Financial advisor: Fixing the exchange rate in the budget is a coordinating decision and enhances market stability.
The Prime Minister's financial advisor, Mazhar Muhammad Salih, stated that the exchange rate in Iraq is subject to a fixed official rate system based on integrated coordination between monetary and fiscal policy, and is not an arbitrary decision.
In an exclusive statement to Al-Mirbad, Salih explained that while the exchange rate is a tool of monetary policy, in practice it is the result of an agreement between the Ministry of Finance and the Central Bank of Iraq and is clearly stipulated in the annual budget.
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He added that the reported adoption of an exchange rate of 1,300 dinars per dollar in the 2026 budget represents a significant positive indicator that will contribute to strengthening stability, calming the market, and curbing speculation in the black market and parallel market.
He indicated that the Central Bank sent an official letter to the Ministry of Finance to establish this rate as a fixed element of the general budget, noting that setting the exchange rate is essential given that oil revenues constitute approximately 90 percent of public revenues, which are in foreign currency.
He confirmed that the rate currently in effect is the one announced, pending the finalization of the draft budget upon its official release and submission to Parliament for discussion and approval.
Analyst: Iraq faced an economic crisis last year that it postponed to 2026, which the new government will now have to contend with.
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Economic analyst Jalil Al-Lami revealed that Iraq did not approve an independent annual budget for 2025, but rather continued to operate according to the financial ceilings and final accounts of the three-year budget for the years 2023, 2024 and 2025, which means the absence of a budget that reflects the true economic reality of the country.
Al-Lami told Al-Mirbad that this approach provided the Iraqi government with the ability to continue securing salaries and operating expenses, but in return it restricted the state financially and prevented it from launching new projects or expanding investment spending, noting that the government is managing the economic crisis and not addressing its root causes.
He explained that Iraq faced a deep economic crisis during 2025 as a result of the decline in global oil prices and the decline in public revenues, which will push the state to postpone the financial crises to 2026, so that the new government will be confronted with them.
He explained that the delay in sending the 2026 budget to the House of Representatives since October 15, along with the political crises related to the selection of the President of the Republic, the formation of the government, and the ratification of the government program, will force the state to continue spending according to the 1/12 rule stipulated in the Financial Management Law No. 6 of 2019.
Al-Lami concluded by saying that continuing on this path will put Iraq in front of a scenario of accumulating financial pressure, a near-complete halt to projects, especially investment projects, and increased pressure on services without solutions that rise to the level of the economic crisis.
Al-Sudani: We are proceeding with the implementation of reform plans
Prime Minister Mohammed Shia' al-Sudani affirmed on Sunday his commitment to implementing reform and development plans and completing projects.
A statement from his media office, received by Al-Rabia, stated that "Al-Sudani received a group of members of the 'I Will Take My Right' movement to review developments in the country and the government's program for achieving development and economic progress."
He affirmed his commitment to "proceeding with the implementation of reform and development plans and completing projects," praising the movement's stances and its support for the process of construction and development, and its essential role as an important member and partner in the Reconstruction and Development Coalition.
The Prime Minister also stressed the importance of unity and strengthening partnership and cooperation among national forces, in order to expedite the completion of constitutional requirements and combine everyone's efforts to improve the living conditions and services for citizens to meet their aspirations and fulfill their needs.
Predictions regarding Savaya's plan: Closing all banks except for four... and targeting rebel factions.
The answer, according to initial indications, appears complex. Since assuming his post about three months ago, the US envoy has declared a hardline stance against groups cooperating with Tehran and armed factions. However, information circulating in Baghdad suggests the formation of a new relationship between Savaya and the "coordination framework" in its "disarmed" version, which anticipates his arrival as a potential partner in the coming phase.
During the height of the unusual US escalation against Iran, contacts described as "strange and rare" were recorded, involving Iraqi groups that had declared their disarmament attempting to mediate with Tehran for the release of Western detainees. Political sources say that this new relationship will have "scapegoats," namely the few remaining factions that refuse to disarm and relinquish their military and economic capabilities.
According to reports, the US envoy is expected to implement a package of decisions, exclusively published by Al-Mada newspaper last year, concerning the closure of most Iraqi banks, leaving only a limited number—no more than four to six—operating. This is part of a strict US campaign to combat money laundering and cut off Iranian funding sources.
Sources indicate that Savaya's rapid activity, since assuming his duties as special envoy to Iraq last November, stems from the presence of an "Iraqi team ready to cooperate." These sources, who requested anonymity, do not rule out that this activity is linked to the formation of the next government, pointing to signals from Nouri al-Maliki, leader of the State of Law Coalition and the leading candidate so far for prime minister, regarding openness to cooperation with Washington.
Four days ago, during his meeting with the US Chargé d'Affaires in Baghdad, Joshua Harris, Maliki emphasized the necessity of "monopolizing weapons in the hands of the state" and expressed Iraq's desire to "expand the partnership with the United States by activating the Strategic Framework Agreement," according to an official statement issued by his office.
Sources indicate that the "Coordination Framework" is prepared for full cooperation with Savaya on the issue of armed factions, leaving the choice of how to deal with groups refusing to disarm—whether through military force or economic activities—to the United States.While Washington escalated its threats against Tehran, brandishing "very strong" military options before later backing down, the Iraqi resistance factions in Baghdad were preoccupied with other types of conflicts, related to the distribution of positions in the upcoming government and shaping the post-disarmament phase.
