An economist identifies a reason behind the sudden rise of the dollar against the Iraqi dinar.
The video for this My FX Buddies Blog is below here:
On Tuesday, economist Manar Al-Obaidi attributed the rise in the exchange rate of the dollar against the Iraqi dinar in the parallel market to the imminent implementation of the customs pre-calculation mechanism. While praising this mechanism, he said that despite its temporary side effects on the local market, it will raise the country's customs revenues to 6-8 trillion dinars annually.
Al-Ubaidi said in a post on the social networking site Facebook today that the Iraqi dinar witnessed a significant decline yesterday in the parallel market, coinciding with most speculators refraining from selling dollars, which created a state of confusion and anxiety in the markets.
He added that “despite the widespread talk about an intention to change the official exchange rate, the Central Bank’s statement was clear and decisive: ‘There will be absolutely no change in the exchange rate,’” adding that “this announcement alone confirms that the Central Bank is committed to monetary stability and will not make any changes to the official rate.”
The Central Bank of Iraq confirmed on Monday that there is no intention to change the exchange rate of the Iraqi dinar against the US dollar, stressing its continued support for the stability of the exchange rate, and indicating that statements related to changing it aim to confuse the market, provoke speculation and affect the stability of the national economy.
The statement from the Central Bank of Iraq comes in conjunction with a sudden rise in the exchange rate of the dollar in Iraqi markets yesterday, amid economic controversy over the reasons for the rise and its repercussions on the general budget and the local economy.
What is the real reason behind the fluctuation?
Al-Obaidi explained that "the real movement in the market is not related to the official exchange rate, but rather to the imminent implementation of the pre-calculation mechanism for customs, which is a long-awaited step. Starting from 1/12/2025, no bank will be allowed to execute an external transfer unless the customs fees have been calculated in advance."
The economist also pointed out that "this mechanism will bring about significant changes, most notably:
A significant increase in state customs revenues, control over customs smuggling that has drained the country’s resources for years, prevention of fictitious transfers used for speculation or money laundering, and a reduction in the volume of random imports that consume a large part of foreign reserves.
Al-Ubaidi pointed out that “naturally, any such radical reform will face widespread resistance, especially from: speculators who will exploit every opportunity to raise the price of the dollar, small traders who have not organized their commercial and banking transactions, and the parties that have benefited from the chaos in transfers and customs over the past years,” indicating that “therefore, we expect a turbulent month of statements, pressures, and media scaremongering.”
Why is this mechanism important despite all the noise?
Al-Ubaidi added that "if the mechanism is implemented correctly and continues without setbacks, it will be the biggest blow to customs smuggling operations in 20 years, and it is also capable of: raising customs revenues to 6-8 trillion dinars, reducing artificial demand for the dollar, reducing unnecessary imports, protecting foreign reserves, and enhancing the prestige of the financial and administrative system in Iraq."
He noted that "in fact, the current government deserves credit for its insistence on implementing this mechanism, as it is a major reform step that requires a courageous decision and patience in the face of pressure."
There are side effects
The economist went on to say that it is natural for the markets to witness: a temporary rise in the prices of some goods, fluctuations in the parallel market, and fierce media campaigns against the decision, adding that "these changes are temporary pains, similar to the pains of the necessary surgical operation to repair what was corrupted by years of chaos and smuggling."
He concluded by saying that what is happening today is not a currency crisis, but rather a natural reaction of a market that has begun to regulate itself after two decades of chaos. If the government succeeds in moving forward and does not succumb to pressure, Iraq will be on the verge of a historic customs reform that will recalibrate foreign trade and protect its reserves from continued depletion.
Shafaq News Agency published a report yesterday, Monday, regarding the sudden rise of the dollar, which addressed the challenges and concerns associated with the rise and its potential effects, amid differing views among experts on government measures, with agreement on the need to adopt an integrated package of reforms instead of relying on a single tool.
another version
Due to a decision to be implemented in 6 days, an expert reveals the reason for the rise in the dollar's price and predicts "a turbulent month of exaggeration."
Economic researcher revealsManar Al-ObaidiOn Tuesday, the reasons behind the rise in dollar exchange rates yesterday in the parallel market in Baghdad and the provinces were revealed, as exchange rates jumped to 144,000 dinars per 100 dollars, after having been stable between 40,000 and 141,000 dinars in recent weeks.
He saidAl-UbaidiIn a blog post I followedAlsumaria News“The Iraqi dinar witnessed a decline yesterday, coinciding with most speculators refraining from selling dollars, which created a state of confusion and anxiety in the markets,” he noted, adding that “despite the widespread talk about an intention to change the official exchange rate, the Central Bank’s statement was clear that there were no intentions to change the exchange rate.”
He explained that "the real movement in the market is not related to the official exchange rate, but rather to the imminent implementation of the pre-calculation mechanism for customs duties, a long-awaited step. Starting December 1, 2025, no bank will be allowed to execute any foreign transfer unless the customs duties have been pre-calculated."
He indicated that "this mechanism will bring about significant changes, including a substantial increase in state customs revenues, control over customs smuggling that has drained the country's resources for years, prevention of fictitious transfers used for speculation or money laundering, and a reduction in the volume of haphazard imports that consume a large portion of foreign reserves."
He considered that "any such radical reform will face widespread resistance, especially from speculators who will exploit every opportunity to raise the dollar's price, small traders who have not organized their commercial and banking transactions, and those who have benefited from theChaos"In transfers and customs over the past years."
He pointed out that "therefore, we expect a turbulent month of statements, pressure, and media hype," explaining that "if the mechanism is implemented correctly and continues without setbacks, it will be the biggest blow to customs smuggling operations in 20 years, and it is also capable of increasing revenues."CustomsTo 6-8 trillion dinars and reduce the artificial demand for the dollar and reduce unnecessary imports."
Between talk of raising the dollar exchange rate and the scandal of withdrawing 2.5 trillion, the Iraqi economy enters a phase of “open anxiety”.
Talk of a repeat of the scenario of raising the price of the dollar in Iraq has sparked widespread fears among citizens, who believe that any potential increase could negatively affect their purchasing power and exacerbate living pressures.
