Trading fuels Iraq’s parallel Dollar market
Iraq’s dollar market has seen a recent surge, driven largely by cross-border speculative trading, a senior official reported to Shafaq News on Tuesday.
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Mudhhir Mohammed Saleh, financial adviser to Prime Minister Mohammed Shia al-Sudani, noted that when the dollar weakens, some traders prefer parallel markets for their speed and lower bureaucratic hurdles.
“Small commercial activity accounts for more than half of Iraq’s foreign trade,” he added.
Despite the surge, Saleh stressed there was no fundamental reason behind the dollar’s movement, pointing out that foreign currency remains available through Iraq’s official banking system, and in line with international standards on trade finance and import monitoring.
He also underscored the importance of advanced regulatory tools, including customs tracking and digital inspection systems for imported goods, describing them as essential to strengthening oversight and transparency.
Al-Sudani's advisor lists the reasons for the dollar's rise in the Iraqi market.
On Tuesday, the Prime Minister's financial advisor, Mazhar Mohammed Salih, attributed the rise in the dollar in Iraqi markets to cross-border speculative trading.
Saleh told Shafaq News Agency (according to his personal assessment), "The speculative and cross-border trade environment balances its risks between the decline of the dollar, the ease of parallel financing for fast trade, and its low administrative and regulatory costs, especially compliance and anti-money laundering procedures through official institutions, and the comparison between violating the law and the risks and the quick illusion of achieving profit, especially in small border trades."
He continued: "Small commercial activity, as is well known, dominates more than half of the country's foreign trade. The lower the dollar exchange rate compared to audit costs and the cost of banking and customs compliance, the more favorable the parallel market financing equation becomes, unless deterrent legal enforcement is tightened."
He added, "Therefore, there is no reason for this renewed surge in dollars, despite their regular availability through the official banking system," noting that this is consistent with international standards and requirements for monitoring the financing and flow of foreign trade, particularly import trade.
He pointed out that "the comparison between the cost of introducing advanced regulatory procedures and global applications, such as the clean regulation of foreign trade on goods entering from abroad, such as customs tracking and digital inspection control systems for imported goods, are steps that represent an advanced level of regulatory sophistication and customs inspection."
Saleh concluded his remarks by saying, "This means that high-level enforcement of standardized controls on informal imports subject to anti-money laundering laws, broad and effective customs controls, and border crossing governance, which largely excludes informal trade, must increase as the parallel exchange rate improves with the decline of the dollar."
Two conditions for disbursing June salaries to Kurdistan employees
The federal government has agreed to pay salaries to employees in the Kurdistan Region of Iraq, subject to two conditions being met, according to Kurdish media reports.
Media outlets reported that “the federal government has decided to pay the salaries of Kurdistan Region employees for last June, subject to the following conditions:
First: The Kurdistan Regional Government delegation in Baghdad must complete its work on non-oil revenues with a delegation from a ministerial committee affiliated with the federal government within two days and prepare a draft agreement.
Second: Oil production companies must expedite the export of oil and deliver it to the State Oil Marketing Organization (SOMO).
The Council of Ministers approved, on Tuesday, funding the salaries of Kurdistan Region employees for the month of June, and establishing mechanisms for relevant committees to calculate the federal treasury's share of non-oil revenues. The agreement stipulates that the regional government commits to paying the amounts in accordance with the law and a mechanism approved by the Ministry of Finance and the Board of Supreme Audit. It also requires oil companies to deliver oil produced in accordance with the general budget.
The Council considered the topics included on the agenda and took the necessary decisions regarding them. Based on what was presented by the Ministerial Committee formed pursuant to the directive of the Prime Minister, the Council decided to initially approve the renewal of its Resolution No. (550) of 2025 to finance the salaries of employees of the Kurdistan Region of Iraq for the month of June, after taking into account the following:
1. Completing the committees stipulated in paragraphs (Third and Fourth) of the aforementioned decision.
Its work shall be submitted by each of them with a signed report to the Federal Cabinet within.
A week after this decision.
2. The team formed in paragraph two shall complete its work within a week, calculating a share.
The federal public treasury from the region’s non-oil revenues in accordance with the law and the establishment of a government.