For the first time in five years of US-Iranian tension, these groups do not appear poised for large-scale intervention in any potential US strike against Iran, except for limited actions. However, Kataib Hezbollah emerged alone with an escalatory tone, threatening to retaliate against any attack on Iran and describing war as "no picnic." This was followed by another, less well-known group called Saraya Awliya al-Dam (Brigades of the Guardians of Blood).
Four armed groups had previously announced their decision to disarm in exchange for being allowed political participation. All eyes are now on Savaya.Meanwhile, Savaya shuttled between the US Treasury and Defense Departments, coinciding with intensive diplomatic activity by the US chargé d'affaires in Baghdad, who met with most Iraqi leaders, including Maliki. Official statements from Washington and Baghdad indicate that the two main issues on the table are preventing the participation of armed factions in the next government and cutting off their funding sources and Iran's access to hard currency.
These statements reinforce what Iraqi sources suggest: that Savaya's mission will focus on implementing decisions related to the closure of at least 96 banks. Currently, 37 Iraqi banks are under US sanctions, with expectations that the number will rise to 69, amidst leaks about a US request to seal the banks shut, leaving only a limited number—between four and six—operating.
In this context, Savaya held a meeting on Friday at the White House with US Secretary of Defense Pete Hegseth and Director of Counterterrorism Sebastian Gorka to discuss the details of his upcoming visit to Iraq. In a statement, he said, “The issues discussed will be raised during the upcoming visit, in communication with decision-makers, in a way that serves the interests of the Iraqi people.”
Last Wednesday, US President Donald Trump praised his special envoy’s performance, saying he “did a fantastic job in Iraq.” Meanwhile, rumors continue to circulate in Baghdad that Savaya received five million dollars from Iraqi entities before assuming his duties, amid allegations of “buying American favor,” though these claims remain unconfirmed.
Independent politician and former MP Mithal al-Alusi expressed his pessimism regarding the US envoy’s mission, stating that Savaya and his team “are dealing with a failed state and politicians accused of corruption and crimes.” Speaking to Al-Mada, al-Alusi warned that the US demands for “a government without militias” and economic sanctions, while essentially Iraqi demands, could be used at the expense of the integrity of the political process. He pointed to recent worrying attempts, including US contacts with Iraqi factions to help secure the release of Westerners detained in Iran during the height of the escalation. He concludes by saying that ignoring the reform of the political process and the protection of freedoms means accepting a more chaotic Iraq, with the Americans content to manage the scene through the embassy, which portends further disintegration of the Iraqi state.
The Great Recession
Oil prices plummet and the dollar soars! "Austerity... fend for yourself!" A salary every 45 days: from rumor to reality
There is growing concern that Iraq is entering a critical financial phase, with escalating current spending and shrinking budgetary flexibility. This comes at a time when most families rely on government salaries as their almost sole source of income, making any disruption to state liquidity or the regularity of payments a direct threat to social and economic stability. Baghdad Today obtained testimonies from employees in several ministries who confirmed receiving their salaries approximately 45 days late. Meanwhile, private sector employees indicated that wage delays have exceeded 45 days in a number of companies, exacerbating fears of a widening crisis.
Economic expert Rashid Al-Saadi told Baghdad Today that “Iraq is going through a critical financial period that requires taking strict decisions to control public spending and maintain financial stability,” warning of “severe financial repercussions if the pressure on the budget continues without real solutions.”
The wage bill "swallows" the budget
Recent research reports indicate that wages and salaries alone consume more than 60% of total government spending, amounting to around 90 trillion dinars annually, which means that the largest portion of public money goes monthly to the salaries and pensions item at the expense of investment and service spending.
According to data from the Ministry of Labor and Social Affairs for 2025, there are about 4.5 million civil servants receiving monthly salaries, in addition to about 2.9 million civil and military retirees, bringing the total number of people dependent on monthly payments from the state to more than 7.4 million, which is more than 40% of the workforce, one of the highest rates among oil-exporting countries.
Al-Saadi warns that "the inflation of the payroll in this way makes any fluctuation in liquidity or revenues a direct blow to a wide segment of society," noting that "the current situation cannot tolerate further expansion in appointments or permanent commitments without a real reform of the spending structure."
almost complete dependence on oil
The overall economy still depends almost entirely on oil; oil revenues constitute about 90% of total government revenues, while the contribution of taxes, fees and non-oil revenues remains very limited in relation to the size of the budget.
Between 2022 and 2023, oil revenues fell by about 22% due to declining prices and production cuts under the OPEC+ agreements, in addition to the intermittent suspension of northern oil exports, which quickly translates into pressure on the budget and then on the salaries item and the deficit.
In this context, Al-Saadi emphasizes that “the almost complete dependence on oil makes Iraq vulnerable to any wave of price declines or disruption in exports,” noting that “the stability of salaries has become directly linked to the movement of the global market, and this in itself is a dangerous indicator of fragility.”
From surplus to deficit in two years
In light of this course, the government has taken a series of decisions in recent months that have been described as "austerity" or "belt-tightening," which, according to government sources, included reviewing high salaries and allowances for some special grades, reducing travel and conference expenses, postponing a number of major projects that are not of immediate priority, in addition to tightening control over spending in ministries and independent bodies.
International reports show that the financial surplus that Iraq recorded in 2022, at around 8.9% of GDP, turned into a deficit approaching 1.3% in 2023, due to an increase in spending of about 6.4% of GDP during a short period, with a significant expansion in salaries, pensions and operating expenses.
