An economic expert says: Iraq has entered a phase of financial hardship, and radical reforms have become an urgent necessity.
Economic expert Ziad Al-Hashemi confirmed that Iraq has officially entered a phase of "financial hardship," noting that the government is facing complex financial challenges at a time when citizens and employees are waiting for their financial entitlements to be disbursed.
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Al-Hashemi explained that the essence of the crisis is not related to the size of the available dollar reserves, but rather to the way public revenues and government spending are managed, indicating that a large part of the oil revenues is depleted before reaching the state treasury as a result of corruption and various financial obligations, while the priority of meeting the needs of employees and basic services is declining.
He added that the current crisis is not just a result of the drop in oil prices, but rather the result of accumulated problems that have lasted for years due to uncontrolled spending and mismanagement of financial resources.
He called for the adoption of a comprehensive reform package that includes reducing waste in public spending, controlling the payroll, combating cases of fictitious employment, recovering looted funds, dismantling economic offices, as well as developing non-oil revenues and strengthening alternative state resources.
Al-Hashemi stressed that financial reserves, despite their importance, will not be able to protect the Iraqi economy in the long term unless genuine financial and administrative reforms are implemented that address the structural causes of the crisis and establish the sustainability of public resources.
The Ministry of Planning will soon launch a strategy to address the economy.
Based on the government's efforts to boost non-oil revenues, improve the investment environment, and support sustainable economic development in Iraq, the Ministry of Planning revealed that the first phase of the economic recovery strategy, which it will launch soon, will include a package of field measures and various tax and financing incentives.
The Undersecretary for Administrative Affairs, Dr. Hanaa Al-Asadi, told Al-Sabah newspaper that the first phase of the strategy, which will be launched soon, will include conducting field surveys in Baghdad and the provinces to assess the state of the informal economy. This will be coupled with cooperation with the Private Sector Development Council to implement a private sector development strategy. She added that the measures also include providing investment incentives, facilitating company registration processes, and creating a suitable environment to increase the volume of local and foreign investments. Furthermore, the strategy will address the problems of registered but inactive companies by identifying the reasons for their inactivity, while also developing and implementing tax policies and updating legislation to simplify procedures and reduce bureaucracy.
Al-Asadi added that the first phase of the strategy also includes granting tax exemptions for a suitable period to ease the burden on businesses transitioning from the informal to the formal economy. It also aims to prepare the economy for digital transformation and increase the percentage of government transactions conducted electronically, in addition to developing modern and accurate electronic monitoring systems in accordance with international standards. This will save time, enhance transparency, and reduce administrative and financial irregularities. She further explained that the strategy also includes launching media campaigns, seminars, and workshops targeting citizens, particularly young people, to raise awareness of the dangers of working in the informal economy and the lack of legal protection for those employed within it, as well as encouraging business owners to move into the formal economy.
The Undersecretary confirmed that the expansion of the informal sector leads to the state losing a large part of the tax and fee revenue, as a result of unregistered projects carrying out their activities away from the financial authorities, and their failure to contribute to paying the financial dues owed to them.
She noted that addressing the shadow economy will positively impact the increase of non-oil revenues by expanding the tax and customs base, combating tax evasion and black markets, and promoting financial inclusion and electronic payments, as well as Regarding reducing parallel public expenditures.
US conditions $30B fund release on Iraqi weapon control
Washington has conditioned the release of $30 billion in frozen financial guarantees dating back to Saddam Hussein’s era on Iraq's progress toward bringing all weapons under state control, an informed source told Shafaq News on Sunday.
The issue was discussed during Prime Minister Ali al-Zaidi’s recent visit to Washington. However, the US administration has not yet taken steps to seek the congressional approval required to make the funds available.
Washington has for years urged successive Iraqi governments to place all weapons under state authority and limit the influence of armed groups backed by Iran, warning that a lack of progress on those issues could affect future cooperation between the two countries.
State control over weapons is a central pillar of al-Zaidi’s government program. Since taking office, he has maintained that the authority to carry arms and enforce the law rests solely with the state, calling on armed groups to join official security institutions through legal frameworks.
