Economist: Controlling exchange rates is the responsibility of the Central Bank, and the challenges facing banks continue.
Nouri told Al Furat News Agency, "The Central Bank faces challenges in light of the fact that many private banks operate outside its controls and conditions, in addition to the conditions set by the US Federal Reserve regarding foreign currency transfers."
He added, "Controlling exchange rates in the parallel market is difficult to completely eliminate. The solution lies in reducing price fluctuations through the flexibility of the central bank's tools in response to global fluctuations."
Nouri continued, "Private banks' response and adaptation to the Central Bank's lending instructions contributes to revitalizing the Iraqi economy." He explained that "the instructions for external financial transfers for import purposes are similar to the US Federal Reserve's procedures in this area, which requires private banks to fully adapt and comply with the Central Bank's instructions.
Iraq faces a difficult economic test: a huge fiscal deficit and mounting banking challenges.
By the end of July 2025, it was clear that the Iraqi economy was facing a severe test. The Eco Iraq Monitor recorded a fiscal deficit of 12.15 trillion dinars, despite non-oil revenues representing 10% of total public revenues for the first time. However, this percentage, despite its symbolic importance, remains limited given the dominance of oil in the budget structure, which still relies on oil revenues to a greater extent than 89%, according to Ministry of Finance data.
Growing deficit amid ballooning expenditures
Total public expenditures reached 84.18 trillion dinars by the end of July, distributed in a manner that reveals the structural imbalance in the budget: current expenditures alone amounted to 62.27 trillion dinars, representing nearly three-quarters of spending, compared to 13.06 trillion dinars for investment expenditures and 8.53 trillion dinars for oil licensing rounds, while the allocations for the Chinese agreement did not exceed 321 billion dinars. Public revenues, meanwhile, amounted to 72.03 trillion dinars, of which 64.96 trillion dinars were from oil and only 7.07 trillion dinars from non-oil sources. This disparity between spending and revenues reflects a chronic dependence on oil, making the fiscal deficit a permanent reality, not merely a temporary circumstance.
The banking system is under debt pressure
In parallel with the budget crisis, data from the Iraq Future Foundation showed that banking system assets rose to 275 trillion dinars in the first half of 2025, a 5% increase over the previous year. Although this increase was linked to a 26% growth in reserves and capital, indicators reveal a worrying shift: foreign reserves fell to 58% of assets, compared to 68% in 2024, while government debt jumped to 13%, a 116% increase, and private sector debt rose to 20%. Thus, the share of debt rose to 32% of assets, compared to 24% last year, a trend that could worsen, making debt half of assets soon.
Oil volatility and its consequences
The biggest challenge facing Iraqi finances remains oil-related. Over the past week, Basra crude suffered a loss of more than 7%, with heavy crude closing at $63.21 per barrel, and medium crude at $64.76. This decline reflects global market volatility amid disagreements within the OPEC+ alliance over production increases. S&P Global's warnings were clear: falling oil prices threaten crude-dependent countries, like Iraq, with public spending cuts and the postponement of infrastructure projects.
If the gap between the price of a barrel and the budget breakeven price persists, the deficit could rise to more than 64 trillion dinars, according to economists' estimates. This could directly jeopardize the state's ability to pay salaries or finance investments.
In this context, there is frequent talk of maximizing non-oil revenues. However, this ambition remains besieged by profound financial and administrative challenges, from the weakness of the production base to limited tax and customs reform. While local and international experts acknowledge that the transition away from oil is a necessity, not an option, implementation requires a long-term vision that goes beyond patchwork solutions based on debt.
The Iraqi economy today is stuck between a mounting fiscal deficit, massive operating expenses, the near-absolute dominance of oil, and a shift in the banking system's structure toward debt at the expense of reserves. If oil prices continue to decline, pressure on public finances will increase, threatening both economic and political stability. Absent radical reform, Iraq may remain in a vicious cycle of deficit and debt, while the economy remains hostage to the volatility of the oil market.
Institution: Total assets of the Iraqi banking system rise to approximately 275 trillion dinars
The Iraq Future Foundation for Economic Studies and Consultations reported on Saturday that the total assets of the banking system reached approximately 275 trillion Iraqi dinars at the end of the first half of 2025, registering a 5% increase compared to the end of the first half of 2024, according to data released by the Central Bank of Iraq.
The institution's chairman, Manar Al-Obaidi, said in a post today that this increase is primarily due to an increase in reserves and capital, which grew by 26% during the same period, despite a 4% decline in the money supply and an 8% decline in other deposits.