The same projections indicate that the deficit could widen in 2024 to about 7.6% of output if no real adjustments are made to the course of spending, primarily controlling the wage bill and redirecting resources from the current treasury to investment and basic services.
Here, observers point out that Al-Saadi’s warnings intersect with what the International Monetary Fund and the World Bank have been saying, that the priority in the Iraqi case is to “dry up” the inflation of the salary and current spending mass, and to re-engineer the budget in a way that reduces its sensitivity to fluctuations in oil prices, which means that the problem, as Al-Saadi describes it, “is not a problem of a month or two in paying salaries, but rather an unsustainable spending path.”
The increase in appointments in 2024-2025
In addition, research readings reveal that salary spending in 2024 reached approximately 60 trillion dinars, with estimates indicating that more than 1.1 million new employees were added to the payrolls in recent years (outside the Kurdistan Region), which sharply increased the wage bill.
This rapid expansion in appointments, which has often been accompanied by political and electoral considerations, opens the door to linking the financial file with the 2025 elections. According to economists, government jobs are often viewed as a "tool for political appeasement and ensuring loyalty," rather than as a response to a real administrative and economic need within state institutions.
Al-Saadi points out in his speech that “continuing to expand appointments without sustainable financial cover means deepening the problem instead of solving it,” adding that “every new job that is not well thought out today may turn into an additional burden on the budget in the coming years.”
From local warning to international "early alert"
Rashid Al-Saadi’s warnings coincide with the estimates of the International Monetary Fund and the World Bank, which warned in recent reports that the expansion of current spending, especially wages and pensions, has turned the financial surplus that Iraq recorded in 2022 into an accelerating deficit starting in 2023, with expectations that this deficit will widen in the coming years if the wage bill is not controlled and spending is not redirected towards investment and basic services.
Thus, Al-Saadi's observations do not appear to be merely an individual opinion, but rather part of a broader picture painted by international institutions regarding the fragility of the current financial model, which is based on a budget burdened by salaries and has a limited capacity to build a productive base and stable revenues. Al-Saadi himself emphasizes that "the government's recent decisions, however important, will remain of limited impact if they are not linked to a clear vision for restructuring spending over several years."
"A salary in exchange for stability": A political and social safety net
The figures showing that more than 7.4 million people rely on salaries and pensions as their monthly income effectively mean that the state operates the largest socio-political safety net in the country through payroll deductions. Any government that considers tampering with this network, whether through reductions or postponements, faces a high political and social cost.
According to recent research estimates, salaries, pensions, and cash subsidies now represent the largest monthly cash flow in the Iraqi market, making any disruption to them capable of causing a widespread shock in domestic demand and a chain reaction in rents, prices, and family debts.
Al-Saadi warns that “delaying or reducing salaries is no longer just a technical possibility in financial schedules, but a scenario with a high social cost,” stressing that “protecting social stability requires that those with privileges and the higher segments in the job ladder bear a larger part of the cost of reform, instead of transferring the burden of austerity to the ordinary employee.”
The salary crisis intersects with the Savaya trajectory, sanctions, and the dollar.
In the background, the internal financial file intersects with another equally sensitive track, related to the American tightening of the banking compliance file and dollar transfers, and talk of possible sanctions on Iraqi banks and companies within the framework of what US President Donald Trump’s envoy to Iraq, Mark Savaya, describes as pursuing “malicious actors” in the financial system.
Any further tightening of transfers or targeting of Iraqi financial institutions will increase the cost of financing trade and imports, putting pressure on the exchange rate, which will directly impact the prices of imported goods, especially food, medicine, and basic commodities. In an economy heavily reliant on imports, and with a society dependent on government salaries as a primary source of income, any fluctuation in the dollar or in financial flows becomes a double threat: salaries are at risk on one hand, and purchasing power is eroding on the other.
Economists believe that any new sanctions or financial tightening will “exacerbate the sensitivity of the salary issue that Al-Saadi is talking about,” because the increased cost of imports and the tightening of external financing conditions will affect prices and the exchange rate, “at a time when salaries represent the main source of income for broad segments of society, making any disruption in this issue a direct cause of social tension.”
"The difficult choice"... Who will bear the brunt of austerity measures?
When Al-Saadi talks about “controlling high salaries” and “austerity decisions,” a fundamental question arises about the direction of the scissors in the next stage: Will the treatments go to the high salaries and privileges, special grades, multiple salaries and political job networks, or will the burden fall again on the middle and junior employee through reducing allowances and allocations and delaying disbursement?
While international experts agree on the need to reduce the wage bill as a percentage of GDP, the nature of how the cost of this reduction is distributed remains the dividing line between a genuine financial reform path and an austerity path that reproduces the same imbalance at the expense of the weakest groups.
Al-Saadi concluded his remarks to “Baghdad Today” by stating that “the next stage will be a serious test of the will for reform,” adding that “the options presented today are not only related to how to bridge the deficit, but also to who will bear the cost of that, and whether the state will move towards confronting the sources of waste and large privileges, or will it go again to the easier path of making the employee and the ordinary citizen pay the price for the wrong policies that have accumulated for years.”
A memorandum of understanding was signed between the Development Fund for Iraq and BPI Bank France in Paris.