Earlier this year, an informed source told Shafaq News that the Iraqi government was seeking access to frozen state funds held abroad to help finance the integration of more than 800,000 armed faction members into the Popular Mobilization Forces (PMF) and other security institutions.
Al-Yassiri: The next phase will witness a qualitative shift in the management of the investment portfolio.
The head of the National Investment Commission, Adel Dakhel Mohammed Al-Yassiri, began his duties as head of the commission on Sunday, stressing that the next stage will witness a qualitative shift in the mechanism for managing the investment file in Iraq.
The commission stated in a statement received by Al-Maalomah Agency that “Al-Yasiri held a meeting immediately upon assuming his duties with senior staff and general managers, during which he reviewed the progress of work on existing investment projects and the challenges facing their implementation.”
He added that "investment represents a fundamental pillar in the state's new strategic vision, as it is the main driver of economic development and diversification of income sources, noting that the government is working to create an attractive investment environment based on transparency, the rule of law, simplifying administrative procedures and reducing bureaucracy."
He indicated that "the next phase will focus on launching major strategic and developmental projects that contribute to developing infrastructure and providing thousands of job opportunities for young people in various governorates, thus strengthening the goals of sustainable development and restoring Iraq to its position as a major investment destination in the region."
Iraqi government spokesperson: Iraq is far from the specter of bankruptcy and we are working to find alternatives to the Strait of Hormuz
The official spokesman for the Iraqi government, Haider al-Aboudi, said that Prime Minister Ali Faleh al-Zaidi succeeded in averting a potential attack on Iraq, noting that the government is continuing to address security and economic challenges, and that the country is “far from the specter of bankruptcy.”
He added in statements to local media today (Sunday), which were followed by Iraq Observer, that Iraq had received concerns from neighboring countries about the possibility of attacks being launched from its territory, stressing that the constitution does not allow Iraq to be a launching pad for attacks on neighboring countries, and that the Prime Minister’s position contributed to sparing the country a possible strike.
He added that dialogues are still ongoing with the parties who are hesitant about handing over weapons, while he considered the restructuring of the office of the Commander-in-Chief of the Armed Forces to be a correct decision, noting that what happened with the Minister of Transport in Türkiye was “an organizational flaw on both sides.”
In the security file, Al-Aboudi denied the existence of any government coordination regarding the Saudi attack, stressing that the government had no prior knowledge of the Saudi and American attacks. He also denied the validity of the news that spoke of the Prime Minister informing the leaders of the Popular Mobilization Forces about them before they occurred.
He explained that Jordan had conveyed information to Iraq about preparations to target it from Iraqi territory, while the Ministry of Foreign Affairs received communications from Saudi Arabia following the attacks, noting that the government had affirmed its position through the National Security Council and had gone to the United Nations to document the Saudi attack.
He noted that Saudi Arabia had not provided conclusive evidence regarding the attacks, and that a Gulf delegation had informed Baghdad that it did not possess conclusive evidence on the matter.
On the economic front, Al-Aboudi affirmed that the Ministry of Finance is capable of overcoming the crisis, and that the government is working to find alternatives to oil exports, while continuing the economic reform program, indicating that the cost of the development road project amounts to $18 billion.
He added that Iraqi oil exports were affected by the obstacles in the Strait of Hormuz, and that its closure caused a shock to the economy, noting that Iraq needs 10.8 trillion dinars per month to cover salaries and expenses, while oil revenues remain unstable.
He stressed that the Central Bank is playing an important role in confronting the crisis, and that the country is far from the specter of bankruptcy, explaining that the Iranian side spoke about the possibility of exempting Iraqi oil, but this exemption “does not exist practically on the ground” so far.
Rumors and Security Fears Reverse Iraqi Dinar Gains in Kurdistan Markets
At a Glance
- Rumors and U.S. embassy fears slightly reversed recent dinar gains.
- The dollar climbed back above 151,000 IQD today.