Asset distribution
The assets of the Iraqi banking system were distributed as follows:
Foreign reserves: They constituted 58% of total assets, despite a 10% decrease compared to the same period last year.
Government debt: It accounted for 13% of total assets, recording a significant jump of 116% compared to the first half of 2024.
Private sector debt: represented approximately 20% of total assets, an increase of 15% compared to the same period last year.
Thus, the share of debt (government and private) rose to 32% of total assets.
Compared to 2024
According to Al-Obaidi, a comparison with the first half of 2024 indicates a significant change in the structure of assets. Foreign reserves represented 68% of total assets at the time, while government debt did not exceed 6%, and private sector debt accounted for only 18%. Consequently, the total debt share at the time did not exceed 24% of assets.
The head of the institution continued by saying that the clear shift in the structure of assets, in favor of debts at the expense of reserves, has significant implications for the stability of the Iraqi banking system. If this trend continues, the debt ratio could exceed half of total assets in the coming period. He concluded by saying that concern is growing, especially with the rise in the volume of government debt, most of which is directed towards financing operating expenses rather than being invested in productive projects capable of generating returns that contribute to repaying these obligations.
Housing developer regulations aim to organize Iraq’s real estate sector, adviser says
The financial adviser to the prime minister, Mazhar Mohammed Saleh, said that the new housing developer regulations approved by the Council of Ministers will help organize Iraq’s housing sector, unify project standards, and promote fairness and transparency while reducing construction chaos.
The Council of Ministers approved the developer regulations in its last Tuesday session, describing them as “a first-of-its-kind roadmap with clear standards and guidelines to support the housing sector by providing serviced plots with infrastructure and suitable prices for citizens, ensuring inclusiveness across all segments of society.” The government said the regulations also “set clear paths for converting state-owned and managed lands into residential areas in line with international standards.”
Saleh told the Iraqi News Agency that “the housing developer regulations approved by the Council of Ministers work to standardize and regulate the criteria under which developers will operate, particularly regarding infrastructure, engineering specifications, safety standards, land use, and other technical and organizational aspects.”
He explained that the regulations link the right to use or invest in land to the availability of services. “No developer will be granted investment rights unless the land is serviced or the developer undertakes to provide those services,” Saleh said, adding that the new system allows for easier conversion of non-residential or state-owned lands into housing projects “according to defined standards.”
“The main goal,” he added, “is to ensure inclusiveness by providing housing options suitable for all segments of society, especially low- and middle-income groups, to help narrow the housing gap in the country.”
Saleh noted that “the new regulations will build confidence in real estate projects because investors and citizens will see that these projects are managed under clear and documented standards.” He said the framework will reduce illegal construction, limit encroachments, improve the urban landscape, and accelerate government procedures to address corruption and bureaucratic delays.
He added that enforcing the regulations “will enhance the quality of urban planning and sustainable land use and create a stable, attractive investment environment for both local and foreign capital thanks to the clarity of the legal and regulatory framework.” He also predicted that the measures “will help reduce housing prices or at least prevent sudden increases by controlling costs and organizing infrastructure work.”
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The Iraqi parliament will not be in session until the elections. What are the reasons?
An Iraqi parliamentarian revealed the existence of a political will aimed at continuing to disrupt parliamentary sessions until the next parliamentary elections. Meanwhile, a researcher pointed to political calculations obstructing legislative work.
MP Yasser Al-Husseini said in an interview with the "Al-Jabal" platform on Saturday, October 4, 2025, that "the inability of the House of Representatives to hold its sessions during the current period is due to the lack of political will and the intention to keep Parliament paralyzed until it is dissolved as the election date approaches."
The MP stated that "the deliberate disruption of sessions is not due to technical or procedural reasons, but rather to hidden political agreements that seek to keep the parliament paralyzed, depriving citizens of the parliament's oversight and legislative role at a time when important decisions are required." He added that "there are political forces that see the continued disruption of parliament as an opportunity to pass the time until the next elections, with the aim of avoiding the constitutional and oversight obligations imposed by this stage. This behavior contradicts the principles of democracy and undermines the public's confidence in elected institutions."
The Iraqi parliament was scheduled to hold a parliamentary session last Wednesday to discuss and vote on 11 draft laws and proposals. However, the lack of a quorum prevented the session from convening for the third time in as many days.
"Political calculations"
For his part, political affairs researcher Riyadh Al-Wahili agreed with the parliamentarian's position, saying in a separate interview with Al-Jabal that "Parliament is facing a clear paralysis in holding its sessions, not as a result of technical or procedural circumstances, but rather due to the political will and premeditated intent of some influential forces. There is a clear tendency to disrupt parliamentary work and leave Parliament in a state of stagnation until it is officially dissolved as the electoral deadline approaches."