The Iraqi Embassy in Paris announced the signing of a memorandum of understanding between the Development Fund for Iraq and BPI France in the French capital.
In a statement received by the Iraqi News Agency (INA), the embassy said it participated in the signing ceremony, which was attended by Chargé d'Affaires ad interim, Minister Plenipotentiary Thaer Wahib Hussein. Hussein emphasized the importance of encouraging companies to enter the Iraqi market and take advantage of available investment opportunities, particularly in the productive and developmental sectors.
She added that "the Iraqi delegation participating in the signing was headed by the Chairman of the Iraq Development Fund, Mohammed Al-Najjar, while the French side was represented by the Director of European and International Affairs at the bank, Isabelle Pepier." She explained that "the memorandum of understanding aims to support sustainable economic growth, enhance employment opportunities, and increase the competitiveness of the Iraqi economy, in addition to encouraging innovation and development, through contributing to the financing of strategic projects within Iraq."
She continued, "This step comes within Iraq's efforts to strengthen economic and investment cooperation with France and open new horizons for development partnerships between the two sides."
Foreign Minister arrives in Tehran
The Foreign Ministry's media office stated in a statement received by Al-Furat News that "during the visit, the minister is scheduled to meet with the President of the Islamic Republic of Iran, Masoud Pezeshkian, the Speaker of the Islamic Consultative Assembly, Mohammad Bagher Ghalibaf, the Foreign Minister, Abbas Araqchi, and the Secretary of the Iranian Supreme National Security Council, Ali Larijani, in addition to a number of other Iranian officials."
He added that "the talks being conducted by Fuad Hussein will focus on discussing bilateral relations between the two countries, and addressing current regional developments and tensions in the region, in order to contribute to strengthening stability and supporting regional dialogue."
The Ministry of Finance is discussing the restructuring of Rafidain and Rasheed banks and the insurance sector.
Finance Minister Taif Sami chaired an expanded meeting at the ministry headquarters on Sunday, which included representatives from the global consulting and auditing firm Ernst &Fi Young, and was attended by advisors and a number of directors general in the ministry and government banks, to discuss steps to implement the comprehensive reform plan for financial institutions in Iraq.
During the meeting, the minister affirmed that “the Ministry of Finance is proceeding according to clear timetables for implementing the government program, stressing the importance of strengthening cooperation with international consulting institutions to ensure that the adopted procedures are aligned with global financial standards.”
The meeting witnessed “a detailed review of the completed work stages and progress rates in the restructuring of Al-Rafidain and Al-Rasheed banks, based on the recommendations of the advisory body, as well as discussing the procedures for establishing “Al-Rafidain First Bank” and updating the infrastructure of financial and information systems in the country.”
The attendees also discussed “the restructuring of the insurance sector, by following up on the remaining stages of merging the National and Iraqi Insurance Companies within the specified timeframes, with a focus on strengthening governance principles and adopting international financial reporting standards, which will contribute to raising the efficiency of financial performance and keeping pace with the requirements of the global market.”
The meeting also addressed the plan to “restructure the Industrial Bank and move towards contracting with a specialized consulting firm to implement the project, in conjunction with projects to automate financial systems and comprehensive digital transformation, aimed at improving operational efficiency and reducing the time taken to complete transactions.”
At the conclusion of the meeting, the Minister of Finance stressed the importance of continuing coordination with Ernst & Young to overcome technical challenges and build the capacities of national cadres, in order to ensure the sustainability of structural reforms and enhance financial stability in the country.
For their part, representatives of the consulting firm expressed their “full support for the steps taken by the Ministry of Finance, praising the seriousness shown by the government in modernizing financial and banking institutions, and confirming the continuation of technical support for the development of
financial and banking performance in Iraq.”
The Iraqi Ministry of Finance announces the implementation of decisions to maximize government revenues.
The Iraqi Ministry of Finance stressed on Sunday the importance of the accurate and unified implementation of the Cabinet and Ministerial Council for the Economy’s decisions to address the financial situation, which included reducing expenditures and maximizing revenues to support financial stability in line with the requirements of the current stage.
This came during an expanded meeting held by the Ministry of Finance for the Directors-General, which was dedicated to discussing the decisions of the Cabinet and the Ministerial Council for the Economy related to proposals for economic reforms and addressing the financial situation, in line with the requirements of the current stage and the priorities of the state’s financial policy.
According to a statement issued by the Ministry and received by Shafaq News Agency, the meeting addressed the axes of maximizing revenues and reducing expenditures, as they are fundamental pillars for supporting financial stability and enhancing the efficiency of public spending. The Cabinet Resolution No. (1083) of 2025 was discussed, which stipulated the adoption of automation in all government sectors and the transition to electronic collection, which contributes to raising the efficiency of financial collection, reducing waste, and enhancing transparency and governance.
The attendees also discussed the recommendation of the Ministerial Council for the Economy regarding reducing expenditures and maximizing revenues, which included stopping the calculation of certificates as of January 2, 2026, as well as stopping transfers to the ministries covered by the decision, within the framework of organizing human resources and controlling financial obligations.
In this context, the statement indicated that the Ministry reviewed its procedures related to organizing the human resources file, as it completed an accurate inventory of the number of its staff with higher degrees working within the Ministry’s headquarters, which amounted to (304) employees, in response to the directives of the Council of Ministers aimed at governing employee data, determining actual needs, as well as evaluating employees who obtained higher degrees and studying the possibility of benefiting from the experience they gained to contribute to the development and advancement of work.