- Officials state the dinar remains fundamentally strong.
Political rumors and fears over a potential U.S. Embassy relocation hit the Kurdistan Region's parallel markets today, pushing the U.S. dollar back up and wiping out recent gains for the Iraqi dinar.
Key Statements and Focus Area
- Jabar Goran emphasized that "If the geopolitical situation stabilizes... and no major war breaks out in the region, and there is political stability, the dollar will undoubtedly drop against the Iraqi dinar."
- Kaifi Khoshnaw stressed that political and security events have an 80% impact on the instability of the dinar's value.
The dollar climbed back above the 151,000 IQD mark. This sharp turnaround erased recent market progress that had briefly pulled the exchange rate below the 150,000 threshold.
Sulaymaniyah Currency Market spokesperson Jabar Goran told Channel8 on Saturday that the dollar rose again today, trading at 151 and higher, adding that the spike "was related to geopolitical news and topics."
Fear spread through the market after the U.S. Embassy in Baghdad and the U.S. The Consulate General in Erbil issued highly publicized nationwide security alerts due to escalating regional tensions.
The spokesperson noted that alongside these official statements, unverified reports began circulating. These rumors claimed the U.S. Embassy might relocate from Baghdad to Erbil due to security risks, triggering widespread anxiety among traders.
He affirmed that the spread of these political and geopolitical rumors directly harmed the value of the Iraqi dinar.
"If the geopolitical situation stabilizes... and no major war breaks out in the region, and there is political stability, the dollar will undoubtedly drop against the Iraqi dinar," he emphasized.
The anxiety extended across the region to Erbil. Speaking to Channel8 earlier today, Kaifi Khoshnaw, the spokesperson for the Erbil Currency Market, said that security concerns and recent attacks on the Popular Mobilization Forces pushed the value of the dollar up by 1,000 dinars.
Khoshnaw stressed that political and security events have an 80% impact on the instability of the dinar's value.
Despite the pressure, he pointed out that the dinar is still considered "strong" against the dollar.
However, the market has seen worse stretches recently. Since the beginning of this month, Khoshnaw added, the dinar had actually managed to regain 4,500 dinars of its value against every 100 dollars.
FYI
The Kurdistan Region’s parallel market operates through local currency trading floors independent of the central bank.
Local merchants fuel this informal market because administrative friction forces them to buy high-rate cash outside official channels.
Meanwhile, the Central Bank of Iraq firmly maintains its official fixed peg at 1,310 IQD per dollar.
Financial experts previously told Channel8 that compliance bottlenecks and regional security shocks cause these wide gaps between the two rates.
economic expert Haider al-Sheikh told Channel8 earlier that Iraq is studying a proposal to change or redenominate its currency to recover hidden cash, increase state liquidity, and strengthen the dinar against the dollar.
The plan emerged after Prime Minister Ali Faleh al-Zaidi's U.S. visit and aligns with his major anti-corruption campaign requiring citizens to exchange old banknotes under scrutiny to uncover illicit funds.
The Iraqi market is attracting the attention of the American private sector.
The visit of Prime Minister Ali Faleh al-Zaidi and his accompanying delegation to Washington confirmed that there is a clear shift in the nature of the relationship between the two countries. After the previous security and military cooperation between Baghdad and Washington, the recent visit led to a shift in that relationship from focusing on security and military files to building a long-term economic and investment partnership based on common interests and promoting sustainable development.
Experts who accompanied the Iraqi delegation during the Washington visit confirm that American companies view the Iraqi market as a promising market and are eager to invest in various productive sectors.
Major American companies
Kamil Abdullah Al-Hamdani, a member of the Iraqi delegation participating in the Washington meetings and representative of the private sector, stated that the official visit to the United States achieved important results in terms of strengthening bilateral economic partnerships and opening direct communication channels with major American and international companies, noting that the delegation held a series of intensive meetings in Boston and other American cities.
Others were included in the visit.
