Iraqi Dinar Weakens Amid Washington’s Political Pressure; Gold Surpasses $5,100/oz
The Iraqi dinar weakened to 151,500 per $100 amid U.S. political pressure, while global gold prices hit a historic record, surpassing $5,100 per ounce due to geopolitical risks.
The Iraqi dinar experienced a sharp decline in value against the U.S. dollar on Monday, fueled by a convergence of tightened electronic transfer regulations and escalating diplomatic pressure from Washington regarding the composition of Iraq’s next government.
The video for this My FX Buddies Blog is below here:
The domestic currency volatility coincided with a historic surge in global commodities markets, where the price of gold surpassed $5,100 per ounce for the first time in recorded history, signaling a period of acute economic and geopolitical uncertainty.
Kaifi Mohammed, the spokesperson for the currency exchange market in the Kurdistan Region, stated on Monday, Jan. 26, 2026, that market stability has been directly undermined by a series of technical and political interventions.
According to Mohammed, the exchange rate for $100 reached 151,500 Iraqi dinars by midday, but he cautioned that the rate is unlikely to remain stable at its current level. Market projections suggest the currency could weaken further to 153,000 dinars per $100 in the coming hours as demand for foreign currency outstrips available supply.
Mohammed identified three primary catalysts for the dinar’s depreciation. He noted that procedures on the official currency transfer platform have been significantly tightened, creating a bottleneck that prevents merchants from obtaining the dollars necessary to conduct international trade.
This administrative friction is compounded by a hardening U.S. policy toward Baghdad. Washington has reportedly intensified its demands for the removal of militias from state decision-making centers, a move that has introduced a high degree of unpredictability into the local financial system.
Furthermore, Mohammed pointed to a broader shift in U.S. foreign policy under the Trump administration, which he characterized as increasingly transactional. He noted that Washington appears to be linking regional security and protection to direct financial payments, a stance that market participants view as a business-centric approach to geopolitics.
This perceived shift has led to increased anxiety among Iraqi merchants who, burdened by existing financial obligations and debts, have been forced to purchase dollars at prevailing market rates regardless of the cost, thereby driving the price higher.
The domestic currency strain is unfolding against the backdrop of an unprecedented rally in the global gold market. At the start of trading on the London Stock Exchange on Monday morning, the price of an ounce of gold breached the $5,000 threshold for the first time.
The metal’s ascent continued rapidly, rising by 2 percent to reach $5,093 before eventually settling above the $5,100 mark. Financial analysts noted that the speed of the increase is significant; gold first broke the $2,000 barrier in January 2024, and has more than doubled in value in the two years since.
Economic experts cited by market observers attribute the record-breaking gold prices to three main drivers: a sharp increase in geopolitical risks across multiple global regions, sustained and large-scale bullion purchases by central banks, and market expectations that the U.S. Federal Reserve will continue to lower interest rates.
The convergence of these factors has reinforced gold's status as a primary haven for investors seeking to hedge against currency devaluations and political instability.
The local and global economic fluctuations are deeply intertwined with the deteriorating diplomatic relationship between Baghdad and Washington.
Abbas Jibouri, head of the Baghdad-based Rafid Center for Political and Strategic Studies, warned on Sunday that Iraq has reached a "dangerous crossroads."
Jibouri noted that U.S. threats to restrict Iraq’s access to its own oil revenues—which are deposited in the Federal Reserve Bank of New York—represent a potent economic pressure tool that could trigger a systemic "salary shock" and broad financial sanctions.
Because oil revenues account for more than 90 percent of Iraq’s state income, any disruption to the flow of dollars from the United States would have immediate and devastating consequences for public sector salaries and infrastructure projects.
Jibouri argued that the United States is increasingly viewing Iraqi governance through a security lens, particularly concerning the participation of armed groups in the next cabinet. He warned that any steps toward "legalizing weapons outside the framework of the state" could prompt Washington to freeze assets or impose severe banking restrictions.