Economic expert Nabil Al-Marsoumi suggested that changing the exchange rate would be the first measure within the economic reform program, indicating that the expected figure ranges between 180,000 and 200,000 dinars.
Al-Marsoumi said, “Changing the exchange rate will be the first measure within the economic reform program, as the program requires changing the rate, and not everything that results from changing the exchange rate is negative, but there are some positives.”
Experts believe that raising the price of the dollar at this stage will create direct economic pressures on broad segments of society, especially the middle and low-income classes, which may lead to popular protests against the government.
Moreover, relying on currency appreciation to provide liquidity is a short-term and unsustainable solution if it is not accompanied by structural reform in public spending and improved resource management.
Warnings of consequences!
For his part, economist Abdul Salam Hassan warned of the consequences of raising the price of the dollar in Iraq as a measure to provide financial liquidity, stressing that this option may be ineffective and increase the suffering of citizens.
Hassan told Iraq Observer that “the government’s wrong financial policies during the past period are the main reason for the crisis, as the governments did not work to maximize non-oil revenues or carry out real reforms in the private sector, nor did they make effective efforts to combat corruption.”
He added that “government spending is proceeding recklessly without a clear objective, which exacerbates the financial pressure on the state and citizens,” calling for “avoiding raising the price of the dollar, and working instead to reduce the salaries of special grades, parliamentarians, and the three presidencies to the level of ordinary employees’ salaries,” stressing that “failure to do so will make any financial policy unacceptable to the public.”
He stressed the need to genuinely combat corruption and achieve tangible progress in this area, in addition to maximizing revenues from religious, recreational, and other tourism as a way to enhance the state's financial resources without imposing additional burdens on citizens.
He added that “adopting these measures can enhance the stability of the national economy and curb financial deterioration, while ignoring them will exacerbate the economic and social crisis in the country.”
Labor Minister Ahmed Al-Asadi’s statement sparked widespread controversy in popular and political circles, after he revealed that 2.5 trillion dinars had been withdrawn from the Social Welfare Fund.
Al-Asadi explained in a recent televised interview that he was surprised by the withdrawal of these sums, noting that there was a blame game between the Ministry of Finance and Al-Rafidain Bank regarding the management of these funds.
Inflation in Iraq: Between reality and public opinion... Experts disagree on the accuracy of measurement and the future of prices
Debate is intensifying in Iraq regarding the accuracy of official inflation figures, as international and governmental institutions reveal conflicting interpretations of price movements in the local market. While IMF data points to a downward trend in Iraqi inflation over the coming years, a number of experts believe that official indicators remain far removed from the reality experienced by ordinary citizens on a daily basis.
According to data from the International Monetary Fund, inflation in Iraq recorded a rate of 3.6% during 2024, down from 5.3% in 2023 and 5% in 2022, with the Fund expecting the rate to decrease further to reach 2% by 2028.
However, these figures come at a time when the Iraqi Ministry of Planning confirms that inflation witnessed a slight increase of 0.2% in September compared to August, while annual inflation decreased during the same month by 0.3% compared to September 2023, according to the ministry's spokesman, Abdul-Zahra Al-Hindawi.
The Ministry of Planning's report reveals a mixed picture of price movements. Food and non-alcoholic beverage prices fell by 0.2%, driven by declines in fish (5.5%), meat (0.7%), and bread and cereals (0.2%). Clothing and footwear prices also decreased by 0.8%, while household furnishings, communications, and hotels saw slight decreases of 0.1% each. The recreation and culture sector experienced a 0.3% decline. Conversely, housing prices rose by 0.9%, and tobacco (0.2%), healthcare (0.4%), and miscellaneous goods and services saw a notable increase of 2.2%.
Despite these figures provided by the International Monetary Fund and official bodies, financial researcher Ahmed Hadhhal believes that the real inflation is much higher than announced, stressing that the survey conducted by the Ministry of Planning suffers from problems in sampling and weighting, which makes the data “not reflective of the actual reality.”
Al-Humaidawi points out that the prices of many goods have risen by up to 100% in some cases and 50% in others, while these jumps do not appear in the official index.
He asserts that excluding the impact of the parallel exchange rate from the inflation calculation makes the index “unrealistic,” noting that understanding the type of inflation — whether imported, monetary, or structural — becomes almost impossible given the weakness of the database.
Economist Manar Al-Obaidi goes even further by questioning the usefulness of continuing to issue data that does not reflect reality, pointing out that the inflation report for September showed a decrease in some items, even though the market is witnessing clear increases.
Al-Ubaidi asserts that the data collection method is the biggest flaw, while an additional problem arises from the lack of accurate weighting for each governorate. Baghdad, which contains more than 20% of the country's population, cannot be equated with small governorates like Muthanna. He believes that the differences in purchasing power and price levels between governorates should be reflected in the final index to provide a more accurate picture of actual inflation.
In a related context, expert Ali Daadoush points out that the difference in consumer cultures between cities deepens the data gap, noting that clothing prices usually rise in September with the start of the school season, while the official report showed a decrease of 0.8%, which reinforces the belief that data collection mechanisms do not accurately capture seasonal movements.
However, economist Faleh al-Zubaidi offers a different perspective. He argues that inflation in Iraq is primarily linked to the exchange rate and the money supply, and that the reliance of most goods on imports makes monetary fluctuations the most influential factor. He maintains that the geographical division of provinces is not a decisive factor in calculating inflation as long as the market remains unified. Al-Zubaidi believes that rising housing costs are the biggest driver of inflation, while controlling its level remains the responsibility of the Central Bank. He also asserts that the government must address economic disparities between provinces by stimulating investment.
This debate reveals a clear picture: that inflation in Iraq suffers not only from high prices or market fluctuations, but also from the absence of a unified and accurate methodology for measuring it, and from a significant discrepancy between what the citizen observes in his daily life and what appears in official and international reports.
Between the IMF indicators, the Ministry of Planning's data, and the experts' objections, it seems that the path to an accurate reading of inflation requires a comprehensive reform of the databases, methods of collecting prices, and the weighting of governorates, in order to make the index closer to reality and more capable of guiding the country's economic policy.
The Central Bank of Iraq confirms the stability of the exchange rate and achieves the lowest inflation levels in the region.
