currencies.
For the past two days, Iraqi markets have witnessed fluctuations in the exchange rate of the US dollar, which has exceeded 150,000 dinars.
Jassim Al-Aradi, a member of the Baghdad Economic Forum, said that the recent increases in exchange rates within the local markets came as a result of the overlap of a group of factors, most notably the application of the “Askoda” system, which prompted some traders to look for quick alternatives to secure the requirements of their foreign trade.
Procedural paths
He added to “Al-Sabah” that some traders turned to the parallel market to obtain dollars, due to the delays or procedural paths that accompanied the first stages of implementing the system, which led to an increase in the unregulated demand for foreign currency, and directly affected the movement of the market and price levels.
Real demand
Al-Aradi stated that the Central Bank of Iraq continues to play its role in meeting the real demand for dollars for foreign trade purposes, through official channels, and in accordance with compliance controls and international standards.
He pointed out that addressing these increases requires giving the market a period of time.
Sufficient to adapt to the new mechanisms, along with simplifying procedures and intensifying coordination between the concerned parties, which contributes to reducing recourse to the parallel market, restoring balance to the exchange market, and maintaining the stability of the dinar and the confidence of dealers in the adopted monetary policies.
The Prime Minister’s financial advisor, Dr. Mazhar Muhammad Saleh, told Al-Sabah:“Reducing the gap between the official exchange rate in the organized market and its counterpart in the unorganized market is not a single monetary decision, but rather a conscious coordination between fiscal and monetary policy, supported by financial reforms that contribute to strengthening confidence and reducing risks.”
economic behavior
Saleh pointed out that this coordination aims to redirect economic behavior from hedging and speculation to stability, through the continuation of financial and trade policies and in full cooperation with the Central Bank of Iraq, in a way that enhances monetary stability and preserves the purchasing power of the citizen.
He stressed that controlling public spending and directing it towards development priorities, along with regulating the demand for foreign currency through official banking channels, represent two fundamental pillars in reducing the artificial pressures on the parallel market and narrowing the gap between the official and parallel prices, in line with the objectives of monetary stability stipulated in the Central Bank of Iraq Law No. (56) of 2004.
Boosting confidence in the dinar
Saleh explained that the monetary authorities' continued adoption of a policy to defend the exchange rate, supported by strong foreign reserves, in conjunction with liquidity management and bolstering confidence in the national currency, has contributed to maintaining stable prices for basic commodities and citizens' living standards within safe inflation ranges. He pointed out that these measures are part of a broader reform path aimed at enhancing the transparency of public finances, improving compliance with the global financial system, and supporting the resilience of the banking sector, thereby consolidating economic stability and strengthening the confidence of citizens and stakeholders in the national economy.
Market regulation
For his part, economist Ziad al-Hashemi told Al-Sabah that regulatory and control measures in local markets directly contribute to reducing speculation, which in turn reduces artificial demand for dollars in the parallel market, even if it doesn't eliminate it entirely. Al-Hashemi explained that factors contributing to high exchange rates remain, especially with the implementation of new systems such as the unified customs system (ASYCUDA), which was accompanied by uncontrolled demand for dollars, leading to additional pressure on the exchange rate in the recent period.
cash reserve
For his part, Dr. Sadiq Al-Rikabi, Director of Economic Research at the Global Center for Development Studies in the United Kingdom, pointed out that the Central Bank of Iraq's reserves represent the first line of defense for the dinar. He explained that the reserves' ability to meet the demand for dollars during any significant increases contributes to strengthening public and commercial confidence in the national currency. Al-Rikabi also addressed the issue of inflation, clarifying that the rise in prices is not related to monetary inflation, but rather to structural inflation stemming from Iraq's heavy reliance on imports to meet its needs. This creates a continuous demand for dollars and affects the exchange rate.
Expert: The Central Bank intends to eliminate the gap between the official dollar exchange rate and the parallel market rate.
Qusay said, during his appearance on the “Free Talk” program on Al-Furat satellite channel, that: “The Central Bank is working to reduce the price gap to zero through well-thought-out procedures involving specialists aimed at controlling the movement of the dollar and limiting irregular speculation.”
He explained that “about 70 percent of the private sector is still outside the Skoda system, which weakens control over foreign trade,” noting that “the American company K2 is monitoring and tracking irregular trade in Iraq.”
Qusay stressed that "addressing this issue requires collective management and high-level coordination to control the trade system, especially at border crossings," indicating that "the transition of the Iraqi economy from a closed system to a free economy requires a clear roadmap and linking Iraq to clean and transparent global markets."
He revealed that there is a timetable and ongoing meetings with Oliver Wyman, stressing that the banks that were sanctioned have had restrictions lifted from them after complying with the Central Bank’s procedures, especially in the field of technology investment and banking governance.
He pointed out that "the Skoda system actively contributes to strengthening the banking system and regulating foreign trade," explaining that "controlling the entry of goods requires the adoption of advanced technological systems through long-term contracts."