This assessment is supported by recent reports from the Associated Press, which indicated that the United States has begun a strategy that observers describe as "economic suffocation" or "dollar starvation."
According to the report, Washington is leveraging its recent access to Venezuelan oil to manage global energy markets. By reintroducing Venezuelan exports to the world stage, the U.S. administration believes it can mitigate price spikes even if Iraqi exports are disrupted by financial sanctions.
This suggests that the U.S. is now positioned to impose comprehensive sanctions on the Iraqi government itself rather than just targeting specific individuals or institutions.
The threat of economic isolation looms large as Iraqi political forces deliberate the formation of the next government. U.S. officials have explicitly warned that the inclusion of armed factions opposed by Washington in the next cabinet would likely trigger a suspension of dollar transactions.
Despite these repeated warnings, several groups and individuals the U.S. deems problematic have already secured, or are expected to secure, senior positions in the government.
Jibouri urged Iraqi political leaders to recognize that economic stability is now inseparable from political and security stability.
He argued that the only solution to the looming crisis is for Baghdad to adopt a governance model that consolidates the monopoly of force under state institutions and reassures international partners that the government will remain independent of external regional influences.
Failure to achieve this balance, he warned, would place the heaviest burden on ordinary Iraqi citizens, who are already feeling the impact of the dinar’s fall and the rising cost of living.
As of late Monday, merchants in Erbil and Baghdad remained in a state of high alert, monitoring the currency exchanges for further signs of depreciation.
The historic high in gold prices serves as a global indicator of the same fears driving the local market: a world defined by intensifying power rivalries and a diminishing reliance on traditional rules of international cooperation.
Savaya met with leaders of the Coordination Framework and delivered Trump's message to them... Amer Al-Fayez reveals the behind-the-scenes details of the meeting
Even though this is an article it feels very hearsay ish to me hahaha
leader in the Coordination Framework and head of the Design Bloc, Amer Al-Fayez, revealed that Trump’s envoy, Mark Savaya, met with the framework’s leaders individually, noting that he delivered clear messages to them about the Trump administration’s refusal to grant any high-ranking position in the government and parliament to figures affiliated with one of the Iraqi factions.
The winner's remarks coincided with a call made by US Secretary of State Marco Rubio to caretaker Prime Minister Mohammed Shia al-Sudani, during which he informed him of Washington's rejection of the formation of a government dominated by Iran.
The winner said in a televised interview with colleague “Samer Jawad”, which was followed by “Al-Alam Al-Jadeed” (January 25, 2026), that “the envoy of the American President, Mark Savaya, conveyed a written message in English as a representative of Trump, which included the American government’s disapproval of the presence of armed factions or the like, and therefore its rejection of one of them assuming the position of Deputy Speaker of the House of Representatives.”
He added that Savaya “conveyed this message to some of the framework leaders individually, meeting with each one separately and explaining its contents to them over the past two days before he left.”
The winner explained that the coordination framework confirmed that “this matter is not within their (the Americans’) rights, as we are a fully sovereign and independent state, and this is an internal matter,” noting that “the message included an objection to the deputy speaker of parliament being from the factions.”
The head of the parliamentary design bloc warned that “the coordination framework will form a delegation or send a counter-message to inquire about the reason for the objection, given that the position of Deputy Speaker of Parliament is a civilian position.”
The winner suggested that “the Asa’ib Ahl al-Haq movement may not participate in the next government due to regional developments, and not out of a desire to move towards the opposition,” denying that Iraq had received “any official threat from Washington regarding cutting off the dollar.”
Meanwhile, a statement from the US State Department, seen by Al-Alam Al-Jadeed, indicated that US Secretary of State Marco Rubio, in a phone call with Prime Minister Mohammed Shia Al-Sudani late Sunday evening (January 25, 2026), affirmed that “any government in Iraq controlled by Iran cannot succeed in putting Iraq’s interests first, keeping Iraq out of regional conflicts, or promoting a mutually beneficial partnership between the United States and Iraq.”