The region shall pay it instead of the amount mentioned in paragraph two/1 of the decision, provided that the calculation mechanism is approved by the Federal Ministry of Finance and the Financial Supervision Bureau.
Federal.
3. The regional government shall oblige oil companies operating in the Kurdistan Region of Iraq to deliver the produced oil, in accordance with the provisions of the Federal General Budget Law and Cabinet Resolution (550) of 2025.
Washington grants banks a "rescue period." Gradual reforms through 2028 will help them break free from the dollar's constraints.
The Iraqi banking sector was on the verge of entering the US red zone, with the deadline for private banks to submit a pledge to implement the Oliver Wyman plan approaching at the end of this month. However, it appears that the Central Bank’s efforts to “mediate” between the American consulting company and Iraqi banks have yielded a number of facilitations in implementing Washington’s requirements. Financial and banking expert Mahmoud Dagher revealed that the deadline for submitting pledges has been extended to September 30, taking into account “flexibility” in implementing the banking reform plan, with the possibility of expanding the time limits for gradually increasing capital in four stages, by 50 billion dinars annually until 2028. Dagher added that the conditions for the percentage of family ownership may increase from 10% to 40% of the bank’s portfolio, which gives private banks greater opportunities to engage in the reform plan and escape the restrictions on dealing in dollars imposed by the US Federal Reserve and the Treasury Department, at the beginning of 2029. He pointed out that banks that will not be able to join Under the reform process, they will be allowed to operate exclusively in Iraqi dinars, without their licenses being revoked.
Mahmoud Dagher, in an interview:
The deadline, which ends on August 31, is the final deadline for banks to submit their pledge to pursue the banking reform process. This includes three tracks: the first is the individual track, whereby the bank continues to operate under its current license while complying with the conditions; the second track is merging with another bank; and the third is liquidation.
The comprehensive banking reform plan includes three milestones: the first in mid-2025, the second in mid-2026, and the third in 2027. Banks that successfully implement the reform measures will be able to exit US restrictions next year. This reform program includes both deprived and non-deprived banks, and the deadline for submitting a pledge to commit to the reform process has been extended to September 30.
We met with 30 banks the first time, and with 40 banks the second time, in Erbil. We held extensive discussions with Oliver Wyman employees. The majority of the banks expressed a desire to pursue reform and implement international standards, but there are some difficulties in implementing them. The Central Bank, for its part, expressed its flexibility in this regard.
Some banks are accustomed to a certain way of working and are finding it difficult to implement reform standards. Failure to participate in the banking reform plan will not result in the revocation of their licenses, but their operations will not improve and they will continue to operate in local currency.
The Central Bank may propose a gradual capital increase, adding 50 billion dinars each year until the reform plan's final cap of 2027. As for the requirement to limit family ownership to just 10% of the bank's capital, it may allow families and relatives to own 40%. Even a letter from the Prime Minister's Office a while ago emphasized that the plan aims for empowerment, not exclusion, and must take into account the unique circumstances of the Iraqi environment.
The reform plan includes a requirement that board members be banking professionals, with retraining for heads of administrative units in categories A and B. Even banks that pledge to implement the conditions will remain under scrutiny, and warnings may be issued to them if they fail to implement the required standards. If the warnings are repeated, they may be advised to pursue the merger option. However, if they fail to pursue the merger option, they will be removed from the reform plan.
The value of Iraq's gold reserves has increased.
An economic observatory announced, on Tuesday, an increase in the value of the reserve.IraqGold prices rose by 4.76% during the first half of this year, as a result of...Gold prices riseGlobally.
He added, "This increase in the price of gold has directly contributed to raising the value of Iraq's gold reserves," stressing that "gold remains one of the most important strategic assets that enhances the country's financial strength.
" The observatory noted that,Gold prices riseGlobally, over the past months, it reflects the volatility of global markets and directly impacts the value of national reserves in many countries, including Iraq.
He explained, "Monitoring gold prices on a regular basis enables Iraq to accurately assess the value of its reserves and make appropriate economic decisions to maintain the stability of the country's purchasing power."