Qusay concluded his remarks by pointing out that "Iraq has taken decisions to ban the import of some goods, including gold and mobile phones, as part of a policy to regulate imports and control market activity."
The Iraqi economy: US pressure and a liquidity crisis threaten financial stability.
Worrying indicators show the fragility of the Iraqi economy, with escalating external pressures and fluctuating oil prices, in parallel with an internal liquidity crisis that has begun to affect salaries and markets.
At a time when Iraq faces complex political and economic challenges, alarming indicators of a fragile financial situation are mounting, amidst ongoing US pressure, sharp fluctuations in oil prices, and a domestic liquidity crisis that is beginning to directly impact the lives of citizens and local markets. These factors combined are putting the Iraqi economy to a difficult test and raising serious questions about the government's ability to contain the repercussions and maintain economic stability in the coming period.
In this context, economist Bassem Anton stressed that Iraq is subjected to multi-dimensional pressures, in which political and economic considerations are intertwined, noting that these pressures are used to achieve gains related to sensitive regional issues, most notably the Palestinian issue, the Iranian file, and the power struggles in the region.
Anton explained that the United States adopts an approach of pressure, threats, and then gradual retreat as part of managing its political interests, indicating that Iraq is still unable to draw clear paths to deal with these pressures in a way that protects its economy.
He added that a drop in oil prices to levels that could reach $45 a barrel, in the event that the markets are flooded with Venezuelan oil, will directly affect the Iraqi economy, noting that the general budget depends on oil revenues by nearly 90%, which means a possible deficit in the implementation of projects, disruption of reconstruction plans, and exacerbation of service problems.
Employee salaries
In parallel, economist Mustafa Al-Faraj warned that the continued delay in paying the salaries of employees and retirees is a dangerous indicator of a severe liquidity crisis that could lead to a gradual paralysis of local markets.
Al-Faraj explained that more than 60% of consumer activity in Iraq depends on a fixed monthly income, stressing that any delay in salaries immediately affects purchasing power and leads to a recession that begins with non-essential goods before extending to food items.
He pointed out that the repercussions of the crisis are not limited to citizens , but also put pressure on traders and small business owners, and lead to a slowdown in the cash cycle, which negatively affects tax revenues and commercial activity in general.
Al-Faraj linked the salary delay crisis to the increasing financial deficit, explaining that internal debts exceeded 80 trillion dinars, and warning of a monthly liquidity crisis if the structural imbalance in public finances is not addressed.
He stressed that the solution lies in real reforms that include reducing unnecessary expenditures, reviewing the salaries and allowances of senior officials, and controlling public spending, in order to ensure the sustainability of salaries and market stability.
Between external pressures controlling oil prices and an internal liquidity crisis threatening the regularity of salary payments, the Iraqi economy faces complex challenges that require bold decisions and urgent reforms. Continued over-reliance on oil and the postponement of financial solutions portend deeper repercussions that could affect economic and social stability, compelling the government to act swiftly to avert a recession that will be difficult to contain in the future.
Among them the collapse of the dinar... Report: Three economic cards in Trump's hand to "undermine" Maliki's rule
A press report published by the Al-Sharq Economic website on Thursday, January 29, 2026, identified what it described as "economic pressure points" that US President Donald Trump could use to "undermine" Nouri al-Maliki's rule, should he assume the premiership.
The report, which was followed by “Al-Jabal”, said that “Baghdad’s calculations regarding the possible return of Nouri al-Maliki to the Iraqi government have turned 180 degrees after the US president explicitly threatened Iraq that if al-Maliki, known for his leanings towards Tehran, were to enter the government through the door, US protection would immediately leave through the window.”
The website analyzed US President Donald Trump’s tweet in which he rejected al-Maliki’s nomination, saying that “Trump, who is known for his sharp tone, used three explicit threats in his tweet to express his opposition to al-Maliki’s election: no more aid to Iraq if he wins, no chance for Baghdad to succeed, and the country may sink into chaos and poverty.”
The report continued, "This threat should not be read in isolation, but rather within a much broader economic context where the United States already has cards above and below the table that it can use to pressure—and even paralyze—any government in Baghdad that is not to Trump's liking, and oil, which finances about 90% of the state's revenues, is at the heart of this equation."
The report recalled al-Maliki's rule, noting that it "witnessed a gradual negative shift in economic cooperation with Washington. In his early years, Iraq benefited from a high influx of oil revenues, but weak oversight of the banking system made the country an easy environment for dollar leakage, especially after the tightening of US sanctions on Iran. This put Baghdad on a collision course with Washington's financial priorities, according to the British newspaper, the Financial Times. In the energy sector, despite launching major oil licensing rounds after 2009, the government tended to diversify partnerships towards Chinese and Russian companies, while Iraq continued its almost complete dependence on Iranian gas and electricity. This limited US influence and was reflected in the cooling of financial cooperation and the growth of Iranian influence at the time—a scenario that Washington fears will be repeated if al-Maliki returns to power."