Government will
Al-Hamdani told Al-Sabah newspaper that the meetings were characterized by clarity and transparency, and witnessed intensive dialogues with representatives of companies and economic institutions. This contributed to presenting a realistic picture of the investment environment in Iraq and the economic reforms being implemented by the government. He emphasized that the delegation sensed a genuine desire among many American companies to enter the Iraqi market and invest in various sectors, a desire reinforced by the government's will, led by the Prime Minister, to provide An attractive environment for investment.
He explained that the agreements and memoranda of understanding signed during the visit were not merely protocol-based, but were formulated on practical foundations that make them implementable and establish long-term partnerships, and that the American Chamber of Commerce expressed a clear conviction in the feasibility of working in Iraq in light of the stability and economic reforms it is witnessing.
Transfer of global expertise
Al-Hamdani stated that the delegation did not limit itself to holding economic meetings, but also reviewed the latest experiences in the fields of technology, industry, innovation and business management, with the aim of transferring global expertise to Iraq and benefiting from it in supporting the private sector and enhancing the economic development process, stressing that the next stage requires translating the outcomes of the visit into projects and investments that contribute to diversifying the economy and creating new job opportunities.
Project financing programs
The head of the Iraqi Economic Council, Ibrahim al-Baghdadi, said: On the economic and financial side, the Prime Minister held a meeting with the Executive Director of the US International Development Finance Corporation (DFC), and also met with the President of the World Bank Group, Ajay Banga, and the President of the International Finance Corporation, Mukhtar Diop, in the presence of the Minister of Finance, the Governor of the Central Bank, and a number of senior Iraqi officials, where they discussed project financing programs, financial and banking reform, developing the investment environment, and strengthening cooperation with international financial institutions.
He added that the most important part of the visit was the meeting with the CEOs of major American companies, as part of the work of the American Chamber of Commerce conference in Washington, including GE Vernova, Google, HKN, Vantive and others, where the Iraqi side presented promising investment opportunities in the energy, electricity, industry and technology sectors, stressing the government’s readiness to provide the appropriate environment for investors.
Encouraging joint investments
In support of the private sector, Al-Baghdadi noted that the Iraqi delegation participated in the ceremony announcing the establishment of the American-Iraqi Chamber of Commerce, headed by businessman Ammar Shaker Al-Khafaji, which represents a new platform to enhance relations between businessmen in the two countries and encourage joint investments. He pointed out that the Prime Minister met with a number of Iraqi businessmen and the Iraqi community in the United States and the importance of this meeting, and listened to their opinions and suggestions regarding enhancing the contribution of Iraqi talents to development projects within Iraq.
Providing financial cover
For his part, the head of the Association of Iraqi Private Banks, Wadih Al-Hanzal, explained that the strategic memorandum of understanding signed in the American capital, Washington, with the Association of Energy Engineers (AEE), on the sidelines of the visit of the Prime Minister, Mr. Ali Al-Zaidi, aims primarily to provide the necessary financial and technical cover to solve the electricity crisis in Iraq through the gateway of sustainable development.
He stated that the core objective of this partnership is to provide the necessary funding to support the construction of advanced power plants that rely entirely on solar energy, as well as to provide financial facilities for converting homes to operate on clean energy systems.
He explained that “directing bank financing towards these projects will contribute directly and effectively to finding radical solutions to the problem of electricity shortages, and relieving the great pressure on the national grid, which will positively impact the lives of citizens and sectors.” All economic sectors.
American companies and investors
For his part, Dr. Abdul Aziz Al-Khudairi, Chairman of the Board of Directors of the Al-Khudairi Group and an expatriate economist in the United States, who participated in the Washington meetings, said: The visit achieved positive results in terms of communication with the American business community, and the presence of the Prime Minister and the Iraqi delegation contributed to attracting the attention of American companies and investors, especially with the broad participation of major companies and economic institutions.