As the end of 2025 approached, the Central Bank of Iraq announced that it had made tangible progress in its strategic objectives related to maintaining the stability of the general price level, as the inflation rate recorded a decrease to historically low levels that are the lowest in the region, supported by its monetary policies and well-considered measures despite the current economic challenges.
The Central Bank clarified in an official statement that the Central Bank Law No. (56) of 2004, particularly Article 1/4/A, clearly defines its core functions in formulating and implementing monetary policy, including exchange rate policy. In this context, the Bank affirmed that it has no intention of adjusting the exchange rate of the Iraqi dinar, in line with its central objective of ensuring price stability, an objective that has been successfully achieved in the past period.
The statement stressed that the central bank continues to support exchange rate stability, bolstered by ideal levels of foreign currency and gold reserves.
The Central Bank also confirmed that it continues to cover all banks’ requests for external reinforcement in US dollars and other foreign currencies such as the Chinese yuan, the Turkish lira, the Indian rupee, and the UAE dirham, as well as continuing to process bank card settlements and personal transfers through MoneyGram and Western Union, in addition to cash sales for travel purposes, noting that there is no pressure on current foreign reserves.
The statement noted that any external statements or opinions regarding changing the exchange rate of the Iraqi dinar do not reflect the position of the Central Bank, and represent speculations aimed at confusing the market, stirring up speculation, and affecting the stability of the national economy. Central Bank of Iraq,
Media Office,
November 24, 2025
Media Office,
November 24, 2025
from the cbi and they tweeted it too
The Governor of the Central Bank chairs the periodic meeting of the Iraqi Payments Council
The meeting addressed several key topics related to the procedures and mechanisms employed by ministries and public sector institutions in adopting electronic payment technologies, the progress achieved in implementing these tools and channels, and digital transformation initiatives aligned with the strategic visions and plans adopted by these entities.
The Council reviewed financial inclusion indicators, the availability and reach of financial and banking services, and the impact of developing payment infrastructure on various sectors and segments of society.
The Council emphasized the importance of continuing efforts and initiatives aimed at expanding financial literacy and establishing the foundations and principles of financial awareness across all sectors.
It is worth noting that the Iraqi Payments Council aims to coordinate cooperation in the field of national payments and electronic payments among regulatory authorities and executive bodies in the public and private sectors, as well as financial and banking institutions.
Media Office
Want to Support My FX Buddies?
.png)
CoinChapter dot com new write up with emojis
https://coinchapter.com/
Presale Ending December 1, 2025
Just a reminder, the Presale for the HNOCOIN at $0.0005 ends at midnight December 1, 2025. After that date the Launch price will be $0.001
my link to get 5000 bonus coins or use the QR code below
Support My FX Buddies Big or Small I appreciate it all
BuyMeACoffee CashApp:$tishwash
https://paypal.me/tishwash
.jpeg)
Iranian President Approves Redenomination of National Currency
Iranian President Masoud Pezeshkian has signed a decree to redenominate the national currency and officially notified the Central Bank of its implementation.
According to the presidential administration's statement, “Pezeshkian has informed the Central Bank about the entry into force of the amendment to paragraph ‘a’ of Article 58 of the Central Bank Law, which provides for the redenomination of the national currency,” The Caspian Post informs via Russian media.
Under the new system, the Iranian rial will lose four zeros, meaning 10,000 rials will be equal to 1 rial. Additionally, a new unit called the qiran will be introduced, equivalent to one-hundredth of a rial. A three-year transitional period will allow both old and new rials to circulate simultaneously.
The redenomination bill was passed by the Iranian parliament in early October, with 144 lawmakers voting in favor, 108 against, and three abstaining.
The plan was first proposed by the Iranian government in 2019 and has undergone several adjustments since. In 2024, President Pezeshkian proposed renaming the rial to the toman, a currency used before the 1979 Islamic Revolution, but this initiative was rejected.
Officials say the redenomination aims to simplify financial transactions, improve accounting, and stabilize the national currency over the long term.
Iraq seeks to expand its global economic influence
The Ministry of Trade announced its plans to bring national products to global markets, stressing that “Iraqi industries have reached an advanced level.”
The ministry stated that it “is working to support the Iraqi private sector participating in international exhibitions and showcasing Iraqi products in the food, industrial and commercial sectors, and to enhance the role of the General Company for Iraqi Exhibitions and the Export Support Fund.”
She explained: “The achievements of Iraqi industry have reached an advanced level and have established significant pillars in supporting the export of industrial projects and introducing Iraqi materials into global and Iraqi markets.”
KRG to end cash salaries starting 2026 amid full digital transition
All public employees and salary recipients in the Kurdistan Region will be required to receive their salaries digitally through personal bank accounts under the MyAccount project, the Region’s finance ministry announced Sunday, adding that cash payments will no longer be available starting at the beginning of 2026.
“In accordance with all agreements and decisions of the Iraqi Council of Ministers and the federal finance ministry, the end of this year [2025] is the final deadline for opening bank accounts for all employees and salary recipients in the Kurdistan Region,” the Kurdistan Regional Government’s (KRG) finance ministry said in a statement on Facebook.
“Salaries will be disbursed via a digital system [the MyAccount project], meaning the distribution of salaries in cash will cease to exist,” the statement added. It further warned that “anyone who does not participate in the MyAccount project will not receive a salary and will be held personally responsible.”
The MyAccount project, announced in 2023 by Prime Minister Masrour Barzani, is part of the KRG’s initiative to digitize salary payments and improve the disbursement process. It enables public employees to receive payments directly through the banking system.
Speaking at the Middle East Peace and Security (MEPS) Forum in Duhok on Wednesday, Prime Minister Barzani said that Erbil is “focusing on having MyAccount to provide bank accounts to every individual in the country. When they have that, then they can use the services that the bank offers.”
The finance ministry’s statement comes as the initiative enters its final stage. The deadline was established under a February agreement between Baghdad and Erbil requiring all public employees to open private bank accounts by the end of 2025 to ensure salary payments.
Aziz Ahmad, deputy chief of staff to Prime Minister Barzani, said in an October post on X that nearly 550,000 employees and pensioners received their salaries digitally that month. “The long queues we’ve all seen in the harsh winters and summers have ended,” he added.