The website quoted economist Abdul Rahman Al-Sheikhly as saying that "if Maliki wins, there will be complications for the Americans in realizing the extent of Maliki's ties to Iran, and this contradicts the American desire to cut off any communication between Baghdad and Tehran."
However, Abdul Rahman Al-Mashhadani, a professor of international finance at the Iraqi University, disagrees with Al-Sheikhli's analysis, as he believes - according to what was reported by Al-Sharq - that "the victory of Al-Maliki - or anyone else - will not affect those interests; because Al-Maliki will take into account that all centers of power are now concentrated in the hands of Washington, and he is unable to do without them."
The report identified three economic cards that it said Trump could use to "play on Iraq's nerves": Iraqi oil money protected by a decision of the US president, as the United States has effectively controlled Iraqi oil revenues since the 2003 invasion by managing them through the Federal Reserve. The aim of this step at the time was to protect Baghdad from sanctions and accumulated issues from the era of former regime leader Saddam Hussein. Iraq's oil export revenues in 2024 amounted to more than $95 billion, according to data from the Central Bank of Iraq.
As for the second paper, according to Al-Sharq, it is: “Restricting dollar transfers to Iraq, as happened in the last three years, when Washington sanctioned banks on the pretext of money laundering and financing terrorism, and to this day these banks are still subject to the sanctions imposed by the US Treasury Department and the US Federal Reserve.”
The third and final point, according to the website, is: “Indirectly causing the collapse of the Iraqi dinar and worsening social conditions by restricting access to the dollar, which will fuel inflation, especially since Iraq, during the two decades following the invasion, was unable to build an agricultural or industrial base that would meet the needs of the local market. 90% of the market’s needs are imported with hard currency, even those imported from neighboring Arab countries such as the UAE.”
The report stated, "Besides that, there are other indirect sources of pressure that Washington can use to besiege Iraq, most notably the threat of military aid. More than 70% of the Iraqi army's armament is still of American origin, whether through new contracts or what the American army left behind after withdrawing from Iraq."
The website quoted political researcher Nabil Al-Azzawi as saying in this context that "the coordinating framework that nominated Maliki must read Donald Trump's message economically in light of the country's current delicate situation, limited options, and lack of consensus."
The report noted that "Iraqi investments in US Treasury bonds could also be restricted. According to data from the US Treasury Department, Iraq's holdings of these bonds amounted to about $32 billion as of October 2025."
The report continued, "According to Al-Sheikhly, another source of concern is the disruption of the work of intermediary American banks, such as Citibank and JPMorgan, which facilitate Iraqi trade and on which Baghdad relies for international transfers and the movement of funds to and from the country. Foreign investments may also be affected, as investors always seek political and security stability, which may be disrupted if Maliki assumes power against Washington's wishes."
Regarding the potential impact on the oil market if US threats against Iraq escalate, the Asharq report indicated that “so far, Trump’s threats against Iraq have not had any direct effects on the oil market, despite Brent crude prices rising to nearly $70 a barrel recently due to his intense pressure and military threats against Iran, something that could increase if Iraq becomes more involved in the conflict.”
The report noted that "any potential disruption to Iraqi oil flows could have a direct impact on the market, as Iraq is the second largest oil producer in OPEC after Saudi Arabia, and its production comes directly after Saudi Arabia and Russia within the OPEC+ alliance."
According to Al-Sharq report, "If Maliki's rise to power leads to disruptions in the sector, it may absorb part of the current oil surplus in the market."
The Iraqi economy: US pressure and a liquidity crisis threaten financial stability.
Worrying indicators show the fragility of the Iraqi economy, with escalating external pressures and fluctuating oil prices, in parallel with an internal liquidity crisis that has begun to affect salaries and markets.
At a time when Iraq faces complex political and economic challenges, alarming indicators of a fragile financial situation are mounting, amidst ongoing US pressure, sharp fluctuations in oil prices, and a domestic liquidity crisis that is beginning to directly impact the lives of citizens and local markets. These factors combined are putting the Iraqi economy to a difficult test and raising serious questions about the government's ability to contain the repercussions and maintain economic stability in the coming period.
In this context, economist Bassem Anton stressed that Iraq is subjected to multi-dimensional pressures, in which political and economic considerations are intertwined, noting that these pressures are used to achieve gains related to sensitive regional issues, most notably the Palestinian issue, the Iranian file, and the power struggles in the region.
Anton explained that the United States adopts an approach of pressure, threats, and then gradual retreat as part of managing its political interests, indicating that Iraq is still unable to draw clear paths to deal with these pressures in a way that protects its economy.