Al-Khudairi said that the visit could be described as successful because it presented a different image of Iraq as a promising market for investment, and that the meetings held with representatives of American companies revealed an increasing interest in entering the Iraqi market, especially in the energy, infrastructure and services sectors.
joint projects
He noted that the Houston station, known globally as the “Energy City,” was one of the most prominent stops on the visit, as it witnessed intensive meetings with companies specializing in oil, gas and energy, which sent positive messages about the availability of real job opportunities and great potential for implementing joint projects within Iraq.
Al-Khudairi explained that the Al-Khudairi Group participated in all the meetings held with American companies, during which a number of memoranda of understanding were signed, which he described as good, stressing that these memoranda represent a first step towards turning them into investment and implementation contracts during the next stage, after completing the technical and legal aspects.
American Chamber of Commerce
Al-Khudairi stated that he participated in the expanded business conference organized by the American Chamber of Commerce in Washington, D.C., in the presence of the Prime Minister and a number of Iraqi ministers and officials, including the Ministers of Oil, Electricity, Finance and Foreign Affairs, along with the Chairman of the Iraqi Trade Bank, the Director of Baghdad Bank, the Director General of Basra Oil Company, as well as representatives of major American companies, financial and investment institutions and industrial and technological sectors.
Economic reform programs
The conference witnessed extensive discussions that addressed ways to enhance the economic partnership between Iraq and the United States, reviewing available investment opportunities, supporting economic, financial and banking reform programs, in addition to developing the business environment in line with the requirements of international investors and enhancing Iraq’s ability to attract capital.
Al-Khudairi emphasized that the next phase requires following up on the outcomes of the meetings and translating the understandings into practical agreements. He stressed that the success of any economic visit is measured by the resulting projects, job opportunities, and technology transfer, which is what the Iraqi government, in cooperation with the national private sector and international partners, is striving for. The visit yielded tangible results, including the signing of a large number of agreements and memoranda of understanding. The most prominent of these were agreements in the oil and electricity sectors, with projects exceeding 30,000 megawatts, most notably the agreement with GE Vernova, in addition to strategic projects for developing the energy sector.
The agreements also included the rehabilitation and operation of the Basra-Haditha-Banias pipeline with a capacity of one million barrels per day, and the Basra-Haditha-Ceyhan pipeline with a capacity of 750,000 barrels per day, which contributes to raising Iraq’s export capacity to more than two million additional barrels per day, as well as diversifying oil export outlets and reducing dependence on a single outlet, which enhances Iraq’s economic security in light of the geopolitical challenges facing the region.
Government advisor: Lower oil prices present an opportunity to restructure the economy on a more balanced foundation.
The Prime Minister’s advisor, Mazhar Muhammad Salih, stressed on Sunday the need to adopt a balanced financial reform program to manage the deficit efficiently, while pointing out that the decline in oil prices is an opportunity to restructure the Iraqi economy on more balanced foundations.
Saleh told the Iraqi News Agency (INA): “The decline in oil prices and the drop in oil revenues pose direct challenges to the Iraqi economy, given the general budget’s heavy reliance on oil revenues to finance public spending. This necessitates adopting a balanced financial reform program based on efficient deficit management and avoiding reliance on a single option that could exacerbate the crisis.”
Saleh added, "In the short term, it is necessary to rationalize government spending by postponing or rescheduling non-priority projects and controlling unnecessary operational expenses, while maintaining spending related to salaries, basic services and social safety nets, in order to limit the negative effects of the crisis on citizens."
He added, “At the same time, it is necessary to develop non-oil revenues by improving the collection of taxes and fees, maximizing revenues from border crossings, and expanding the tax base, in addition to developing productive sectors such as agriculture, industry and tourism, which will gradually contribute to reducing dependence on oil as a primary source of public revenues.”
He pointed out that “domestic borrowing can be a legitimate financial tool to cover part of the deficit if it is used within well-considered limits and to finance temporary needs, but it does not represent a permanent solution,” explaining that “expanding it may lead to a crowding- out effect , where public finances take up a large part of the liquidity available in the market, which raises the cost of bank credit and limits the ability of the private sector to obtain financing and investment, as well as increasing the burden of public debt in the future.”