“With this [October] payment, nearly $400 million will circulate through the Region’s financial sector - allowing the country’s top banks in MyAccount to focus on new products, loans/credit, and help grow the economy,” he added.
For more than a decade, public employees in the Kurdistan Region have struggled with severe financial uncertainty amid ongoing disputes between Baghdad and Erbil. Salaries have often been delayed, reduced, or at times not paid at all.
The Iraqi government has repeatedly failed to release the Kurdistan Region’s share of the federal budget on time, often accusing Erbil of not meeting its financial obligations - a claim the KRG consistently denies.
So far this year, civil servants in the Region have received salaries for only eight months, while their September salaries remain pending. Their counterparts in federal Iraq, meanwhile, have been paid on time throughout the year - a disparity that has weakened market performance in the Kurdistan Region.
Kurdish officials hope that the full implementation of MyAccount will help ensure more consistent disbursement of civil servant salaries in the Region.
The "sudden" rise of the dollar in Iraq: challenges and concerns
The exchange rate of the US dollar in Iraq has been under renewed pressure recently, amid widespread economic debate about the reasons for the rise and its impact on the general budget and the local economy. Experts have differing views on the nature of government measures and their results, with a general agreement on the need for a comprehensive package of reforms instead of relying on a single tool.
On Monday, Iraqi markets recorded a sudden rise in the exchange rate of the dollar against the Iraqi dinar. The Al-Kifah and Al-Harithiya exchanges in Baghdad recorded 144,000 dinars for 100 dollars at midday, compared to 142,250 dinars in the morning. Meanwhile, the selling price in Erbil reached 143,050 dinars and the buying price reached 142,900 dinars for every 100 dollars.
Changing the exchange rate is not a solution
Economic expert Mahmoud Dagher told Shafaq News Agency that the worsening budget deficit prompted the Iraqi government since the end of 2020 to take rapid measures such as reducing the value of the dinar, and then raising the value of the dollar in 2023, but he pointed out that these decisions, despite their importance, are not radical solutions.
Dagher, a former director at the central bank, explained that "reducing or changing the exchange rate cannot be the sole cure for the crisis, as long as it is not accompanied by a set of complementary measures."
He added that the continuation of the crises is linked to the absence of real reforms in key areas such as combating corruption, improving tax collection, developing the electricity and water sectors, and regulating the work of ports and customs.
Dagher also said: “Changing the exchange rate is worthless if it is a one-off measure. Everyone is treating it as a tool to get out of the crisis, while the truth is that the problem is bigger, and the budget gap can only be overcome through an integrated package of tools, foremost among which is linking spending to revenue.”
Monetary cooperation ensures stability
For his part, the Prime Minister’s financial advisor, Mazhar Muhammad Saleh, confirmed to Shafaq News Agency that there is a high level of constructive cooperation between monetary and fiscal policies based on the principle of indirect monetary adjustment.
He explained that this principle provides initial financial leverage to the banking system by enabling it to purchase government bonds from all local banks, through discounting operations which in turn lead to the stability of the banking system’s liquidity.
Saleh explained that this cooperation is not limited to that, but rather constitutes a fundamental pillar for securing the short-term financing requirements of public finances, which ensures maintaining comfortable levels of liquidity for banks on the one hand, and for public finances when needed on the other hand.
He stressed that the cash liquidity needs and the provision of its requirements are proceeding normally and regularly, and that salaries, wages, pensions and all other financial obligations are in a very safe position and do not face any risks in the short and medium term.
Corruption is putting pressure on the dinar.
Economic expert Hilal Al-Taan believes that the decline in crude oil prices, the main source of the general budget, in addition to the decline in non-oil revenues represented by taxes, customs and state property revenues, along with the presence of administrative and financial corruption in most parts of the state, and the lack of deterrent measures for the corrupt, may lead to a decrease in the exchange rate of the dinar against the dollar.
Al-Taan added to Shafaq News Agency: “This is what happened in the 2021 budget when the price of the dollar was raised from 120,000 to 145,000 dinars, which led to a significant increase in the prices of all food and consumer goods, and put pressure on the livelihood of the poor and middle classes with limited income.”
He continued: "Therefore, all expectations are possible in the absence of a sound and realistic economic policy for the Iraqi economy."
It appears that the rise in the price of the dollar in Iraq is not related to a single factor, but rather intersects with financial, administrative and structural challenges that require comprehensive solutions, at a time when the government affirms the continuation of financial stability and its ability to meet basic obligations.
Between experts' warnings and calls for a broad reform package, and the fiscal and monetary policy's adherence to its current plans, the market remains on the lookout for any practical steps that may determine the course of the next phase.
a different version
The dollar is soaring in Iraq... and salvation hinges on a "reform package," not the exchange rate.
The US dollar exchange rate in Iraq has been under renewed pressure recently, amid widespread economic debate about the reasons for the rise and its impact on the general budget and the local economy. Experts have differing views on the nature of the government's measures and their results, with a general agreement on the need for a comprehensive reform package rather than relying on a single tool.
Iraqi markets witnessed a sudden surge in the dollar exchange rate against the Iraqi dinar on Monday. At midday, the Al-Kifah and Al-Harithiya exchanges in Baghdad recorded 144,000 dinars per 100 dollars, compared to 142,250 dinars in the morning. Meanwhile, in Erbil, the selling price reached 143,050 dinars and the buying price 142,900 dinars per 100 dollars. "
Changing the exchange rate is not a cure,"
says economist Mahmoud Daghir in a press interview seen by Video News Agency. He explains that the worsening budget deficit prompted the Iraqi government to take swift measures since the end of 2020, such as devaluing the dinar and then raising the dollar's value in 2023. However, he points out that these decisions, while important, are not fundamental solutions.
Dagher, a former director at the Central Bank, explained that "reducing or changing the exchange rate cannot be the sole solution to the crisis, as long as it is not accompanied by a set of complementary measures."
He added that the continuation of the crises is linked to the absence of genuine reforms in key areas such as combating corruption, improving tax collection, developing the electricity and water sectors, and regulating the operations of border crossings and customs.