The meeting addressed the directive to the General Authority for Free Zones to activate the re-export activity, based on the provisions of Article (123) of the Customs Law No. (23) of 1984 amended, due to the active role of this activity in stimulating trade and maximizing non-oil revenues.
The attendees also discussed Cabinet Resolution No. (11) of 2026, which authorizes ministries and entities not affiliated with a ministry to sell all vehicles (except production vehicles) that are (15) years old or more, in accordance with the provisions of the Law on the Sale and Lease of State Assets No. (21) of 2013, as amended, in a way that contributes to reducing operational burdens and achieving additional financial resources.
The meeting also addressed the Cabinet’s decision to reduce spending, which included halting all foreign delegations and relying on virtual meetings as an effective alternative to meet training and development requirements, thereby achieving cost-cutting without compromising capacity-building programs.
Those present stressed the importance of the accurate and unified implementation of these decisions, and the need to coordinate efforts between all departments and formations, in order to ensure the achievement of the desired goals, and to support the path of financial and administrative reform, in line with the government’s directions in promoting financial sustainability and digital transformation.
Since the beginning of 2026, Iraq has been experiencing unprecedented financial pressures due to the decline in global oil prices and the escalating current obligations for public expenditures, especially the salaries of employees and retirees.
According to previous reports by Shafaq News Agency, officials and experts estimate that the almost complete dependence on oil makes Iraq’s public finances extremely sensitive to any external fluctuations, putting economic stability to a real test.
Official financial data reveals the magnitude of this challenge, as the Eco Iraq Observatory indicated that the financial deficit up to October 2025 amounted to 24 trillion and 680 billion dinars, while current expenditures constitute about 75% of public spending.
The observatory explained in a statement on Saturday that total non-oil revenues did not exceed 10 trillion dinars out of 103 trillion dinars, while oil revenues accounted for approximately 93 trillion.
Current expenditures allocated to salaries and services amounted to approximately 96 trillion dinars, equivalent to 90% of total expenditures, according to official data from the Central Bank of Iraq.
The Iraqi government, headed by outgoing Prime Minister Mohammed Shia al-Sudani, began taking practical steps to reduce the financial deficit, including selling old government vehicles and equipment, reducing fuel rations by 50%, and stopping the calculation of additional academic certificates for employees starting from the beginning of January 2026, and adopting the certificate with which they were first appointed as the sole reference for salaries and promotions.
Observers estimate that these measures could save about $2 billion annually, while others see them as secondary steps that are insufficient on their own to bridge the large financial deficit gap, stressing that the solution requires radical reforms in the structure of public spending, controlling the allocations of senior officials, doubling non-oil revenues, and building flexible financial instruments that protect living stability.
Hassan Ali Al-Daghari: Investment is a fundamental pillar in building the Iraqi economy.
Spokesperson Hassan Ali Al-Daghari affirmed that investment is a cornerstone of building the Iraqi economy and enhancing its capacity to achieve sustainable development. He pointed out that the current phase necessitates creating an attractive environment for both local and foreign capital.
Al-Daghari stated that supporting investment projects contributes to revitalizing various productive sectors, providing genuine job opportunities, and playing a vital role in stimulating the economy and reducing reliance on single resources.
He clarified that investment is not limited to the financial aspect alone, but also encompasses the transfer of expertise and technology and the development of infrastructure.
Al-Daghari emphasized the need to simplify administrative procedures and ensure legislative stability, thereby bolstering investor confidence and encouraging the expansion of the investment base in the country. He noted that achieving economic development requires concerted efforts between the public and private sectors to build a strong economy capable of confronting challenges.
Iranian President to Foreign Minister: Relations with Iraq will remain strong and continuous in the future
On Sunday evening (January 18, 2026), Iranian President Masoud Pezeshkian, during his meeting with Foreign Minister Fuad Hussein, emphasized the deep and heartfelt emotional ties between the Iranian and Iraqi peoples, considering them the solid foundation of the historical relations between the two countries.
During the meeting, Pezeshkian affirmed, according to a statement from his media office translated by "Baghdad Today," that "these relations will remain continuous and strong in the future."
He pointed to the diverse cooperation between Iran and Iraq in the economic, political, cultural and scientific fields, citing the holding of meetings of governors from the border provinces between the two countries as one of the constructive initiatives to promote cooperation and joint development.
He added that "joint projects between the two countries have been implemented seriously and diligently since he took office, with the aim of raising the level of interaction between Iran, Iraq and all countries in the region."
Regarding the regional situation, the Iranian president pointed out the destructive and destabilizing role played by the United States and Israel with the aim of creating division among Islamic countries.
He explained that political, economic, and media pressures have not affected Iran's policy of maintaining internal unity and strengthening trust and cooperation with Islamic countries and the regional neighborhood.
Pezeshkian also reviewed the recent events in Iran and considered them a joint project of the United States and Israel to exploit the situation to create chaos and violence against the Iranian people, stressing that no threats will affect Iran's historical course.
The Iranian president said, "If we, as a Muslim nation, stand united, no power will be able to threaten us, and with God's help, we will continue this honorable path together."
For his part, Foreign Minister Fuad Hussein expressed his pleasure at meeting the Iranian president, conveying the greetings of the Iraqi president and prime minister to the Iranian government and people.
Hussein stressed that Iraqi officials have been following recent events in Iran closely and with the utmost attention, focusing on Iran’s security as part of the security of Iraq and the entire region.