Saleh explained that "domestic borrowing should be viewed as a complementary option within a broader financial and economic reform program, and not as a substitute for structural reforms."
He stressed that “confronting the repercussions of the decline in oil prices is not limited to managing the financial deficit, but represents an opportunity to restructure the Iraqi economy on more balanced and sustainable foundations, through diversifying sources of income and enhancing the contribution of non-oil sectors to the gross domestic product and public revenues, making oil a resource that supports development and not the sole source of budget financing, and giving the Iraqi economy a greater ability to face the fluctuations of global markets.”
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Al-Zaydi chairs a meeting dedicated to approving the final version of the government program.
Prime Minister Ali al-Zubaidi chaired a meeting on Saturday dedicated to reviewing and approving the final draft of the government program.
The Prime Minister's Media Office stated in a press release received by Al-Ghad Press that "the Prime Minister chaired a meeting on Saturday dedicated to reviewing and approving the final draft of the government program, in the presence of the Secretary-General of the Council of Ministers and a number of relevant advisors."
The statement added that "the meeting included a comprehensive review of the program's axes and priorities, and a discussion of final observations to ensure the integration of visions and objectives, in preparation for its final approval and submission to the Council of Representatives, reflecting the government's commitment to implementing its program, achieving reforms, accelerating the pace of development, and improving the level of services provided to citizens."
Al-Fahdawi: All blocs agree on finalizing the cabinet formation.
Member of the United Anbar Alliance, Muhammad al-Fahdawi, confirmed that there is an agreement between the political blocs to expedite the resolution of al-Zidi’s ministerial cabinet during this month, noting that everyone agrees to pass the cabinet and the remaining positions despite the existence of some disagreements between the political blocs.
Al-Fahdawi told Al-Maalouma, “The data on the ground and what resulted from the meeting of the coordination framework have given the green light to hold a parliamentary session at the beginning of August in order to decide on the ministerial cabinet.”
He added that "everyone is still in agreement on what was agreed upon in previous meetings regarding the government cabinet, despite some disagreements, but it is possible to ease the atmosphere and resolve the disagreements to ensure the passage of the remainder of Al-Zaidi's cabinet."
He explained that "Prime Minister Ali al-Zaidi is pressing and emphasizing the importance of finalizing and completing the cabinet in order for his government to succeed by securing votes on the remaining positions so that there can be a fully empowered and legitimate government."
MP: Completing the cabinet is essential to confront current challenges
Member of Parliament, MP Karim Al-Muhammadawi, stressed on Sunday that completing the ministerial formation of the current government has become an urgent necessity imposed by the nature of the current challenges facing the country, noting that delaying this matter negatively impacts the overall performance of the state.
Al-Muhammadawi told Al-Maalouma News Agency that "resolving the issue of the vacant portfolios would enhance the state of political stability in the country, as well as give the government cabinet greater momentum and strength in managing sensitive service and economic files that directly affect the lives of citizens."
He added that "the next complex stage requires a fully empowered and effective government, capable of making sovereign and decisive decisions at all levels."
Al-Muhammadi stressed "the need to expedite the implementation of reform packages and address administrative gaps within ministries, avoiding political stalling and procrastination among blocs."
Trump: I am destroying the Iranian currency and Iran is facing massive inflation.
US President Donald Trump affirmed on Saturday that he is continuing to exert intense economic pressure on Iran, asserting that the Iranian currency is collapsing and the country is facing high inflation rates.
Trump wrote in a post on the Truth Social platform, "I am destroying the Iranian currency, and Iran is experiencing massive inflation," in his latest remarks amidst an unprecedented escalation of tensions between Washington and Tehran.
Trump's statements came hours after the US State Department warned its citizens in the Middle East of the possibility of a sudden escalation, urging Americans in the region to be prepared to leave should the security situation deteriorate. It also warned of the possibility of Iran or its allied groups targeting US interests around the world.
Rafidain Bank issues a warning to citizens
Rafidain Bank issued a warning statement on Sunday regarding fake social media pages and accounts impersonating the bank.