Positive indicators for the second quarter of 2025
1. Growth in the Central Bank’s gold reserves:
Gold reserves constitute an important part of the country's foreign reserves, as the gold reserves of the Central Bank of Iraq recorded a significant growth rate of (55%) in the second quarter of 2025, as their value reached (22.8) trillion dinars in the same period, compared to their value of (14.7) trillion dinars in the second quarter of 2024.
2. Depreciation of the issued currency:
The decline in the issued currency contributes to a decrease in the inflation rate, which maintains the stability of the general price level. The currency issued by the Central Bank recorded a decline in the rate by (3.8%) in the second quarter of 2025, as it reached (98.4) trillion dinarsin the same period, compared to its value of (102.3) trillion dinars in the second quarter of 2024.
3. Low inflation rate:
The decline in the inflation rate indicates a decline in the general level of prices and leads to an improvement in the purchasing power of individuals and institutions. Inflation recorded a low rate of (76%) in the second quarter of 2025, reaching (0.8%) during the same period, compared to the second quarter of 2024, which reached (3.3%).
4. Increase in the ratio of total cash credit to total deposits:
The ratio of total cash credit to total deposits increased by (11%) to reach (61%) in the second quarter of 2025, compared to (55%) in the second quarter of 2024, which contributes to economic growth.
The Prime Minister sponsors the signing of an agreement between the Ministry of Oil and the American company Chevron to develop exploration blocks.
Al-Sudani sponsors the signing of a memorandum of understanding between the Ministry of Oil and the American company Chevron.
Prime Minister Mohammed Shia al-Sudani sponsored, on Tuesday (August 19, 2025), the signing ceremony of a preliminary agreement between the Ministry of Oil and the American company Chevron to develop a number of exploration blocks within the Nasiriyah project, which consists of four blocks, in addition to the Balad oil field and any other producing fields or exploration blocks.
According to a statement received by Baghdad Today from the Prime Minister's media office, Al-Sudani stressed that "the government has adopted a different approach in dealing with major oil companies, particularly American ones," praising the company's role in "transferring modern technology to Iraq, community contributions, and sound environmental policies." He added that "relations with the United States are strategic in nature, and the government is working to attract investments, develop production, refinery, and invest in associated gas and natural gas using the latest technologies."
For his part, the company's Vice President, Frank Mount, expressed Chevron's "look forward to working again in Iraq, a country rich in opportunities and potential," emphasizing the company's "commitment to a long-term partnership and the introduction of advanced technology and global expertise to support the energy sector amid Iraq's increasingly stable security."
It's worth noting that Iraq is currently seeking to attract extensive foreign investment in the oil and gas sector, with a focus on associated gas investment and the development of exploratory fields.
Another headline for this same article is
Prime Minister: Our relationship with the United States is a strategic one.
The Parliamentary Oil Committee reveals details of the agreement to resume the region's exports.
Al-Gharibawi explained in a press statement that "the final agreement included a memorandum of understanding that defines a clear mechanism for delivering the oil produced in the region to the federal Ministry of Oil, with the North Oil Company in Kirkuk responsible for receiving and storing it centrally before pumping it through the export pipeline to the Turkish port of Ceyhan after completing the final agreement with the Turkish side."
He explained that "this mechanism allows for the gradual resumption of exports over the next few days, after making the necessary technical and logistical preparations, which will positively reflect on public revenues and enhance the resources of the federal treasury."
Al-Gharibawi indicated that restarting the export pipeline through the port of Ceyhan will contribute to stabilizing Iraqi oil supplies in global markets, in addition to being a practical step towards resolving other outstanding issues between the two parties, most notably the issue of salaries for the region's employees and guaranteeing their financial rights.
After lengthy negotiations and a halt of more than two years in exporting oil from the Kurdistan Region's fields, the regional government announced a few days ago that it had reached an agreement with Baghdad regarding the mechanism for exporting oil through the Kirkuk pipeline extending to the Turkish port of Ceyhan, which was one of the largest crude oil export routes in Iraq.
In almost every Iraqi home, there's a corner dedicated to financial security: a metal box, a secret drawer, or even a plastic bag hidden in a wardrobe. Millions of dinars are kept at home instead of being circulated through the economy via banks or investments, with all the obvious risks this entails, such as theft, fire, or even loss of money due to any emergency.