The ministry noted in its statement that “the two sides discussed the transfer and detention of ISIS detainees in secure facilities in Iraq following the recent instability in northeastern Syria.”
She added that “the two sides also discussed ongoing diplomatic efforts to ensure the swift release of foreign nationals detained on suspicion of joining or being affiliated with ISIS from Iraq and their delivery to justice.”
Politician Izzat al-Shabandar said in a statement (January 24, 2026) that “Iraq is going through a very difficult phase in light of international changes and the return of Donald Trump to the forefront of American decision-making,” calling for the need to deal realistically and absorb pressures with the Trump administration, and to be cautious and flexible in dealing with the American envoy Savaya, who, according to him, carries unpleasant tidings.
The British Financial Times newspaper published a report on January 22, 2025, stating that the US Embassy in Iraq had requested the replacement of the First Deputy Speaker of Parliament, Adnan Faihan.
The concern over Adnan Faihan assuming the position stems from his affiliation with the Sadiqun bloc, the political wing of the Asaib Ahl al-Haq movement, a faction that Washington includes on its sanctions lists. He pointed out that Washington has threatened to cut off dollar supplies to Iraq or cause a financial crisis if the influence of Iranian-backed factions continues in sensitive state institutions.
US envoy Mark Savaya warned in a post on “X” on January 21, 2026, that corruption represents the greatest danger to the future of Iraq, stressing that no real reform can succeed without confronting it firmly, while emphasizing that complex corruption networks finance and protect “militias”, making their dismantling an essential step to restore stability and sovereignty.
Sources close to the Coordination Framework revealed to Al-Alam Al-Jadeed on January 18, 2026, that the US envoy to Iraq, Mark Savaya, had begun interfering in consultations to form the new government, particularly in the selection of ministers for sovereign ministries. They explained that this interference was being done in coordination with the Coordination Framework and came ahead of Savaya’s expected visit to Baghdad in the next two days.
It is worth noting that the newspaper “Al-Alam Al-Jadeed” prepared a previous report on America’s policy towards Iraq a year after the US President Donald Trump took office, in which Iraq appeared in Washington’s policies within multiple approaches, based on managing files rather than direct engagement, such as completing the withdrawal of the international coalition with tightening financial control, and linking security cooperation to the files of weapons and stability, in a context that redefined the relationship between the two sides during the past stage.
MP: Parliament session postponed due to government influence... it was intended to "delay" Sudan's economic decisions
Iraqi parliament member Mohammed Jassim al-Khafaji revealed that the parliamentary session scheduled for today was postponed due to government influence, and it was intended to "wait and see" on the government's economic decisions.
The Iraqi parliament was scheduled to hold a parliamentary session on Monday, January 26, 2026, to discuss a number of decisions issued by the caretaker government, including Decision 40 of 2026, but the lack of a quorum prevented the session from being held.
The MP stated in a post on his social media account that "the session was adjourned due to the lack of a legal quorum, and the matter proceeded with governmental influence and parliamentary support from those absent from the session," attaching an official document to his statement.
The document revealed a decision by the Iraqi Parliament, submitted by Al-Khafaji, requesting "a delay in implementing a number of decisions issued by the Council of Ministers during the caretaker period, including the Economic Ministerial Council Decision No. 40 of 2026, which included the cancellation of university service allowances."
According to the leaked document, Parliament intended to “first: recommend to the Cabinet to postpone the implementation of Resolutions (957/2025), (1083/2025), (11/2026), (40 of 2026), until the next Cabinet is appointed. Second: recommend to the Ministry of Finance not to implement the above resolutions until they are approved by the Cabinet of the next government.”
The media office of the House of Representatives announced this afternoon that "the House of Representatives is postponing its session" without specifying a new date for it.
Parliament denies postponing the session to elect the president.
The House of Representatives denied postponing Tuesday's session dedicated to electing the President of the Republic.