He added that a drop in oil prices to levels that could reach $45 a barrel, in the event that the markets are flooded with Venezuelan oil, will directly affect the Iraqi economy, noting that the general budget depends on oil revenues by nearly 90%, which means a possible deficit in the implementation of projects, disruption of reconstruction plans, and exacerbation of service problems.
Employee salaries
In parallel, economist Mustafa Al-Faraj warned that the continued delay in paying the salaries of employees and retirees is a dangerous indicator of a severe liquidity crisis that could lead to a gradual paralysis of local markets.
Al-Faraj explained that more than 60% of consumer activity in Iraq depends on a fixed monthly income, stressing that any delay in salaries immediately affects purchasing power and leads to a recession that begins with non-essential goods before extending to food items.
He pointed out that the repercussions of the crisis are not limited to citizens , but also put pressure on traders and small business owners, and lead to a slowdown in the cash cycle, which negatively affects tax revenues and commercial activity in general.
Al-Faraj linked the salary delay crisis to the increasing financial deficit, explaining that internal debts exceeded 80 trillion dinars, and warning of a monthly liquidity crisis if the structural imbalance in public finances is not addressed.
He stressed that the solution lies in real reforms that include reducing unnecessary expenditures, reviewing the salaries and allowances of senior officials, and controlling public spending, in order to ensure the sustainability of salaries and market stability.
Between external pressures controlling oil prices and an internal liquidity crisis threatening the regularity of salary payments, the Iraqi economy faces complex challenges that require bold decisions and urgent reforms. Continued over-reliance on oil and the postponement of financial solutions portend deeper repercussions that could affect economic and social stability, compelling the government to act swiftly to avert a recession that will be difficult to contain in the future.
January 2026: A month of economic shocks in Iraq: The dollar soars, the government tightens its belt, and markets teeter on the brink of anxiety.
A difficult month for the citizen's pocket
January 2026 was not an ordinary month in the economic memory of Iraqis. Rather, it was one of the most volatile and stressful months in years, as it coincided with internal and external shocks, from the instability of the exchange rate and the fluctuation of oil prices, to unprecedented government austerity decisions, and service and living crises that affected fuel, gas, and jobs, at a time when global markets were redrawing the map of gold and silver prices, while the American-European trade war returned to the forefront with shocking decisions from US President Donald Trump.
The dollar… a shocking surge and a confused market.
In January 2026, the US dollar experienced a worrying jump in the parallel market, reaching an exchange rate of 157,000 dinars per 100 dollars.
Despite official attempts to calm the situation, the gap between the official and market rates remained wide, fueling speculation, reviving informal money transfer networks, and confusing both traders and consumers.
The Central Bank settles the budget figure... but the market is not convinced.
In an attempt to impose stability, the Central Bank of Iraq addressed the Ministry of Finance, confirming that the official exchange rate adopted in the 2026 budget is 1300 dinars to the dollar, which is the rate that has been in effect since February 2023.
Official sources revealed the mechanism, as follows: “The dollar is purchased from the Ministry of Finance at 1300 dinars, sold to banks at 1310 dinars, and reaches traders and foreign transfers at 1320 dinars.”
Oil: From a sharp decline to a cautious recovery
globally. Oil opened January with a sharp drop to $57 a barrel, raising serious concerns about Iraq's ability to meet its financial obligations, especially given the ballooning wage bill and subsidies.
However, prices later rebounded to settle near $65 a barrel, partially easing the anxiety, though not entirely dispelling the concerns, particularly in light of global volatility, trade tensions, and recent US decisions.
Unprecedented austerity measures
were the defining feature of January 2026, marking a clear shift towards austerity policies. The Cabinet approved a broad package of decisions aimed at reducing spending and maximizing revenues. Among the most prominent were: selling government vehicles older than 15 years, as well as any unusable or surplus vehicles and equipment; prohibiting the purchase or replacement of new vehicles; reducing government fuel quotas by 50%; mandating that government institutions switch to solar energy within six months; halting inter-ministerial transfers that would increase budget allocations; and suspending overseas scholarships and study leaves for five years.
These decisions came as a shock to employees and sent a clear message that the government had entered a phase of managing a genuine financial crisis.
Professional qualifications: Widespread controversy and a delayed clarification.
One of the most controversial decisions was the exclusion of qualifications obtained by employees during their service for promotion or bonus purposes.
Despite public outrage, the Ministerial Council for the Economy reiterated that the decision was not retroactive and did not include qualifications obtained before January 2, 2026, in an attempt to quell the discontent.
The cooking gas crisis: Reality contradicts official statements
. In stark contrast, the price of a cooking gas cylinder has risen to 15,000 dinars in some areas, despite the Ministry of Oil's repeated assurances that there is no crisis and its announcement of producing 160,000 cylinders daily in Baghdad.
The crisis has exposed a clear flaw in distribution and oversight, and has forcefully revived the issue of monopolies and the black market.
Erbil... Industrial Fire and Human Losses:
Erbil witnessed a painful economic and humanitarian incident after a fire broke out in a potato chip factory within the Pirzin industrial complex.