This phenomenon, which has become a common behavior, is not merely an old habit or an individual choice. Rather, it reflects a complex economic and social reality with profound repercussions for the financial system and the national economy. The primary reason driving Iraqi families to keep their money at home is the lack of trust in banks. Previous experiences with delayed salary payments or disruptions to electronic systems, in addition to the complex procedures for withdrawals and deposits, have created a state of chronic anxiety among depositors.
In the mind of the citizen, keeping cash at home ensures immediate access to their funds when needed, without falling into a cycle of red tape or facing the possibility of accounts being frozen in times of crisis. However, there is also a near-total absence of safe and transparent investment channels. The average citizen, especially those with medium or limited incomes, has only two options: deposit their money in a bank with a weak return that doesn't keep pace with inflation, or take the risk of investing in unsecured projects that lack proper research and oversight.
Under this equation, the home becomes more attractive than any financial institution. When the government announced the salary localization policy, the stated goal was to integrate a broad segment of employees into the banking system and facilitate financial transactions through electronic payments and purchases, while keeping surplus funds in bank accounts rather than withdrawing them in cash. However, reality has proven that the lack of trust in banks has rendered this policy ineffective. As soon as salaries are deposited into accounts, the majority of employees rush to withdraw them in full on the same day, as if the bank account were merely a temporary stopover. Money continues to leak out of the banking system as soon as it enters, re-entering the same household savings cycle. Thus, the idea of localization has transformed from a tool for promoting financial inclusion into a formality that fails to achieve its economic objectives.
The continued withdrawal of funds from the Iraqi banking system and their continued holding at home weakens banks' ability to lend and puts pressure on the government to meet its obligations. This could lead to delayed salaries and force the Central Bank to print more currency, causing inflation and weakening purchasing power.
Successful international experiences (such as those in Turkey and Malaysia) have proven that the solution begins with rebuilding trust between citizens and banks by improving services, providing incentives to savers, and expanding electronic payments. To achieve similar results, Iraq needs to: digitize government salaries and payments; launch savings and investment instruments with attractive and secure returns; and ensure deposit protection. In addition, it needs to improve the banking infrastructure and reduce electronic transaction fees.
Economist: Iraqi banks continue to gradually emerge from the impact of US sanctions.
Economic expert Mustafa Akram Hantoush confirmed that the Iraqi banking system has been experiencing a state of “restriction” for a long time.
In a televised interview followed by Al-Maalouma Agency, Hantoush said, “Iraqi banks are going through a transitional phase from the effects of sanctions towards openness, which requires serious and continuous reforms.”
He pointed out that "Rafidain Bank's partnership with American companies represents a correct step towards strengthening confidence in the Iraqi financial sector." End
Rafidain: Political agendas targeting the Iraqi banking system
Rafidain Bank's General Manager, Ali Karim Al-Fatlawi, confirmed that there is a systematic targeting of the Iraqi banking system by parties with political agendas.
Al-Fatlawi said in a statement, "It is clear that there is a systematic targeting of the Iraqi banking system by parties with political agendas or opportunistic personal interests, seeking to present a distorted image of our national institutions by spreading rumors and providing international bodies with false and misleading information."
He added, "The partnership contract signed by Rafidain Bank with K2 Integrity represents a professional and legal bulwark that will close the way to all those lurking, and establish clear and transparent rules for compliance and governance, ensuring that the voice of reform reaches the world, not the voices of misinformation or politicization."
He continued, "We are moving forward with confident steps to build a modern Iraqi banking system characterized by transparency and credibility, and we will not allow any foreign agendas or narrow interests to hinder the reform process." He explained that "this international partnership is a testament to integrity and trust, and a clear message that Rafidain Bank is leading a new path that will place the Iraqi banking sector in its rightful place."
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Foreign partners are not a requirement. The Central Bank Governor explains the importance of the banking reform plan.
Central Bank Governor Ali Al-Alaq clarified the details of the banking reform plan on Monday, particularly regarding the foreign partner and the plan's objectives. He emphasized that the foreign partner is not a condition of the reform plan, while noting that the banking reform is based on international laws and standards.