The Iraqi minister stressed the deep historical and popular relations between Iran and Iraq, emphasizing that the two peoples are steadfast and deeply rooted despite the many events and changes that have occurred throughout history.
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Trump: It's time to look for new leadership in Iran
On Saturday, US President Donald Trump called for an end to the 37-year rule of Iranian Supreme Leader Ali Khamenei, asserting that "the time has come" for that.
Trump told Politico, as reported by Shafaq News Agency, that "the time has come to look for new leadership in Iran."
Trump commented on Khamenei's posts, saying that he is "guilty of the total destruction of his country," adding that "what he has done as a leader is the total destruction of the country and the use of violence at unprecedented levels."
He explained that "keeping the country running, even at a very low level, requires the leadership to focus on running the country properly, as I do with the United States, and not killing thousands of people to maintain control."
Trump continued, saying that "leadership is based on respect, not fear and death," considering that "this man is sick and must run his country properly and stop killing people," adding that "his country has become the worst place to live in the world because of bad leadership," as he put it.
Earlier today, Iranian Supreme Leader Ayatollah Ali Khamenei held US President Donald Trump responsible for the casualties during the protests in Iran.
In a speech, Khamenei said that "the American president is a criminal because of the human losses and material damage he caused in the country."
Khamenei has repeatedly criticized Trump for his supportive stance towards Iranian protests and his encouragement of "occupying state institutions," and has also described him as a tyrant, according to him.
Meanwhile, the HRANA organization reported today that more than 3,000 people have been killed in the protests sweeping Iran, while a "very slight increase" in internet activity in the country was recorded after an eight-day blackout.
The protests erupted on December 28 over economic woes and evolved into widespread demonstrations demanding an end to clerical rule in the Islamic Republic, culminating in widespread violence late last week.
The Iraqi army takes full control of Ain al-Asad base after the American withdrawal.
The Ministry stated in a statement, a copy of which was received by Al-Furat News, that: “The Chief of Staff of the Army, Lieutenant General Abdul Amir Rashid Yarallah, today supervised the distribution of tasks and duties to the military units and formations at Ain al-Assad base, after the withdrawal of the American forces from it and the Iraqi army taking over the management of the base in full.”
He added, "Yarallah was accompanied during the visit by the Deputy Chief of Staff of the Army for Operations, the commanders of the (land, air, and army aviation) forces, the Deputy Director of Military Intelligence, the Head of the Security Media Cell, the Director of the Sample Branch, and the Director of the Media Branch. They were received by the Commander of Al-Jazira Operations, the Base Commander, and the Commander of the Second Special Forces Division."
Upon his arrival, Yarallah, according to the statement, followed up on the stages of receiving the security file through his field supervision of the distribution of units and formations within the base, represented by the 65th Special Forces Brigade and its regiments, in addition to the distribution of the headquarters of the Air Force and Army Aviation Commands.
Yarallah also inspected all parts of the base with the aim of securing service facilities, infrastructure, and administrative and logistical aspects, in order to ensure raising the level of readiness to carry out the assigned duties in the best possible way.
In the same context, Yarallah directed the relevant authorities at the base to "intensify efforts and enhance joint work, coordination and cooperation between all units holding the base, and to take advantage of its capabilities and vital location," stressing "the need to work as one team and distribute tasks in a way that ensures the security and protection of Ain al-Assad base, as it is one of the most important military bases within the area of responsibility."
On Trump's orders, Savaya is in Baghdad: "Complete compliance or total eradication."
With news of the arrival of US President Donald Trump’s envoy to Iraq, Mark Savaya, today or tomorrow in Baghdad, carrying a “booby-trapped briefcase” of files, sanctions, and what Washington calls “hard gifts,” attention is turning to one of the most complex issues in the Iraqi economy: money smuggling networks, money laundering, and the circulation of hard currency outside legal channels, amid anticipation of the extent of the targeting that may extend to banks, companies, businessmen, and networks linked to armed factions, and what impact this step may have on the stability of the economy, the exchange rate, and the balance of political power internally.
Savaya: An envoy speaking "the language of numbers"
Mark Savaya, an Iraqi-American businessman of Chaldean origin, has served as the US Special Envoy to Iraq since October 2025, with authority directly linking the Iraqi file to the White House. In recent days, he held a series of meetings in Washington, including with US Secretary of Defense Pete Hagseth and the Director of Counterterrorism, before proceeding to the US Treasury Department, where he announced an agreement on a "comprehensive review" of payment records and financial transactions linked to institutions, companies, and individuals in Iraq whose names are associated with smuggling, money laundering, and fraudulent contracts and projects.
Economic and financial expert Ahmed Al-Tamimi believes that this course "reflects an escalating American trend to tighten pressure tools in the near future," explaining to "Baghdad Today" that Washington presents these steps as part of "attempts to protect the international financial system and prevent its exploitation in money laundering operations and financing illegal activities."
From dollar restrictions to selective sanctions
Over the past few years, the United States has tightened restrictions on Iraqi banks' access to dollars through the foreign exchange platform and their dealings with the Federal Reserve Bank of New York. This has resulted in limiting the transactions of several private banks and prohibiting others from using dollars, ostensibly to curb currency smuggling abroad. This context makes the new threat brandished by Savaya an extension of an existing pattern, but one more specifically targeting individuals, companies, and networks.