The fire lasted for more than five hours and was extinguished by 25 civil defense teams. The incident resulted in: “The loss of jobs for approximately 200 workers, injuries to two civil defense personnel, and significant material losses in the local industrial sector.”
Border crossings... a drain on revenue.
The head of the Border Crossings Authority sparked widespread controversy after revealing the existence of six unofficial border crossings in the Kurdistan Region whose revenues do not reach the federal treasury.
He asserted that these crossings "attract traders due to the difference in fees, depriving the state of billions of dinars and creating a serious competitive imbalance."
A well
-informed source revealed that most government ministries and institutions have not yet received their employees' salaries due to a lack of liquidity.
The source stated that despite the Ministry of Finance's requests for ministries to provide payroll lists and schedules for employee funding, most ministries have still not received their staff's salaries by the end of the month. The source
explained that ministry representatives contacted the Ministry of Finance to complete the necessary procedures, but the funding for salaries has not been fully finalized, leading to the delay in disbursement.
The source indicated that among the reasons for the delay is the shortage of cash in government banks, as well as difficulties in securing funds, which has negatively impacted the regularity of salary payments.
Employees' salaries have not been released as of the 28th of the month, even though they are usually disbursed between the 20th and 25th, causing concern and resentment among employees.
Gold and silver: A mass exodus to safe havens.
Locally, the price of gold exceeded 1,150,000 dinars per mithqal, while globally, gold approached $5,400 per ounce and silver surpassed $113 for the first time.
This surge reflects a state of global and local anxiety, prompting Iraqis to convert their savings into precious metals.
Trump revives the specter of a trade war
abroad. US President Donald Trump sparked a new crisis by imposing 10% tariffs on 8 European countries, threatening to raise them to 25%, over the Greenland issue, which has further destabilized global markets and energy and metal prices.
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Breaking | Iraq Observer exclusively reports: Savaya's mission as Trump's envoy to Iraq has been officially terminated due to his involvement in corruption cases.
An informed source told Iraq Observer today (Thursday) a major surprise regarding the fate of Mark Savaya, US President Donald Trump’s envoy to Iraq.
According to the informed source, an official decision has been issued to end Savaya’s mission in Iraq as of today (Thursday).
He added that Savaya had been found guilty of serious corruption charges, which prompted swift American action to terminate his mission in Iraq.
Social media was abuzz today with news of Savaya's official X account being deleted without any explanation.
Later, an Iraqi MP hinted that Savaya had left Iraq with a sum of money, without naming him.
Savaya, an American of Iraqi Christian origin who was appointed by President Trump as his envoy to Iraq after being one of the main supporters of Trump’s election campaign, has always threatened to expose corruption files on Iraqi politicians and has published many tweets containing various warnings and alerts.
The informed source added that he does not expect the decision to terminate his mission to be announced publicly, but that the Iraqi side has already been notified of this decision.
Savaya was born on July 2, 1985, in Nineveh Governorate.
Mark Savaya worked in the retail sector before co-founding Future Grow Solutions in Birmingham, Michigan, after cannabis was legalized in Michigan in 2018.
In 2019, Savaya purchased an industrial complex formerly owned by Charter Steel. His company established a chain of marijuana stores called Leaf and Bud, headquartered in Detroit.
n September 2025, Savaya helped broker the release of Elizabeth Tsurkov, a Russian-Israeli researcher who had been kidnapped by an armed group in Baghdad in 2023. After her release, Tsurkov publicly thanked Savaya on social media.
On October 19, 2025, President Donald Trump appointed Savaya as the United States Special Envoy to Iraq.
Ministry of Planning: The World Bank is proceeding with opening a dedicated office in Baghdad.
A statement from the ministry, a copy of which was received by Al-Furat News, stated that: “This came during a joint meeting with the World Bank team to discuss new projects in the current year’s budget 2026, within the framework of strengthening joint development cooperation between the two sides, in the presence of the World Bank’s Regional Director for the Middle East, Jean-Christophe Carré.”
Undersecretary for Technical Affairs Maher Hammad Johan said, “This meeting is an important step to frame the future relationship, whether at the level of the government or sectoral institutions, with the World Bank,” explaining that “the new projects were prepared in coordination with the various government institutions and ministries, especially the Ministry of Finance, in addition to the Prime Minister’s Office.”
He added, "The meeting was fruitful, during which the extent to which the Iraqi government can prepare its commitments to move forward under the umbrella of joint work with the World Bank was discussed, as well as which sectors will be targeted and the time limits for those projects." He explained that "higher authorities will be addressed regarding what the World Bank will provide in order to benefit from it in organizing priorities before proceeding with the new budget law."
Johan noted that "the World Bank is proceeding with opening a special office in Baghdad, which confirms the bank's support for the government, given that Iraq has taken excellent steps, and that they are ready to provide greater support in the field of joint cooperation with Iraq."