Al-Wahili explained that "this obstruction reflects narrow political calculations aimed at exploiting the legislative vacuum for electoral gains, rather than adhering to Parliament's constitutional role of oversight and legislation."
According to him, "the continuation of this situation could open the door to further political crises, as the absence of parliamentary sessions means the absence of crucial decisions that affect people's daily lives, in addition to the suspension of necessary legislation to keep pace with the current situation."
The political affairs researcher concluded his remarks by noting that "if political will remains bound by electoral calculations, Parliament will lose its justification for existence and will remain mired in obstruction until the next elections finally decide its fate.
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Parliament postpones the 2025 budget law until after the elections.
Al-Saadi told Al Furat News Agency, "The House of Representatives is expected to hold a single session this week to approve a set of laws, after which the electoral race will begin."
Nouri al-Maliki: Vote to strengthen Iraq’s democracy
On Saturday, State of Law Coalition leader and former Prime Minister Nouri al-Maliki warned that boycotting the November 11 elections would amount to yielding to “evil,” stressing that holding the vote on schedule offers reassurance amid regional tensions.
The coalition, a Shiite-led bloc central to Iraqi politics since 2005, has recently faced defections, including from senior members.
Al-Maliki told supporters during an electoral rally that timely elections affirm the “endurance of Iraq’s democratic experiment” and its ability to weather crises since the fall of Saddam Hussein’s Baath regime.
Acknowledging shortcomings in Iraq's state institutions, he urged political forces to embrace reform, beginning with strengthening those institutions, confining arms to the state, and bolstering security forces.
Iran and Iraq sign a memorandum of understanding to establish a joint border market.
Arvand Free Zone CEO Mustafa Khanzadi announced the signing of a joint agreement between the zone (in Khuzestan, southeastern Iran), the Basra Provincial Council in Iraq, and the General Authority for Free Zones in Iraq to establish a joint commercial market in the border city of Shalamcheh.
Iran and Iraq sign a memorandum of understanding to establish a joint border market.
Arvand Free Zone CEO Mustafa Khanzadi announced the signing of a joint agreement between the zone (in Khuzestan, southeastern Iran), the Basra Provincial Council in Iraq, and the General Authority for Free Zones in Iraq to establish a joint commercial market in the border city of Shalamcheh.
On Saturday, during a joint meeting held with the participation of Iranian and Iraqi delegations to discuss ways to develop bilateral trade cooperation in the Arvand Free Zone, Khanzadi highlighted the strategic importance of the Shalamcheh border crossing in expanding economic, trade, and transportation relations between the two countries.
The official stated, "This agreement was concluded within the framework of the Islamic Republic of Iran's broad guidelines aimed at enhancing border trade, developing the maritime economy, and facilitating the movement of passengers and goods between the Arvand Free Zone and Basra Governorate."
He added, "Based on the concluded agreement, the two parties are committed to putting measures on the agenda, including announcing the list of prohibited goods before exchange, activating the electronic declaration system (manifesto), coordinating working hours, and operating the Shalamcheh border crossing around the clock." He noted that the TIR agreement system will soon be activated in Iraqi customs, the ATA system for temporary transit of exhibition goods, and international taxi services between Basra and the Arvand Free Zone.
Khanzadi continued: "The two sides also agreed to form joint executive committees, provide customs infrastructure, facilitate the transit of Iranian and Iraqi vehicles, and establish a specialized insurance company in Shalamcheh, all to ensure prompt and accurate implementation of this memorandum of understanding."
He added: This three-year agreement is an important step toward increasing economic interactions, revitalizing border trade, facilitating transit, and developing sustainable cooperation between Iran and Iraq, and the Arvand Free Zone will play a pivotal role in its implementation.
In a related development, Hassan Abbasi, Director General of the Border Affairs and Border Areas Population Office of the Iranian Ministry of Interior, confirmed that the implementation of the memorandum of understanding will have a significant impact on the development of exports and traffic through the Shalamcheh border crossing.
Abbasi emphasized the importance of cooperation between the governments of Iran and Iraq, noting that the development of the Shalamcheh International Border Crossing will provide numerous investment and employment opportunities. He also considered economic prosperity to be one of the benefits of establishing a joint border trade market in the region.
He added that launching this market will significantly contribute to supporting the region's economy, provide an environment for developing non-oil exports, and play a pivotal role in the prosperity of the local economy.
For his part, Basra Provincial Council Chairman Mohammed Kazim emphasized during the meeting the development of the Shalamcheh border crossing between Iraq and Iran, noting that work is underway to develop the crossing in Basra province to overcome the problems hindering the exchange of goods between the two countries.