Al-Tamimi explains one aspect of the nature of the potential sanctions, indicating that "the package may include freezing assets, restrictions on bank transfers, and a ban on dealing with financial institutions and companies suspected of involvement in serious violations," which means that some economic entities may suddenly find themselves outside the network of international transactions, or under strict scrutiny that raises the cost of any external activity for them.
Who is the likely target?
Despite the absence of publicly announced regulations so far, the pattern of US sanctions in similar cases allows for an initial outline of the categories likely to be targeted:
- Banks and money exchange companies whose names frequently appear in compliance and money laundering reports, or which have been linked to dollar transfers that were blocked in the past.
- Front companies in the contracting, equipment, and general trading sectors, operating as cover for government contracts or the supply of essential goods, with suspicions that "margins" are being paid to political entities or armed factions.
- Businessmen and financial intermediaries managing a complex network of cross-border transfers and contracts, particularly with countries subject to sanctions or strict monitoring.
- Entities linked to armed factions that are designated or quasi-designated on sanctions lists, whether through security companies, associations, or commercial and media fronts.
In this context, Al-Tamimi points out that "the message is not directed only at the names that will be placed on the list, but at the wider circle around them," because any businessman, bank or company that gets close to this circle will find himself under the microscope of international compliance systems, even if his name is not directly mentioned in the sanctions decisions.
How will Iraq's economy be affected?
Economically, the effects of sanctions are not limited to freezing an account here or banning a bank there; they extend to the image of the Iraqi market as a whole in the eyes of correspondent banks and investors. Al-Tamimi warns that "any expansion of the scope of sanctions will practically lead to even stricter measures by foreign banks, which may resort to what is called 'excessive compliance,' meaning refraining from dealing with Iraqi entities simply for fear of being sanctioned."
This rigidity is reflected in three main ways:
- Increased cost of remittances and foreign trade: The higher the risk factor in dealing with Iraq, the higher the commissions and processing times for remittances, and some transactions may even be rejected outright.
- Additional pressure on the exchange rate: If the flow of official dollars declines, or the number of restricted banks expands, reliance on the parallel market will increase, threatening to erode citizens' purchasing power and widen the gap between the official and parallel exchange rates.
- Slowdown in investments and major projects: International companies will reconsider their plans, especially in sectors where government contracts involve local entities subject to sanctions or suspicion.
The citizen at the heart of the storm: from the dollar to prices
Although sanctions are legally framed as being "targeted" at specific individuals and entities, experience in Iraq, Iran, and Syria over the past years shows that ordinary citizens often bear the brunt of the impact. Al-Tamimi explains that "any disruption to the flow of dollars or tightening of transfers is quickly reflected in the prices of imported goods, from food to medicine and construction materials, because the Iraqi economy is highly dependent on imports."
As costs rise for banks and companies, the burden is gradually passed on to the end consumer through:
- Increased prices for goods and services.
- Reduced job opportunities in sectors affected by sanctions or banking restrictions.
- Restricted access to loans and financing, especially for small and medium-sized enterprises.
In this sense, how the government manages this issue becomes a crucial factor in mitigating the impact of sanctions on the public: the more organized alternatives for trade and finance are available, and the more the parallel market is controlled and monopolies are prevented, the less able speculators are to turn sanctions into an opportunity to profit at the expense of the citizen.
Will politicians be affected and will the equation be disrupted?
Politically, sanctions of this kind have the potential to rearrange some of the balance of power within the Iraqi political system:
Political blocs whose power is largely derived from money may face restrictions on their traditional funding networks, limiting their ability to manage election campaigns, buy loyalties, or finance media and service-oriented outlets.
Some politicians linked to businessmen or banks subject to sanctions may find themselves facing two equally unpalatable options: either attempting to distance themselves from these networks or engaging in a political and media confrontation with Washington, with all the domestic and international costs that entails.
Other forces may exploit the sanctions to present themselves as "less costly" to the West, through reformist rhetoric and promises of financial compliance, thus adding an external dimension to the internal competition.
Conversely, some factions are attempting to downplay the threats from Savaya, with some of their rhetoric even resorting to mockery of any political or economic entity that seriously addresses the sanctions issue or tries to open channels of understanding with it, going so far as to issue veiled threats against anyone who "cooperates" with the American approach. These messages may discourage some actors from pursuing financial reform, but they do not negate the fact that the sanctions are imposed from abroad, and their cost will affect everyone to varying degrees.
Two parallel paths: sanctions and "surgical" strikes
Another significant indicator, not lost on observers, is the arrangement of Savaya's meetings in Washington: the Treasury Department on one hand, and the Department of Defense on the other. This arrangement, in the view of many, reflects two parallel approaches within the Trump administration's thinking regarding Iraq and the region.
- A financial and punitive track led by the Treasury Department, through reviewing records, tightening compliance, and imposing sanctions on individuals and entities. -
A "surgical" security and military track remains available as a backup option, based on targeted strikes against objectives classified as a direct threat to US interests or those of its partners.
This is a path Iraq has witnessed in recent years through drone strikes or precision missile attacks targeting leaders and positions of armed factions. The difference this time, according to political assessments, lies in Savaya's position itself; he is presented in political circles as Trump's personal envoy, with whom he has a close relationship and a shared business background. This means that his political mandate may be broader than that of a traditional envoy, and that his recommendations on the issues of sanctions and "surgical" strikes will be closer to the decision-making circle in the White House.