Al-Alaq told the Iraqi News Agency (INA): "The banking reform plan is not a surprise, but rather a well-thought-out plan, and it took more than a year to work on it, in coordination with banks and international bodies. It was agreed upon the need to review the Iraqi banking sector after years of practical experience."
He pointed out that, "After the emergence of many problems, an agreement was reached between all parties to adopt a plan that places our banks within international standards and practices, and within the framework of the Central Bank Law and the Iraqi Banking Law. Therefore, the standards are not innovative, but rather stem from the Central Bank Law and international practices and standards." He explained that, "The goal of these standards is to ensure that the status of banks is stable and secure, that they have the ability to deal externally, and that they are accepted internally and externally."
Regarding enhancing confidence in banks, Al-Alaq explained: "It is often mentioned that the plan included the inclusion of a foreign partner, while the plan, in all its details, did not include this. We are talking about diversified ownership by financial institutions and individuals, and these Iraqi institutions are more deserving of participation."
He continued, "The plan also included the establishment of a fund for Iraqis that would allow a number of local shareholders, and even citizens, to enter into partnerships with banks." He emphasized that "bringing in a foreign partner is not prohibited, but it is not a requirement, as rumored. We publish all the criteria in detail, and this is not mentioned in them."
The Central Bank Governor added, "After a thorough study of the plan and in agreement with international bodies and correspondent banks, we believe that banks that can adhere to these standards will have their dollar transactions lifted and will establish normal relationships with foreign correspondent banks. Therefore, the matter is optional, and banks that do not wish to participate in this plan have another option, but they must present alternatives that enable them to be accepted locally and internationally."
He pointed out that "one of the outcomes of the plan we are working on is to address the situation of deprived banks. If banks are able to adhere to the agreed-upon local and international standards, restrictions related to dealing in dollars will be lifted from them." He emphasized that "the plan is designed to benefit banks, and those who believe they are unable to implement it should offer themselves other solutions to address the problem."
Central Bank Governor on Reform Plan: Introducing a Foreign Partner in Iraqi Banks Is Not a Condition
The Governor of the Central Bank of Iraq, Ali Al-Alaq, confirmed on Monday that the banking reform plan, which was prepared in coordination with banks and international bodies over more than a year, aims to bring the Iraqi banking sector into line with international standards and practices, ensuring its internal stability and external acceptance. While he indicated that the inclusion of a foreign partner in Iraqi banks is not a condition within the plan, as rumored, and that priority will be given to Iraqi financial institutions and individuals, with the possibility of local shareholders participating through a special fund, he explained that the plan gives Iraqi banks sufficient flexibility to choose between adhering to international standards and lifting restrictions on their dollar transactions, or seeking other alternatives to ensure the continuity of their operations, both domestically and internationally.
The banking reform plan is not a surprise, but rather a well-thought-out plan, which took more than a year to develop in coordination with banks and international bodies. It was agreed upon the need to review the Iraqi banking sector after years of practical experience.
After numerous challenges emerged, all parties agreed to adopt a plan that would place our banks within the framework of international standards and practices, and within the framework of the Central Bank Law and the Iraqi Banking Law. Therefore, the standards are not innovative, but rather stem from the Central Bank Law and international practices and standards.
The goal of these standards is to ensure that banks are stable and secure, able to operate internationally, and accepted internally and externally.
Regarding enhancing confidence in banks, it is often mentioned that the plan included the inclusion of a foreign partner, while the plan, in all its details, did not include this. We are talking about diversified ownership by financial institutions and individuals, and these Iraqi institutions are more deserving of participation.
The plan also included the creation of a fund for Iraqis, allowing local shareholders and even citizens to enter into partnerships with banks. We emphasize that bringing in a foreign partner is not prohibited, but it is not a requirement, as rumored. We publish all the criteria in detail, and this is not mentioned in the plan.
We believe that banks that can adhere to these standards will have their dollar transactions lifted and will establish normal relationships with foreign correspondent banks. Therefore, this is a voluntary matter, and banks that do not wish to participate in this plan have another option, but they must offer alternatives that will enable them to be accepted locally and internationally.