Dagher also said, "Changing the exchange rate is worthless if it is a standalone measure. Everyone is treating it as a tool to escape the crisis, while the truth is that the problem is much larger, and the budget deficit cannot be bridged except through a comprehensive package of tools, foremost among them linking spending to revenue."
Monetary cooperation ensures stability.
For his part, the Prime Minister's financial advisor, Mazhar Muhammad Saleh, confirmed in a press statement seen by Video News Agency, the existence of a high level of constructive cooperation between monetary and fiscal policies based on the principle of indirect monetary adjustment.
He explained that this principle provides initial financial leverage to the banking system by enabling it to purchase government bonds from all local banks through discounting operations, which in turn leads to the stability of the banking system's liquidity.
Saleh explained that this cooperation extends beyond this, forming a fundamental pillar for securing short-term financing requirements for public finances. This ensures the maintenance of comfortable liquidity levels for banks on the one hand, and for the public treasury when needed on the other.
He affirmed that cash liquidity needs and their fulfillment are proceeding normally and regularly, and that salaries, wages, pensions, and all other financial obligations are in a very secure position and face no risks in the short or medium term.
Corruption is putting pressure on the dinar.
Economist Hilal al-Taan believes that the decline in crude oil prices, the main source of the general budget, coupled with the drop in non-oil revenues (taxes, customs, and state property revenues), along with widespread administrative and financial corruption in most government sectors and the lack of deterrent measures against corrupt officials, could lead to a decrease in the dinar's exchange rate against the dollar.
Al-Taan added in a press statement seen by Video News Agency: "This is what happened in the 2021 budget when the dollar exchange rate was raised from 120,000 to 145,000 dinars, leading to a significant increase in the prices of all food and consumer goods and putting pressure on the livelihoods of the poor and middle classes with limited incomes."
He continued: "Therefore, all predictions are possible in the absence of a sound and realistic economic policy for the Iraqi economy."
It is clear that the rise in the dollar's price in Iraq is not linked to a single factor, but rather intersects with financial, administrative, and structural challenges that require comprehensive solutions, at a time when the government is asserting its continued financial stability and its ability to meet its basic obligations.
Between experts' warnings and calls for a broad reform package, and the fiscal and monetary policy's adherence to its current plans, the market remains on the lookout for any practical steps that may determine the course of the next phase.
Al-Rasheed Bank relaunches credit card advances with a maximum limit of 15 million dinars.
On Monday, November 24, 2025, Al-Rasheed Bank announced the relaunch of its electronic advance service via credit card with a maximum limit of 15 million dinars.
The service is directed to employees of government departments and members of the Ministries of Interior and Defense whose salaries have been deposited with the bank.
Conditions for obtaining the loan:
– The applicant must not be older than 57 years of age.
The loan amount is equivalent to a maximum of five salaries.
Applications are accepted electronically only through Al-Rasheed Bank's application.
This measure comes as part of the bank's move towards digital transformation and enhancing access to modern financial services in a safe and fast way.
Will Trump subvert Iraq’s 2025 elections by coercing Baghdad into the US–Saudi orbit and away from Iran?
![Supporters of the Reconstruction and Development Coalition drive through the streets and celebrate in Baghdad, Iraq, after the Reconstruction and Development Coalition headed by Prime Minister Mohammed Shia al-Sudani wins the most votes in general elections, according to unofficial results, on November 12, 2025. [Murtadha Al-Sudani - Anadolu Agency]](https://ci3.googleusercontent.com/meips/ADKq_NYTR_JX9Y52D-PHNK4Ju63V3bLB1HQyPs3emf2vXrWRBYZZjujKYcAIS0hTQjF0khFq6oqGWrizk7FvxvuyMoqPlxFjHiiAg2EH4qnPTlkvSuicJ_SXaAV6X_4oJSNFf89E9NwXeVH3U9hsC4e5VvdIQeU1MO2GJcR17coxQitmIvAHQUL79H90fdgGH-OR8XoIr59JpS4j2gr2DklyazSG-3O5vP6DepkExFSaD9WCtUJLuE-zbj-k1VnyoTxFuorqa4AkoaTL04-fz7aJBY6B_2Bku3PAtHLgbdGA=s0-d-e1-ft#https://i0.wp.com/www.middleeastmonitor.com/wp-content/uploads/2025/11/AA-20251112-39693517-39693513-SUDANILED_COALITION_WINS_IRAQS_GENERAL_ELECTION_UNOFFICIAL_RESULTS_SHOW-2.jpg?fit=920%2C614&ssl=1)
Iraqi political blocs—particularly those representing the Shia majority—were holding their breath, fearing an embarrassing low turnout that would break the record of 41 per cent in the 2021 elections and cast serious doubt on the legitimacy of the new government. Against all odds, the turnout in the 2025 parliamentary elections exceeded all expectations, reaching 56.11 per cent, despite Muqtada al-Sadr’s steadfast determination to boycott the elections. Al-Sadr, who commands a strong base of diehard supporters, had won the largest number of seats—73—in the 2021 elections. Yet, due to his inability to form a national majority government, he withdrew his bloc from parliament and vowed to boycott the political process.
While Iraq’s Prime Minister Mohammed al-Sudani—whose coalition, Construction and Development, came first in the fiercely contested elections—scrambled to attribute the surge in turnout to his government’s accomplishments (which is partially correct), in reality there were other factors at play.
First, with al-Sadr out of the way, the various components of the Coordination Framework (CF)—an alliance of Shia pro-Iran parties and political representatives of armed groups—swiftly moved to contest the elections separately, thus attracting a wider range of voters.
Second, with Sudani turning his back on the CF—which nominated him in 2022 to the premiership—by defiantly forming his own coalition and vying for a second term, CF heavyweights such as Nouri al-Maliki, head of State of Law (SOL), and Hadi al-Amiri, head of the Badr Organisation, joined the fray, reviving interest among voters.
Third, the outrageous atrocities that took place in Syria after the overthrow of the Assad regime—particularly against the Alawites and Druze minorities—coupled with stark sectarian threats against the Shia in Iraq, served as a wake-up call to the Shia heartland.
Fourth, as ever, Sunni, Shia, and Kurdish leaders deliberately stoked sectarian and ethnic tension in order to serve as a rallying cry, sparking more voter interest.