In a statement received by Video News Agency, the bank said, "We would like to alert citizens to the existence of fake social media pages and accounts impersonating the bank and promoting misleading advertisements claiming to offer financial rewards or launch competitions and prizes in exchange for subscribing to the bank's official Telegram channel or performing other actions."
The bank warned citizens against interacting with these pages or responding to their advertisements and links, or providing them with any personal, banking, verification codes, or passwords. These tactics may be used to lure victims and seize their data, accounts, or funds, or to exploit their personal information in fraud, cyber extortion, or other illegal activities.
The bank affirmed its right to take all legal measures against any entities or individuals impersonating it or exploiting its name, logo, or corporate identity to mislead citizens or commit illegal acts, in accordance with applicable legislation.
Lawmaker urges more central bank money creation as Iraq runs without a budget
BAGHDAD — A member of parliament’s Finance Committee has called for the Central Bank to create more money to cover public salaries, months after the foreign minister disclosed that Iraq had already issued 25 trillion dinars to meet its cash needs.
Jamal Kocher told the state newspaper Al-Sabah that the government requires about 7.8 trillion dinars a month to meet its obligations while oil exports remain constrained. “The current financial crisis was expected, and there are limits on oil exports, which are restricted to small quantities through the region,” he said. He called issuing currency “the fastest measure that can provide the liquidity needed to secure salaries and government spending,” and said raising the dollar exchange rate would not work under current conditions.
The constraint he referred to is the Strait of Hormuz. The great majority of Iraq’s crude leaves through southern terminals near Basra and must pass through the strait, and shipping there has been disrupted since the war between Iran and the United States and Israel. Exports averaged about 1.5 million barrels a day in the first half of the year, against roughly 3.3 million before the war, and fell further to about 526,000 a day in May and June. That has left the northern pipeline to Ceyhan, which carries crude from Kirkuk and the Kurdistan Region, as the only route not dependent on the strait.
Kocher rejected proposals attributed to Finance Minister Faleh al-Sari to sell government real estate to repay debts. “The solutions proposed by the finance minister, including selling properties to repay debts, will not provide large amounts, as they do not exceed 7 trillion dinars, which is not enough to address the crisis,” he said, calling asset sales during a crisis “very dangerous” because property could go below its real value. On his own figures, such a sale would cover less than a month of obligations. He said the government should instead pursue corruption cases and recover stolen public funds.
Foreign Minister Fuad Hussein said in June that the state had issued 25 trillion dinars to cover expenditure, taking the money supply to about 125 trillion. Officials have disputed how to describe it. Economist Abdul Rahman al-Mashhadani said no new currency was created and that the Central Bank finances the government’s dinar needs against dollars held in the treasury, while then Central Bank Governor Ali al-Allaq said in May that salaries were secured and the deficit would be covered by internal and external borrowing.
Economists call the practice monetary financing, and it carries risks to the exchange rate. The dinar is pegged and the peg is underwritten by incoming oil dollars, so when the supply of dinars and the supply of dollars move apart, the street rate pulls away from the official one. That gap has brought people onto the streets before. In January 2023, after U.S. restrictions on dollar transfers cut the flow of hard currency into Iraq, the street rate reached about 1,610 against an official 1,470 and hundreds protested outside the Central Bank. The governor resigned and the cabinet revalued the official rate. Protesters returned that July when the street rate jumped again after Washington blacklisted 14 Iraqi banks. The official rate now stands at about 1,320 and the street rate near 1,500.
Iraq has no 2026 budget. Parliament is skipping it to concentrate on 2027, leaving spending governed by the one-twelfth rule, under which the government may spend a twelfth of the previous budget each month. The Finance Ministry recorded a deficit of about $5 billion in the first four months of the year, with spending of $28.2 billion against revenue of $23.2 billion. Civil servant wages accounted for $15.3 billion of that spending, or roughly 5 trillion dinars a month.