One of the outcomes of the plan we are working on is to address the situation of deprived banks. Banks that are able to adhere to the agreed-upon local and international standards will have their restrictions on dealing in dollars lifted if they do. The plan is designed to benefit banks, and those that believe they are unable to implement it should offer themselves other solutions to address the problem.
The Coordination Framework speaks with confidence: US forces are leaving... and Iraqi sovereignty is facing a real test of strength.
Coordination Framework member Issam Shaker confirmed on Monday (August 18, 2025) that talk of the withdrawal of US units deployed at the Ain al-Assad and Harir bases in Iraq is "not surprising," noting that the matter came within the framework of dialogues that have continued for more than 24 months.
Shaker told Baghdad Today, "The security situation in Iraq no longer requires the presence of any combat force, as there are forces capable of confronting internal and external challenges." He added, "The withdrawal of US forces does not mean the cancellation of the strategic agreement between Baghdad and Washington, as it is in effect and will remain within its defined path."
He pointed out that "talk about the possibility of Iraq being subjected to any aggression after the withdrawal is a hypothesis put forward by some with a well-known agenda," stressing that "Iraq is a sovereign country capable of defending itself."
Shaker added that "the Alaska summit meeting between Trump and Putin outlined a new agenda for the region, which means tensions will continue for a long time, especially in light of the presence of an occupying entity seeking to expand and threaten the security of Arab capitals." He emphasized that "Iraq will not turn a blind eye to any violation of its sovereignty by any country, including the entity."
The crossroads of testing sovereignty and fears of a security vacuum
However, strategic affairs expert Abbas al-Jubouri warns of the repercussions of the expected withdrawal of international coalition forces from Iraq, scheduled for next September, stressing that the move represents a "sensitive milestone" amid accelerating regional developments.
Al-Jubouri told Baghdad Today that "the withdrawal does not mean a complete vacuum, but it could lead to a weakening of the intelligence capabilities and air support that the coalition had been providing to Iraqi forces." He stressed the need to "strengthen national capabilities and rely on well-considered bilateral agreements with friendly countries."
He explained that "Iraq today stands at a crossroads: either capitalize on the withdrawal to strengthen sovereignty and demonstrate the readiness of its security forces, or face the risk of the vacuum being exploited by remnants of terrorism or undisciplined parties, especially with the escalation of Iranian-Israeli tensions and their repercussions for the region."
Al-Jubouri added, "Maintaining internal stability requires controlling weapons outside the state's framework, unifying security decisions, and securing vital facilities and borders, especially in areas that still constitute potential corridors for ISIS remnants."
He concluded by saying, "The withdrawal of the international coalition may represent a historic opportunity to strengthen Iraqi sovereignty, but at the same time, it poses serious risks if the transition is not carried out in an orderly and precise manner that prevents Iraq from slipping into conflicts on the front lines." He noted that, "This is what raises concerns and fears at both the political and popular levels."
Discussions of the international coalition's withdrawal from Iraq come amid an agreement between Baghdad and Washington to end the coalition's combat mission and convert it to an advisory and training role, in preparation for a full withdrawal.
The coalition, which includes forces from more than 80 countries, was formed in 2014 to support Iraq in its war against ISIS after it seized control of large swaths of the country.
Although Iraq declared military victory over ISIS in 2017, remnants of the group remain active in some desert and mountainous areas, making the coalition's continued presence a key factor in intelligence and logistical support.
Meanwhile, the government faces political pressure from local parties demanding the complete withdrawal of foreign forces as a "sovereign right," while others warn that a rapid withdrawal could create a security vacuum that extremist groups could
exploit.
Does the "hasty" withdrawal of US forces remove protection from Iraq?
The withdrawal of international coalition forces from Ain al-Asad base in Anbar towards the Kurdistan Region, in preparation for a complete evacuation from Iraq , has raised a key question: is this part of the previous agreement between the two countries, or is it a cessation of American protection for the country from any external attacks?
Iraqi media revealed on Monday that the first phase of the withdrawal of US forces—part of the international coalition—from the country towards the Kurdistan Region of Iraq has begun, ahead of the scheduled date of September 25.