Iraqi-international meeting to discuss financing strategic projects within the 2026 budget
he Ministry of Planning held a joint meeting today, Thursday, with the World Bank team to discuss new projects within the current year’s budget 2026, as part of strengthening development cooperation between the two sides, in the presence of the World Bank’s Regional Director for the Middle East, Jean-Christophe Carré.
The ministry stated in a press release received by Dijlah News that the Undersecretary for Technical Affairs, Maher Johaan, affirmed that the meeting represents an important step in framing the future relationship, both at the governmental and sectoral institutional levels, with the World Bank. He explained that the new projects were prepared in coordination with relevant government institutions and ministries, particularly the Ministry of Finance, in addition to the Prime Minister's Office.
He added that the meeting included discussions on the Iraqi government's ability to fulfill its commitments to move forward within the framework of joint work with the World Bank, as well as identifying the targeted sectors and timelines for project implementation. He explained that higher authorities will be consulted regarding the World Bank's offerings, with the aim of utilizing them to prioritize needs before proceeding with the new budget law.
Johan noted that the World Bank is proceeding with opening a special office in Baghdad, reflecting its support for the Iraqi government, and affirmed the bank's readiness to provide greater support in areas of joint cooperation.
The meeting was attended by a number of directors general in the ministry, representatives of the World Bank for the water and transport sectors, in addition to the World Bank team in Baghdad.
raqi Shia bloc voices concern over US stance on Maliki, stresses need for ‘realism’
Ahmad al-Saadi, a member in the Ammar Al-Hakim’s Hikma Movement, addressed the group’s stance following U.S. President Donald Trump’s public rejection of Nouri al-Maliki’s potential return to power, calling the intervention painful but emphasizing the need for realism in managing Iraq’s international relations.
In a televised interview with Al Rabiaa TV, al-Saadi said the Hikma Movement is dismayed by what he described as an “overseas matter” interfering in Iraq’s domestic political decisions. However, he said the party believes “realism is very much needed,” noting that Iraqi oil revenues held in U.S. accounts could be delayed, potentially triggering public unrest and the fall of the government.
Al-Saadi stated, “Our decision in Hikma is that we will not participate in Mr. Maliki’s upcoming government if he is passed, but at the same time, we said we will not oppose or obstruct. This was our position in the Coordination Framework session where Mr. Maliki was nominated.”
Following Trump’s statement, al-Saadi said some Iraqi factions, particularly Kurdish and Sunni groups, are unlikely to support a government led by Maliki.
“We are among the most hurt by Trump’s statement… we do not accept Trump making a decision from across the oceans that seems to break the Shia house. This is very painful for us,” he said.
He added that Trump’s personal involvement and direct rejection of Maliki’s candidacy exceeded expectations. “We expected at most a letter, an opinion, or something written,” he said.
Trump wrote Tuesday on Truth Social, “I’m hearing that the Great Country of Iraq might make a very bad choice by reinstalling Nouri al-Maliki as Prime Minister. Last time Maliki was in power, the Country descended into poverty and total chaos. That should not be allowed to happen again. Because of his insane policies and ideologies, if elected, the United States of America will no longer help Iraq and, if we are not there to help, Iraq has ZERO chance of Success, Prosperity, or Freedom. MAKE IRAQ GREAT AGAIN!”
Several Iraqi Shia political parties and figures issued statements on Wednesday rejecting U.S. ‘interference’ in Iraq’s internal affairs following comments by U.S. President Donald Trump warning against the potential return of Nouri al-Maliki as prime minister.
The US Monitor: Sudani is the biggest beneficiary of Trump's criticism of Maliki
A report published by the American newspaper Al-Monitor highlighted the repercussions of the recent statements by US President Donald Trump against former Iraqi Prime Minister Nouri al-Maliki, considering that these statements revived the debate about al-Maliki’s chances of returning to the premiership, and at the same time strengthened the position of the current Prime Minister, Mohammed Shia al-Sudani, as a more balanced and acceptable option locally and internationally.
The report, translated by Iraq Observer, indicated that Maliki still faces widespread rejection inside and outside Iraq, due to his political responsibility during a period that witnessed a major security collapse and the rise of ISIS in 2014, a heavy legacy that still casts a shadow over any attempt to return to the political forefront.
She added: “Trump’s criticism also served as a reminder of the negative role played by Maliki, according to the American perspective, which makes it difficult for him to gain real external or internal support.”
In contrast, the report suggests that “Mohammed Shia al-Sudani appears to be a more likely candidate to lead the next phase, given that he is seen by observers as a less confrontational figure and more balanced in dealing with international parties, especially the United States and Iran.”
According to the report, Al-Sudani is a preferred choice within the coordinating framework forces, and he also enjoys a degree of acceptance at the international level, which makes him a candidate to continue as head of government or to lead the post-election phase.