Fifth, the failure of Sunni and Kurdish leaders to embrace al-Sadr’s call to turn the boycott of elections into a tool for combating corruption not only called into question the viability of the boycott but also empowered CF leaders to depict it as a weapon specifically designed to discourage Shia voters.
Sixth, Trump’s envoy to Iraq, Mark Savaya—appointed on 19 October—has been working tirelessly not only to deter Shia voters from supporting pro-Iran blocs but also to brazenly influence the process of forming the next government. He has repeatedly made thinly veiled threats of imposing crippling sanctions. While praising Sudani for what he called guiding the country in the right direction, Savaya nevertheless underlined that the US expects the new Iraqi government to free Iraq from what he termed “malign external interference, including from Iran and its proxies.” His comments reflected Trump’s overriding policy priorities: ending Iraq’s energy-sector dependency on Iran and disentangling Iraq’s economy from Iran.
Apparently, such threats have backfired, as Iraqi voters increasingly perceived them as flagrant interference in Iraq’s sovereignty.
In the eyes of Trump, all his policy objectives in Iraq are unachievable without curbing Iranian influence, which has long been inextricably linked to the Popular Mobilisation Forces (PMF)—a government-controlled alliance of predominantly Shia, Iran-backed armed groups formed in response to Grand Ayatollah al-Sistani’s 2014 call to fight Daesh. Unsurprisingly, Trump’s principal focus has centred on aggressively pushing the Iraqi government to take practical steps to weaken the PMF.
Trump used the Gaza peace summit held in Sharm El-Sheikh on 13 October to send Baghdad—through Sudani—a stark message: “Iraq has so much oil they don’t know what to do with it,” calling it a “big problem.”
Trump ushered in his second term by undertaking a trip on 13 May to Saudi Arabia, Qatar, and the UAE, during which he boasted about gaining $5 trillion while also stressing—from Doha—that “Iran should seriously thank the Emir of Qatar, because there are others who want us to deal a hard blow to Iran, unlike Qatar.” This clearly indicated that both Riyadh and Abu Dhabi have pressed Trump to target Iran. Both Trump and Mohammed bin Salman (MBS)—Saudi Arabia’s de-facto ruler—are convinced that the Iran-led alliance has already been significantly weakened following the Israel–Iran direct confrontation, the overthrow of Assad’s regime in Syria, and Israel’s relentless attacks against Hezbollah in Lebanon, Hamas in Gaza, and the Houthis in Yemen.
As such, they have worked frantically to tighten the screw on the PMF, which has so far been spared any targeting despite participating in the strikes against Israel. Even though Sudani has sought to take credit for that, in reality this has largely been due to Trump’s profound fear that taking on the PMF would destabilise Iraq and lead to an uncontainable surge in oil prices.
Sudani has turned a blind eye to Trump and MBS’s growing alarm that no serious measures have been taken against the PMF. As a result, MBS sought to turn the tables on Sudani by dispatching, on 17 May, a low-level delegation to the Arab League Summit hosted in Baghdad, thereby sabotaging Sudani’s efforts to portray himself as an indispensable Arab leader.
As part of Trump’s campaign to intensify pressure on the PMF, US Secretary of State Marco Rubio successfully compelled the Iraqi government and parliament to ditch plans to pass a new PMF Commission Law, arguing that passing the legislation would bolster Iranian influence. Rubio followed that up in October 2025 by reminding Sudani of the “urgency of disarming Iran-backed militias that undermine Iraq’s sovereignty.”
With the voting over, the political wrangling between the blocs begins. Although Sudani’s bloc secured the largest number of seats—46—it has fallen woefully short of the overwhelming victory needed to avoid protracted and arduous negotiations to form a new government, let alone ensure a second term. Previous government-formation cycles have demonstrated that neither the number of seats won nor participation levels determine who becomes prime minister.
In Iraq’s power-sharing system, positions are distributed according to sectarian and ethnic backgrounds. The Shia nominate the prime minister, the Sunnis the Speaker of Parliament, and the Kurds the President. The toughest challenge is electing the President—requiring 220 votes—who then invites the largest bloc’s nominee to form the government.
To clinch the premiership requires surmounting four hurdles:
First, it is inconceivable to become prime minister without the ringing endorsement of the CF. Al-Sadr, who had 73 seats in 2021, attempted to circumvent the CF by forging an alliance with the largest Sunni and Kurdish blocs while marginalising his Shia rivals in the CF, but he spectacularly failed.
As anticipated, the CF components are expected to unify to form the largest bloc in parliament, paving the way for their nominee to become prime minister. The CF has vehemently opposed Sudani’s second-term bid, accusing him of consolidating power and marginalising them.
Second, the US has shown that it has the capability to block the candidacy of any prime minister who shifts the balance of power in Iran’s favour. Sudani has tried his utmost to placate CF opposition by highlighting that he is best placed to shore up the CF and safeguard the political process due to his credible relationship with Savaya.
Third, it is doubtless that Iran is hell-bent on entrenching its influence in Iraq despite being on the back foot elsewhere in the region. It has not shied away from vetoing the candidacy of any prime minister who imperils its interests.
Fourth, the Shia highest religious authority has rarely intervened in the selection of a prime minister, but when it does, its decision is decisive.
Against this backdrop, Iraq’s new prime minister must strike a delicate balance between US–Iran conflicting interests.
As things stand, Sudani’s prospects of securing a second term are incredibly limited—unless he can persuade Trump that US interests are better served by adopting a flexible rather than confrontational approach, instead of subverting Iraq’s elections by coercing Baghdad into the US–Saudi orbit away from Tehran. Clearly, such a scenario is far-fetched.
On that basis, Sudani had no option but to rejoin the CF on 18 October, making it highly likely that his bloc—consisting of seven incohesive groups—will unravel.
The CF’s unmistakable message to any prospective prime minister is clear:
“We are the kingmakers—and the kingbreakers.”
“We are the kingmakers—and the kingbreakers.”
Government advisor: Digitalization and increasing non-oil revenues are fundamental to financial reform.