In early September, Washington and Baghdad reached an understanding on a plan for the withdrawal of US-led international coalition forces from Iraq. The agreement stipulates the departure of hundreds of coalition forces by September 25, 2025, and the remainder by the end of the following year.
Government confusion
While Iraqi Deputy Prime Minister and Foreign Minister Fuad Hussein affirmed his country's desire for US forces to remain to protect the country from the flames of regional wars, the spokesman for the Commander-in-Chief of the Iraqi Armed Forces considered the withdrawal an achievement for the government.
"Iraq is now in a regional and international battlefield, so who will protect the country from it?" Hussein said during a television interview on Saturday. "Therefore, there is a serious need for strong friends to support and protect us as they did before, and to keep the flames of this war away from us."
The Iraqi minister confirmed that the Americans are present in Iraq based on understandings with the Iraqi government, and there were talks about the departure of these forces, but this happened before the recent dangerous events, referring to October 7, 2023, and its repercussions on many countries in the region.
For his part, Sabah al-Numan, spokesman for the commander-in-chief of the armed forces, said that "the withdrawal of the international coalition forces from Iraq is one of the government's achievements and an indicator of Iraq's ability to confront terrorism and maintain security and stability without needing the help of others."
Al-Numan added in an official statement that "this would not have happened without the political efforts and insistence of Prime Minister Mohammed Shia al-Sudani to close this file, just as he closed the UNAMI file."
Meanwhile, a US embassy spokesperson in Baghdad revealed on Monday that a "civilian" partnership between the international coalition and Iraq is close to being signed, coinciding with the planned "military" withdrawal by next September.
Shafaq News Agency quoted the spokesperson (whose identity was not revealed) as saying that the international coalition to defeat ISIS (Operation Inherent Resolve) will transition from its military missions in Iraq to a more traditional bilateral security partnership, stressing the continuation of the coalition's civilian efforts under civilian leadership at the global level.
The spokesperson emphasized that this shift does not mean the end of the international coalition's work to defeat ISIS, but rather comes as part of a plan to transform Iraq into a more stable country through security partnerships and ongoing civilian cooperation.
The United States has deployed 2,000 troops in Iraq to advise and assist Iraqi forces since ISIS invaded Iraq in 2014, in addition to the presence of military personnel from other countries, mostly European, in the country as part of the international coalition.
Lift protection
Regarding the timing and objectives of the US withdrawal, Iraqi political analyst Ghaleb Al-Dami told Arabi21, "The withdrawal of forces now, in a manner that appears hasty, may help alleviate their embarrassment in the event that Iraq is subjected to Israeli aggression in the future.
He added, "Therefore, the US withdrawal from Iraq now without a clear vision that comes within an agreement and a timetable does not even serve the interests of those who claim to want this withdrawal, even though their voices have diminished after the war between Israel and Iran."
He pointed out that "some Iraqi groups that oppose the US military presence in Iraq have said that they should not withdraw, which means that they sense that the presence of US forces in Iraq is protection for them from Israeli strikes."
Al-Dami believes that "this withdrawal may lead to undesirable consequences for Iraq in general, and especially for the armed factions."
He pointed out that previous dialogues between Baghdad and Washington indicated that US combat forces would withdraw on September 25, 2025, but they withdrew a month before that.
Al-Dami explained that "the Iraqi Foreign Minister says that US forces withdrew in accordance with the previous agreement between Washington and Baghdad, but he believes that it is not appropriate at the present time because Iraq still needs them."
For his part, Moataz Al-Najm, a professor of political science in Iraq, believed that "the current withdrawal is scheduled within an agreement between Iraq and the United States, and that this withdrawal from important military bases in the country's west, center, and even the Kurdistan Region, will leave a strategic vacuum.
" Al-Najm confirmed to "Arabi21" that "the Iraqi forces are capable of confronting attacks, but Iraq still lacks high-level intelligence, radars, and air defenses to counter any air violations, so these will be affected overall by the US withdrawal."