The report concluded that the balance is gradually shifting in favor of al-Sudani, while al-Maliki's chances remain weak, unless major political developments occur that reshuffle the cards in the Iraqi scene.
The end of corruption is near
After the religious authority's voice went unheard, Savaya opens the "forbidden documents": We will hold the powerful accountable.
The highest religious authority once said that "the battle against corruption is more difficult than the battle against terrorism." At the time, the statement was read as a general moral and political warning, before it turned, over the years, into an accurate description of a governing structure in which networks of money, power, and weapons were intertwined, until corruption became more like a "parallel system" that lives inside the state, not outside it.
Yesterday, this phrase resurfaced, but through an unconventional gateway: a tweet attributed to US President Donald Trump’s envoy to Iraq, Mark Savaya, in which he hinted at revealing corruption files involving prominent government officials and politicians, in a message that many interpreted as a direct threat to the “corrupt club” at a highly sensitive regional and domestic moment.
Savaya enters the "battle against corruption"... Is it external pressure or settling scores?
In an initial reading of this development, political and strategic affairs expert Hussein Al-Asaad confirms that what was recently raised about the threat by US President Donald Trump’s envoy to Iraq to reveal corruption files involving prominent government officials and politicians is “a very sensitive development with political dimensions that go beyond the media framework.”
Al-Asaad told Baghdad Today that “such threats cannot be separated from the context of increasing international pressure on the political class in Iraq, especially with regard to the files of financial and administrative corruption, abuse of power, and management of state resources during the past years.”
He explains that “using corruption files as a political pressure tactic reflects a lack of confidence in the internal procedures for addressing these issues, and puts Iraqi regulatory and judicial institutions to a real test to prove their independence and ability to deal with any information or evidence presented, regardless of its sources or the names involved.”
Al-Asaad adds that “the threat of revealing files concerning prominent figures may carry multiple messages; the first is to the Iraqi interior about the need to rearrange the political scene and hold the corrupt accountable, and the second is to the outside world that the United States still has cards to play within the Iraqi arena.”
He added that "the most dangerous aspect of these statements is their potential impact on political stability and public confidence, especially if they are not handled wisely and transparently, or if they are used to settle political scores. Addressing corruption cases should be done through legal and official channels, not through media threats or leaks."
The political and strategic affairs expert concluded by saying that "the current stage requires a clear position from the Iraqi government, either by categorically denying these allegations and supporting them with evidence, or by opening official and serious investigations into any files that are raised, in order to protect the reputation of the state and its institutions, and in response to the demands of the public to combat corruption and hold those involved accountable without exception."
Corruption in Iraq is an interconnected system, not isolated cases.
What makes the Savaya threat so dangerous is not merely its external source, but the internal environment in which it operates. Over the past years, corruption in Iraq has transformed from the "deviant behavior" of some officials into a "comprehensive system" involving political parties, economic fronts, contractors, and first, second, and third-tier officials.
Numerous press and monitoring reports – including dozens published by "Baghdad Today" – have repeatedly warned that corruption is no longer just a bribe here or a stalled contract there, but a complex network spread across several levels, most notably:
- Major project contracts: where the referral is transformed from a technical file into a political-financial deal, in which percentages are distributed among influential parties, while the citizen pays the cost of a project that is stalled, incomplete, or not completed at all.
-Border crossings and ports: which constitute a parallel "financial lifeline" through which goods, fees, and unofficial levies pass, and whose revenues are used to strengthen the influence of internal forces instead of supporting the public treasury.
-The currency auction and the private banking sector: where international and local reports have converged on the use of the financial system in currency smuggling, money laundering, and financing networks of political and economic interests.
-Public jobs and appointments: which have turned into “spoils” granted on the basis of party and sectarian loyalty, while the citizen sometimes pays for a job from his own money, in “buying and selling” mafias within the departments.
Tailor-made law: When legislation, instructions, or exceptions are tailored to serve specific parties, to cover up opaque contracts, or to restrict regulatory bodies instead of empowering them.
This overlapping picture explains why the religious authority considered the “battle against corruption to be more severe than the battle against terrorism”: terrorism is confronted by security and military agencies that are given clear orders, while corruption is deeply entrenched within the institutions themselves, has the ability to disrupt laws, silence oversight, and reproduce itself with each election cycle.
Forms of corruption: from contracts and salaries to exploiting the "anti-corruption" slogan itself
Corruption, as evidenced by files and field reports, is no longer limited to "stealing public funds" or "bribery" in the traditional sense, but has taken on multiple forms, some more dangerous than others:
-Corruption in government contracts: through inflating costs, awarding projects to unqualified companies, manipulating specifications, or leaving projects stalled for years while still receiving payments.
Corruption in salaries and job grades: through ghost employees, double salaries, acquiring undeserved allowances, or selling grades at the expense of competence and experience.
-Corruption in the management of natural resources: from oil and gas to agriculture and water, where technical decisions are turned into political bargaining chips and areas of illicit enrichment.