Kazem stated that progress in implementing the Arvand Free Zone projects is a key incentive for developing economic relations with Basra Governorate, and that there are numerous economic and trade projects that could strengthen the existing good relations between the two countries.
The Iraqi official also stressed the need to consolidate the historical relations between Iran and Iraq, calling for greater unity and cohesion between the two countries than ever before. He also highlighted the importance of the Shalamcheh-Basra railway project and its significant impact on trade relations, calling for its opening and commencement of operations to be expedited.
Hamas hands over Gaza to an independent body and agrees to Trump's proposal. Full text of the statement.
She thanked the mediators and "deepened the dialogue."
Hamas announced on Friday its approval of US President Donald Trump's proposal for a prisoner exchange and the handover of the administration of the Gaza Strip to an independent Palestinian body, as part of a comprehensive national consensus. Hamas affirmed its rejection of the displacement of Palestinians and the occupation of the Gaza Strip, while committing to immediately entering into negotiations through mediators to discuss the details, while postponing political issues related to the future of Gaza to a comprehensive national framework that respects Palestinian rights and constants.
Hamas statement:
In an effort to halt the aggression and war of extermination against our steadfast people in the Gaza Strip, and based on national responsibility and concern for the principles, rights, and supreme interests of our people, the Islamic Resistance Movement, Hamas, has held in-depth consultations within its leadership institutions, broad consultations with Palestinian forces and factions, and consultations with mediating brothers and friends, to reach a responsible position in dealing with US President Donald Trump's plan.
*After a comprehensive study, the movement made its decision and submitted the following response to the mediating brothers:*
The Islamic Resistance Movement, Hamas, appreciates the Arab, Islamic, and international efforts, as well as the efforts of US President Donald Trump, calling for an end to the war on the Gaza Strip, an exchange of prisoners, the immediate entry of aid, the rejection of the occupation of the Strip, and the rejection of the displacement of our Palestinian people from it.
In this context, and in order to achieve a ceasefire and a full withdrawal from the Gaza Strip, the movement announces its agreement to release all living and dead Israeli prisoners, in accordance with the exchange formula contained in President Trump's proposal, provided the necessary conditions are met on the ground for the exchange. In this context, the movement affirms its readiness to immediately enter into negotiations through mediators to discuss the details of this process.
The movement also reiterates its agreement to hand over the administration of the Gaza Strip to a Palestinian body of independent technocrats, based on Palestinian national consensus and Arab and Islamic support.
The other issues included in President Trump's proposal, relating to the future of the Gaza Strip and the inherent rights of the Palestinian people, are linked to a comprehensive national position and based on relevant international laws and resolutions. They will be discussed within a comprehensive Palestinian national framework, within which Hamas will be a part and to which it will contribute responsibly.
The Houthis announce the continuation of their operations against Israel "unless requested by Hamas."
Yemen's Houthi Ansar Allah group confirmed on Saturday that it would continue its military operations against Israel and would not cease unless Hamas requested it to do so.
In a statement, it said, "To our heroic brothers in Hamas and Islamic Jihad, we say: We are not concerned with the details of the negotiations, because the decision is in your hands. However, we will continue to fulfill our pledge, and just as our supportive military operations began at your request, they will not stop except at your request."
She added, "Military operations will resume whenever Hamas requests them," stating, "Your fate is our fate, and we are with you until victory or martyrdom. And those who have wronged will know what a fate awaits them."
This came after Hamas announced its agreement to release all hostages, living and dead, in accordance with US President Donald Trump's proposal for the Gaza plan, affirming its readiness to immediately enter into negotiations through mediators to discuss the details.
For his part, Mohammed al-Farah, a member of the Houthi political bureau, said, "Hamas' response to the Trump plan is realistic, feasible, open to solutions, and demonstrates great flexibility."
The Houthi official considered Hamas's position to reflect "a responsible response to halt the aggression and starvation, protect Gaza, and preserve national unity and Palestinian constants."
Iranian MP: We will close the Strait of Hormuz if we are not allowed to sell oil
Yaghoub Rezazadeh, a member of the Iranian parliament's National Security Committee, said, "If the enemies do not allow Iran to sell its oil, we will not allow them to pass through the Strait of Hormuz."
Rezazadeh described Iran as one of the world's largest oil exporters, noting that "if the export or sale of our oil is prevented, we will respond."
He added that Iran's nuclear, missile, and defense issues are not open to discussion or negotiation, stressing that the "trigger mechanism" has been used for years as a "tool of threat" against Tehran.