According to the spokesman, "Iraq today is caught between two hammers: either it deals as a state and uses this withdrawal positively to transform the relationship with the United States into a strategic relationship with a true partnership, given that there are efforts to transform the Middle East into an economic arena that can be exploited."
He continued: "The mission of the Ministry of Foreign Affairs and the Iraqi government is to utilize this US withdrawal to Iraq's advantage by transforming the relationship from a military one to a strategic relationship and partnership similar to the Gulf states."
Al-Najm described the foreign minister's remarks as "realistic," as he warned of "another military strike on Iran," noting that "the visit of the Secretary of the Iranian Supreme National Security Council, Ali Larijani, to Iraq last week was perhaps to reactivate factions in the region, so the US withdrawal is inappropriate."
The withdrawal also comes after a report published by the Washington Institute calling for the Iraqi government to be punished if it does not dissolve the Popular Mobilization Forces, including accelerating the withdrawal of US forces from the country.
The institute explained in its report, published on August 5, that "given the explicit political and financial support provided by the Sudanese government to groups with a track record of attacking Americans, it may be time to let Iraq fend for itself."
The last US soldier will leave Ain al-Asad base in mid-September.
An Iraqi security source revealed on Tuesday that the last US soldier will leave Ain al-Asad base in Anbar province, western Iraq, in mid-September, after which the international coalition headquarters at the base will be permanently closed.
The source told Shafaq News Agency that the Ain al-Assad base is scheduled to be permanently closed on September 15, explaining that US forces stationed in western Iraq will move to bases inside Syrian territory, while those in the capital, Baghdad, will move to alternative bases in Erbil in the Kurdistan Region.
The source added that a limited number of American personnel and leaders will remain within the joint forces in Baghdad as needed.
On Monday, the first phase of the withdrawal of US forces from the country to Syrian territory began.
An Iraqi security source told Shafaq News Agency that a US convoy, including trucks carrying military vehicles, had begun moving out of Ain al-Assad base.
Ain al-Asad Air Base is the second largest air base in Iraq after Balad Air Base. It is the headquarters of the US Army's 7th Division and is located 10 kilometers from the Baghdadiyah district in Anbar Governorate.
Earlier, a spokesperson for the US Embassy in Baghdad revealed that a "civilian" partnership between the international coalition and Iraq was close to being signed, coinciding with the planned "military" withdrawal by next September.
The spokesman said in a statement to the agency that the Global Coalition to Defeat ISIS (Operation Inherent Resolve) will transition from its military mission in Iraq to a more traditional bilateral security partnership, stressing the continuation of the coalition's civilian-led efforts at the global level.
He emphasized that this shift does not mean the end of the international coalition's work to defeat ISIS, but rather comes as part of a transition plan to enhance stability in Iraq through security partnerships and ongoing civilian cooperation.
A government source told Shafaq News Agency that Iraq has agreed with the international coalition countries, primarily the United States, on a timetable for ending the coalition's mission. The timetable stipulates ending its presence with the central government in September 2025, leading to a full withdrawal in September 2026, with the number of its forces gradually reduced to less than 500 personnel, whose presence will be limited to Erbil, while the rest will be transferred to Kuwait.
The withdrawal of the US coalition... Is the war over or has new influence begun?
The US Embassy in Iraq announced on Monday that the withdrawal of the international coalition from the country does not mark the end of its work against the terrorist organization ISIS, noting that its military mission will transform into a bilateral security partnership with Iraqi security forces.
In statements to Al Jazeera, monitored by Al-Mustaqilla, the embassy confirmed that the international coalition will continue its civilian efforts worldwide, raising questions about the form and extent of future US intervention in Iraq and the extent to which this partnership will impact Iraqi sovereignty.
Observers believe this shift may represent a less obvious reshuffle of the US presence, but it could continue to shape the course of politics and security in Iraq. While others believe the bilateral security partnership could give Iraqi forces an opportunity to independently enhance their capabilities to counter terrorism, the ambiguity surrounding the nature of this partnership raises concerns about the continued indirect influence of foreign powers.
Amid these statements, the most prominent question remains: Is the coalition's withdrawal a real step toward Iraq regaining its independent security decision-making, or merely a change in form without any change in reality?
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