Ahmed Al-Tamimi warns that “combining financial and security tools raises the level of risks; if sanctions alone do not bring about the desired change from Washington’s point of view, the appetite for using other tools may increase, and Iraq has experienced this equation more than once.”
A test of the will for reform before it is a conflict with Washington
Ultimately, the "Safaya sanctions" issue is not simply a bilateral conflict between Baghdad and Washington, but rather reveals an internal test of the will for reform in Iraq:
If the government acts swiftly to cleanse the financial system, tighten oversight of banks and companies, and protect the exchange market from speculation, some of the pressure can be contained and transformed into an opportunity to rebuild confidence.
However, if the threat is treated as "merely a passing political maneuver," met only with denials or verbal escalation, Iraq may find itself facing a broader package of sanctions, where the interests of the White House intersect with regional agendas, while the average citizen bears the brunt of the cost at exchange bureaus and on market shelves.
Between these two paths, Washington and its allies will be watching events unfold, just as the Iraqi public is watching the exchange rate, the cost of living, and job opportunities. The difference is that the former possesses the tools of sanctions and "surgery," while the latter can only wait for the results of the numbers game and the decisions made far from its grasp, only to discover later whether it alone will bear the brunt of it, or whether genuine reform will finally begin from within before being imposed from the outside.
Today or tomorrow
Loaded with a "bag of explosives" containing files, sanctions, and gifts... a Savaya plane takes off from Washington to Baghdad
Former MP Baqir al-Saadi predicted on Saturday (January 17, 2026) that a representative of US President Donald Trump would arrive in Baghdad the following day, noting that the visit would include high-level political and governmental meetings to learn about the agenda coming from the White House.
Al-Saadi told Baghdad Today, “According to the information we have, the US President’s representative in Iraq, Mark Savaya, will arrive in Baghdad tomorrow,” noting that “he is likely to hold meetings with political and governmental figures to learn about the nature of the agenda he carries from the White House.”
He added that “whether or not Trump’s representative arrives will not affect the course of forming the government, as the efforts are proceeding according to an Iraqi-Iraqi principle,” expecting that “the coordination framework will decide, this evening, on proceeding towards announcing its candidate for the next government.”
At the same time, a source told the Saudi website "Al-Sharq" that the US President's Special Envoy to Iraq, Mark Savaya, will arrive in Baghdad on an official visit dedicated to discussing sensitive security and financial issues, amid increasing talk of new US sanctions targeting Iraqi figures and entities.
According to the source, Savaya held a series of meetings at the White House in recent days, including with US Secretary of Defense Pete Hegseth and the Director of Counterterrorism, and then moved on to meetings with officials at the US Treasury Department to discuss tightening financial governance in Iraq, combating money laundering and currency smuggling, with a focus on pursuing "malicious actors" who exploit the Iraqi financial system.
The source indicated that Savaya confirmed in his last tweet on the X platform that there are upcoming sanctions on individuals and entities involved in exploiting the Iraqi financial system or supporting activities that threaten the country's stability, explaining that the last meeting he held before moving towards Baghdad was with Secretary of War Hegseth, to discuss security coordination and the position of US forces within the new strategy towards Iraq.
He indicated that Savaya’s agenda in Baghdad will include meetings with senior Iraqi government officials to discuss the future of security cooperation, the issue of weapons outside the state’s control, as well as discussing restrictions on dollar transactions and the mechanisms required by the US Treasury to ensure transparency in transfers and prevent their use in smuggling or financing armed groups, at a time when the financial relationship between Baghdad and Washington is undergoing a comprehensive reassessment.
Eco Iraq: The financial deficit has exceeded 24 trillion and revenues do not cover salaries.
The Eco Iraq Observatory announced on Saturday that the financial deficit up to last October amounted to 24 trillion and 680 billion dinars, while noting that current expenditures, such as salaries and the provision of services, constitute 75% of public spending.
According to a statement from the Observatory, received by Shafaq News Agency, the state's financial deficit is increasing monthly due to the decline in oil prices and the large amount of public spending. The statement indicated that "until October 2025, the deficit reached 24,680,555,254,693 Iraqi dinars," explaining that "financial revenues amounted to about 103 trillion dinars, including non-oil revenues that did not exceed 10 trillion."
According to the observatory, the total state revenues up to October 2025 amounted to: 103,514,200,991,817 dinars, including non-oil revenues from imposing taxes, customs tariffs and fees: 10,316,748,440,669 dinars, and oil revenues, which include the sale of crude oil, oil derivatives and licensing rounds: 93,197,452,551,148 dinars.
He pointed out that “the total state expenditures for the same month amounted to 128,194,756,246,510 dinars, of which 90% were current expenditures of about 96 trillion and 378 billion, allocated to salaries and the provision of services,” adding that “addressing the financial deficit requires strengthening non-oil revenues through improving tax collection and expanding the customs tariff base, in addition to controlling current expenditures and improving the efficiency of public services.”
Political analyst Ramadan al-Badran: Washington has begun implementing its plans to impose sanctions against banks affiliated with "militia groups."
https://www.youtube.com/watch?v=XFMsgMNPNmY
discussing US Special Envoy Mark Savaya's agenda in Iraq. The discussion covers two main US programs: disarmament of armed factions (militias) and financial/corruption reforms via the US Treasury.Natural, conversational English translation (preserving the spoken flow and Iraqi dialect nuances):
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