Corruption in daily service files: from electricity to health, education and municipalities, where public money is wasted on patchwork solutions that do not change reality, but feed networks of contracts and contractors.
Corruption disguised as “combating corruption”: This is one of the most dangerous forms, when reform slogans are used to blackmail political opponents, or to redistribute shares under the banner of “purification,” without changing the corrupt rules that produce the same class.
Who is responsible for this system? When the bloodshed was lost among the politicians
The question of responsibility for corruption in Iraq is inseparable from the question of responsibility for the fall of provinces to ISIS. In both cases, Iraqis experienced a similar scenario: a major catastrophe, investigative committees, loud speeches, and ultimately, a single conclusion: "Everyone is responsible," and thus, no one was held accountable.
The same pattern was repeated in the corruption file: all the political forces verbally condemned corruption and demanded that the "big fish" be brought to justice, but no one named their allies and accomplices. Committees were formed, reports were written, and alarming figures about waste and theft were published, then everything ended up within the confines of political compromises.
This “deliberate generalization” of responsibility has made it difficult for the judiciary to follow a single thread to its end, as cases are often closed at the level of a “scapegoat” from the middle or lower ranks, while the real decision-making centers remain outside the circle of accusation.
The result is that corruption is no longer just a deviation from the system, but in many cases has become the system itself: the way positions are distributed, contracts are managed, alliances are built, election campaigns are financed, and loyalties are secured inside and outside parliament.
Will Savaya's threat break the closed circle, or will it turn into a new blackmail tactic?
American intervention through the threat of corruption files presents a complex equation:
On the one hand, it cannot be denied that any documented disclosure of real documents and evidence of corruption by senior officials may constitute a rare opportunity to break the wall of political immunity, and open the door for the judiciary and public opinion to take action.
On the other hand, this path carries a clear risk if it is carried out selectively, so that it is used to strike at opponents and recycle allies, or to impose new political arrangements under the pressure of scandal.
In other words, the slogan “exposing the corrupt” may turn into a new tool in the game of influence, if there is no firm Iraqi will that sets one standard: whoever is proven guilty will be held accountable, regardless of their position or affiliation, and based on evidence presented to an independent judiciary, not to the table of political bargaining.
What is the solution? The battle for religious authority cannot be decided by a tweet.
The explicit message conveyed by Savaya's tweet is that foreign powers possess "documents" on internal corruption and are prepared to use them when necessary. The deeper message, however, is that the state, with its oversight and judicial institutions, has failed to convince its own people or its partners that it alone is capable of opening and closing these cases in accordance with the law.
The solution, as most experts agree, cannot come from a tweet by a foreign envoy, however harsh, but rather from within the Iraqi structure itself, through a long and carefully planned process of steps, including:
-Fortifying the judiciary and granting it effective protection: legally, in terms of security and financially, so that it can open the files of the big bosses without fear or interference.
-Giving free rein to independent oversight bodies: and providing them with political cover that prevents the use of reports as a bargaining chip, and ensures the publication of results to the public.
-Imposing strict transparency in contracts and public funds: through electronic systems, and obligating government agencies to disclose details of major deals, and auditing them internally and internationally when needed.
-Combating conflicts of interest and disclosing financial assets: as a condition for holding any executive or legislative position, with real penalties for those who manipulate or conceal.
-Empowering investigative journalism and civil society: instead of restricting them, because they constitute the first line of defense for public funds when official institutions hesitate.
Without an internal process of this depth, any external threat – including the Savaya threat – will remain merely a passing wave, scaring the corrupt for one day, then being used as part of a broader game, without changing the fact that “the fight against corruption is more intense than the fight against terrorism,” and that whoever truly wants to fight it must start from Baghdad, not Washington.
Kurdistan: Three reasons identified for the rise in the dollar's price
On Wednesday, Jabbar Goran, the spokesperson for the currency market in Sulaimaniyah, revealed the reasons for the rise in the dollar exchange rate in the markets of the Kurdistan Region.
Goran told a Shafaq News Agency correspondent that the price of the dollar yesterday reached more than 157,000 Iraqi dinars for every 100 US dollars, while it declined this afternoon to about 155,000 dinars for 100 dollars.
He explained that there are three main reasons behind this rise, noting that the first reason is due to the lack of complete political agreement on the formation of the new government, and the accompanying state of political instability that is directly reflected in the market, in addition to the lack of dollar injections by the Central Bank of Iraq into the local markets.
He added that the second reason is the positions of US President Donald Trump and his objections to the formation of the government and the selection of some of the proposed figures for it, as well as the issue of the participation of some armed groups in the next government, which raises concerns among investors and market participants.
Goran explained that the third reason is related to the continued tension and indirect conflict between the United States and Iran, and the political and economic effects it has on Iraq and the region, stressing that these factors combined have contributed to the fluctuations and rise in the dollar exchange rate during the recent period.