The government confirmed Thursday that Iraq is in a financial crisis and that public salary payments will be delayed. Spokesperson Haider al-Aboudi said payments would no longer follow their previous schedule. Health Minister Abdul Hussein al-Mousawi put the monthly salary bill at 10.8 trillion dinars and said the state drug importer Kimadia received barely 15% of its allocated funding last month, prompting suppliers to halt deliveries.
Iraq earned about $2.34 billion from 32.1 million barrels of crude and condensates exported in May and June, roughly $1.17 billion a month, according to Oil Ministry figures. Oil typically provides more than 90% of federal revenue. Iraq and Turkey signed a one-year agreement Saturday setting a minimum of 750,000 barrels a day through the pipeline to Ceyhan, above Iraq’s entire average export rate over those two months.
US forces begin withdrawal from military compound in Erbil
The Monitor website revealed that the US military has begun withdrawing its remaining forces from the military complex near Erbil International Airport in the Kurdistan Region of Iraq.
Al-Monitor, citing informed sources, reported that "the US military has begun withdrawing its remaining forces from the military complex near Erbil International Airport in the Kurdistan Region, after dismantling and redeploying Patriot air defense systems."
According to the sources, "the troop reduction process began last week, and the process is continuing in line with the United States' commitment to complete its withdrawal from Iraq by the agreed deadline with Baghdad on September 30."
Agreement to open a NATO mission office in Baghdad
National Security Advisor Qasim al-Aboudi and the commander of the NATO mission in Iraq, Lieutenant General Ramon Armada, agreed on Sunday to open a NATO mission office in Baghdad.
The media office of the National Security Advisor said in a statement received by Al-Mirbad that “National Security Advisor, Qasim Al-Aboudi, received today, Sunday, a call via closed-circuit television from the commander of the NATO mission in Iraq, Lieutenant General Ramon Armada.”
He added that "during the call, ways to reduce escalation were discussed, and the need to reach solutions to the recurring crises in the region was emphasized through dialogue and diplomatic channels. Ways to continue NATO's support for the Iraqi armed forces in the areas of consultation, training, and exchange of information and expertise were also discussed."
He noted that "during the call, an agreement was also reached to open a NATO mission office in Baghdad."
Al-Aboudi stressed, according to the statement, that “the role of the NATO mission in Iraq lies in consultation, training, building military capabilities and security advice, as well as providing support in the fields of cybersecurity and artificial intelligence, in addition to building strategic partnerships with NATO countries,” indicating that “the policy of the Prime Minister, Ali Faleh Al-Zaidi, is to be open to all friendly and brotherly countries with regard to development and investment and to support paths that strengthen relations with everyone, in accordance with mutual interests.”
For his part, General Armada affirmed that "the goal of the non-combat advisory and training mission of (NATO) is to develop the capabilities of the Iraqi armed forces to meet potential challenges," noting that "NATO is committed to supporting Iraq according to the priorities set by the Iraqi government."
Washington begins withdrawing its last troops from Iraq and Kurdistan, ending its military presence.
A report published by Al-Monitor on Saturday (August 1, 2026) revealed that the US military has begun implementing the final phase of its military withdrawal from Iraq by withdrawing its last remaining forces in the Kurdistan Region, along with air defense systems and related military equipment, in a move that represents the conclusion of the plan to end the US military presence in the country.
The report, which was followed up by "Baghdad Today", stated that the withdrawal includes forces stationed in bases within the Kurdistan Region, which represented the last American military presence after the completion of the evacuation of bases located within the areas under the control of the Iraqi federal government at the beginning of this year.
He noted that the withdrawal process also includes the transfer of air defense systems, radars and military equipment, as part of arrangements to end the American military mission and move to a new framework of security cooperation between Baghdad and Washington.
In September 2024, Baghdad and Washington announced an understanding to end the mission of the international coalition in Iraq and move to a bilateral security relationship, with Iraqi forces taking full control of the Ain al-Asad base in Anbar after the withdrawal of US forces from it. The Iraqi Ministry of Defense also announced the completion of the evacuation of bases located within federal areas.