The economic advisor to the Prime Minister, Mazhar Muhammad Saleh, confirmed that the Iraqi government is following a disciplined financial policy that relies on sound management of the deficit and rationalization of public spending, which has strengthened the confidence of the private sector and reduced the level of uncertainty that was one of the most prominent obstacles to local investment.Saleh told Al-Furat News that: “The impact of fiscal policy on the volume of local investments varies according to the nature of the sectors. While the energy sectors, especially oil, gas and renewable energies, have the largest share of investment flows due to their attractiveness and profitability, recent years have witnessed a clear shift towards investment in the construction and pharmaceutical industries, as local and foreign investors have begun to pay attention to the growing opportunities in these sectors.”
He added, "The impact of fiscal policy is varied; it is positive for large investment projects through relative financial stability, but it is more influential and effective with regard to small and medium-sized enterprises, as a joint incentive and financing approach has been adopted between fiscal and monetary policy."
Saleh pointed out that "the most prominent tools of this approach is the establishment of Riyada Bank as a mixed bank specializing in financing small and medium projects with the aim of mobilizing nearly sixty percent of the unemployed workforce through long-term, easy loans, as it is being established with the contribution of private Iraqi banks and with the direct supervision and support of the Central Bank."
He continued, "In addition to cooperation with specialized international organizations, this was accompanied by extensive initiatives to provide loans to young people and support individual and group projects under the direct supervision of the Prime Minister within the Youth Initiative."
Saleh explained that “the success of fiscal policy in reducing the deficit depends on achieving a delicate balance between sustaining macroeconomic stability and providing space for growth and investment. A disciplinary policy without a developmental vision may curb economic activity, while uncontrolled expansionary spending leads to a deepening of the deficit gap.”
He added, "Based on this, financial reform programs work to increase non-oil revenues by expanding customs and tax collection, modernizing legislation, and enhancing public financial digitization to reduce leakage and waste, raise collection efficiency, improve the business environment to encourage the private sector to expand and invest, and raise the efficiency of public spending by adopting performance evaluation standards and linking projects to economic feasibility."
Saleh concluded his statement by emphasizing that “the success of the current fiscal policy is based on combining fiscal discipline to ensure macroeconomic stability and developmental stimulus to expand the production base and encourage local investment. Digitalization, improving non-oil revenues, and enhancing private sector confidence are key pillars for strengthening public finances and achieving more sustainable economic growth in the short, medium, and long term.”
Saleh told Al-Furat News that: “The impact of fiscal policy on the volume of local investments varies according to the nature of the sectors. While the energy sectors, especially oil, gas and renewable energies, have the largest share of investment flows due to their attractiveness and profitability, recent years have witnessed a clear shift towards investment in the construction and pharmaceutical industries, as local and foreign investors have begun to pay attention to the growing opportunities in these sectors.”
He added, "The impact of fiscal policy is varied; it is positive for large investment projects through relative financial stability, but it is more influential and effective with regard to small and medium-sized enterprises, as a joint incentive and financing approach has been adopted between fiscal and monetary policy."
Saleh pointed out that "the most prominent tools of this approach is the establishment of Riyada Bank as a mixed bank specializing in financing small and medium projects with the aim of mobilizing nearly sixty percent of the unemployed workforce through long-term, easy loans, as it is being established with the contribution of private Iraqi banks and with the direct supervision and support of the Central Bank."
He continued, "In addition to cooperation with specialized international organizations, this was accompanied by extensive initiatives to provide loans to young people and support individual and group projects under the direct supervision of the Prime Minister within the Youth Initiative."
Saleh explained that “the success of fiscal policy in reducing the deficit depends on achieving a delicate balance between sustaining macroeconomic stability and providing space for growth and investment. A disciplinary policy without a developmental vision may curb economic activity, while uncontrolled expansionary spending leads to a deepening of the deficit gap.”
He added, "Based on this, financial reform programs work to increase non-oil revenues by expanding customs and tax collection, modernizing legislation, and enhancing public financial digitization to reduce leakage and waste, raise collection efficiency, improve the business environment to encourage the private sector to expand and invest, and raise the efficiency of public spending by adopting performance evaluation standards and linking projects to economic feasibility."
Saleh concluded his statement by emphasizing that “the success of the current fiscal policy is based on combining fiscal discipline to ensure macroeconomic stability and developmental stimulus to expand the production base and encourage local investment. Digitalization, improving non-oil revenues, and enhancing private sector confidence are key pillars for strengthening public finances and achieving more sustainable economic growth in the short, medium, and long term.”
The Central Bank of Iraq confirms the stability of the exchange rate and achieves the lowest inflation levels in the region.
As the end of 2025 approached, the Central Bank of Iraq announced that it had made tangible progress in its strategic objectives related to maintaining the stability of the general price level, as the inflation rate recorded a decrease to historically low levels that are the lowest in the region, supported by its monetary policies and well-considered measures despite the current economic challenges.
The Central Bank clarified in an official statement that the Central Bank Law No. (56) of 2004, particularly Article 1/4/A, clearly defines its core functions in formulating and implementing monetary policy, including exchange rate policy. In this context, the Bank affirmed that it has no intention of adjusting the exchange rate of the Iraqi dinar, in line with its central objective of ensuring price stability, an objective that has been successfully achieved in the past period.
The statement stressed that the central bank continues to support exchange rate stability, bolstered by ideal levels of foreign currency and gold reserves.
The Central Bank also confirmed that it continues to cover all banks’ requests for external reinforcement in US dollars and other foreign currencies such as the Chinese yuan, the Turkish lira, the Indian rupee, and the UAE dirham, as well as continuing to process bank card settlements and personal transfers through MoneyGram and Western Union, in addition to cash sales for travel purposes, noting that there is no pressure on current foreign reserves.
The statement noted that any external statements or opinions regarding changing the exchange rate of the Iraqi dinar do not reflect the position of the Central Bank, and represent speculations aimed at confusing the market, stirring up speculation, and affecting the stability of the national economy. Central Bank of Iraq,
Media Office,
November 24, 2025
The financial reform package supports domestic investment and stimulates the economy.
With a focus on reducing the deficit and increasing non-oil revenues, local investment in Iraq appears to be on the verge of a new phase of growth and prosperity, but the question remains about the sustainability of these policies.
The Prime Minister's economic advisor, Mazhar Muhammad Salih, affirmed that the Iraqi government is pursuing a disciplined fiscal policy that relies on sound management of the deficit and rationalization of public spending, which has strengthened the confidence of the private sector and reduced the level of uncertainty that was one of the most prominent obstacles to local investment.
Saleh said , “The impact of fiscal policy on the volume of local investments varies according to the nature of the sectors. While the energy sectors, especially oil, gas and renewable energies, have the largest share of investment flows due to their attractiveness and profitability, recent years have witnessed a clear shift towards investment in the construction and pharmaceutical industries, as local and foreign investors have begun to pay attention to the growing opportunities in these sectors.”
He added that “the impact of fiscal policy is varied; it is positive on large investment projects through relative financial stability, but it is more influential and effective with regard to small and medium-sized enterprises, as a joint incentive and financing approach has been adopted between fiscal and monetary policy.”
Media Office,
November 24, 2025
Establishment of Riyada Bank
Saleh pointed out that “the most prominent tools of this approach is the establishment of Riyada Bank as a mixed bank specializing in financing small and medium projects with the aim of mobilizing nearly sixty percent of the unemployed workforce through long-term, easy loans, as it is being established with the contribution of private Iraqi banks and with the direct supervision and support of the Central Bank.”
He then continued, “In addition to cooperation with specialized international organizations, there were also extensive initiatives to provide loans to young people and support individual and group projects under the direct supervision of the Prime Minister within the Youth Initiative.”
Saleh explained that “the success of fiscal policy in reducing the deficit depends on achieving a delicate balance between sustaining macroeconomic stability and providing space for growth and investment. A disciplinary policy without a developmental vision may curb economic activity, while uncontrolled expansionary spending leads to a deepening of the deficit gap.”
Increase in non-oil revenues
“Based on this, financial reform programs work to increase non-oil revenues by expanding customs and tax collection, modernizing legislation, and enhancing public financial digitization to reduce leakage and waste, raise collection efficiency, improve the business environment to encourage the private sector to expand and invest, and raise the efficiency of public spending by adopting performance evaluation standards and linking projects to economic feasibility,” he added.
Saleh concluded his statement by emphasizing that “the success of the current fiscal policy is based on combining fiscal discipline to ensure macroeconomic stability and developmental stimulus to expand the production base and encourage local investment. Digitalization, improving non-oil revenues, and enhancing private sector confidence are key pillars for strengthening public finances and achieving more sustainable economic growth in the short, medium, and long term.”
The exchange rate is at a crossroads: between rescue and painful inflation.
- Serious warnings are being raised about the exchange rate, as expert Abdul Rabbo points out that any decision to change it without real financial reforms will make the citizen the weakest link in the face of a comprehensive wave of inflation.
Economic and financial expert Ahmed Abdel Rabbo warned of the danger of the government or the central bank resorting to changing the dollar exchange rate to address the liquidity crisis or pay off debt, stressing that this option will have direct and harsh effects on the market and the citizen.
Abdul Rabbo said , “Talking about changing the dollar exchange rate to address the liquidity crisis or to pay off the debt is a very dangerous option for the Iraqi economy, because it will directly affect prices and weaken the purchasing power of the citizen, especially the poor. The exchange rate cannot be treated as a magic solution to financial crises. The rise of the dollar is not a cause in itself, but rather a result of economic and financial policies that need real and balanced reform.”
He added, “It is unfortunate that some media professionals are presenting this issue in a simplistic and misleading way, as if changing the price will solve all the problems, ignoring the inflationary effects that will affect food, medicine, and construction materials, as well as the pressure that will be placed on low-income families and the banking market. This type of media presentation creates a state of panic among people and increases speculation in the markets instead of calming them down.”
imported inflation
He added that “resorting to raising the exchange rate will immediately lead to imported inflation, exacerbate poverty, and disrupt economic activity. Any decision of this kind must be preceded by genuine financial reform, expansion of social safety nets, and a structural overhaul of the revenue and expenditure management file, instead of burdening the citizen with the cost of wrong policies.”
He concluded by saying: “We warn against reducing the crisis to the price of the dollar, and we call for a responsible economic discussion, far removed from media populism, that puts the interest of the citizen and the national economy above any other considerations.”
This warning comes amid escalating controversy in recent days over the possibility that the next government will resort to amending the official exchange rate, with experts estimating that raising the price of one hundred dollars could reach 180 or even 200 thousand dinars, in an attempt to address increasing financial pressures.
This controversy has sparked widespread public concern about the possibility of a new wave of inflation if such a decision is made, which the Central Bank denied in an official statement, stressing that external statements or opinions regarding changing the exchange rate of the dinar do not reflect the position of the Central Bank, and represent speculations aimed at confusing the market, inciting speculation, and affecting the stability of the national economy.
https://www.youtube.com/watch?
Member of the Central Bank's Media Office, Alaa Al-Fahd: The bank is not responsible for the announced dollar exchange rate and is working to limit it. (this is the title under the video on youtube?
:00
When can the Central Bank reduce this?
0:03
Gap and difference between the official rate and the rate
0:06
announced by the bank and the parallel market rate? Meaning now
0:09
We are facing two contradictory rates. A very valid question
0:13
And a very important one.
0:14
According to the Central Bank's foreign trade account,
0:17
It needs dollars, so it started to enter into
0:21
Correspondent transactions and cover transactions
0:24
related to trade
0:26
Even small and medium-sized traders and all
0:29
All foreign trade that needs dollars
0:32
Today, even in matters of travel and medical treatment Also
0:35
The Central Bank covered what exists today from
0:37
The price difference represents the demand for goods that enter
0:41
Iraq unofficially
0:43
and enter illegally through smuggling routes
0:47
And through demand, it is called unreal or unreal demand
0:51
Incorrect or does not constitute official demand, so this market
0:55
The parallel market cannot be controlled today, there is no
0:58
In any country in the world more than one exchange rate
1:00
The official exchange rate is known even in
1:02
Government transactions in financial dealings
1:05
The official rate announced by the bank's policy
1:08
The Central Bank, and what exists today in another rate, this is
1:11
not the responsibility of the Central Bank
No comments:
Post a Comment