The media office of the House of Representatives stated in a statement that "Tuesday's session to elect the President of the Republic is scheduled to take place as planned, and the news circulating about its postponement is false."
It is worth noting that Foreign Minister Fuad Hussein announced the postponement of the presidential election session to next Sunday.
The coordinating body is meeting tonight to unify its position on the presidential candidate.
An informed political source stated on Monday that the coordinating framework will hold a meeting tonight to unify its position on the presidential candidate.
The source told Shafaq News Agency that "the coordination framework will hold an important meeting this evening, Monday, at the headquarters of the National Approach Party, to discuss the issue of the presidency and to deliberate on the available options, in preparation for reaching a final unified decision on who will be nominated to fill this position."
He pointed out that "the meeting comes after several attempts and contacts made by political forces with the aim of unifying the ranks of the Kurdish political forces, and reaching a single candidate for the presidency of the republic, in line with the requirements of the stage and the constitutional and political balances."
It is noted that the media department of the Iraqi Parliament published yesterday evening, Sunday, the schedule for the eighth session scheduled to be held next Tuesday, January 27, which includes one item, “electing the President of the Republic,” and will begin at eleven o’clock in the morning.
Earlier on Sunday, the Speaker of Parliament, Hebat al-Halbousi, set next Tuesday as the date for holding a session to elect the new President of the Republic of Iraq.
The Iraqi Parliament Presidency announced in the middle of this month the names of the candidates who met the legal requirements to run for the position of President of the Republic of Iraq, based on the provisions of Article (4) of the Law on the Provisions of Nomination for the Position No. (8) of 2012, and their number reached 15 candidates.
Later, the Federal Court ruled on the appeals of the candidates for the position, and reinstated 4 names as candidates for the position, bringing the final number to 19 candidates.
An informed political source had reported earlier on Monday that the current president, Abdul Latif Jamal Rashid, had withdrawn his candidacy for the position.
The source told Shafaq News Agency that "Rashid's withdrawal of his candidacy for the presidency comes less than 24 hours before the parliamentary session dedicated to electing the new president."
Date of al-Maliki's appointment to form the government
MP Suzanne Al-Saad explained: “Next Tuesday will be the date for electing the President of the Republic within the House of Representatives.”
Al-Saad said in press statements: “Nouri al-Maliki will be tasked with forming the government next Tuesday after the election of the President of the Republic.”
Al-Saad explained: “Al-Maliki will be officially tasked with forming the government during the same session dedicated to electing the President of the Republic, if the constitutional procedures proceed as planned.”
International trade: Iraq has transformed into a safe and attractive environment for investment.
The International Trade Centre confirmed on Monday that Iraq has taken concrete and effective steps in modernizing its trade and investment framework through customs reforms.
Eric Bochot, the center’s program director in Iraq, told the official newspaper, as reported by Dijlah News, that “the ongoing reforms in customs, investment frameworks, trade facilitation, and the promotion of transparency, predictability, and efficiency for economic actors have contributed to improving the overall business environment.”
Bushout noted that as these reforms continue, the interest of regional and international partners is growing, with cautious but positive expectations of increased trade, investment, and private sector participation in the coming years.
Iran: What is happening regarding the government in Iraq is an internal matter that concerns only its people.
“Who assumes the position of President of the Republic or Prime Minister is a matter that concerns the Iraqi people alone,” Baqai said at a press conference, explaining that “what is happening regarding governance in Iraq is a purely internal matter.”
He added that "the rapprochement between Tehran and Baghdad worries the United States," stressing that "Iraq alone is concerned with determining its fate, and unlike the United States, we fully respect the decision of the Iraqi people."
Baqai continued, "Unfortunately, interfering in the internal affairs of the countries of the region has become a bad habit among American officials," stressing that "this behavior is completely unacceptable for any sovereign state."
Want to Support My FX Buddies?
.png)
Support My FX Buddies Big or Small I appreciate it all
BuyMeACoffee CashApp:$tishwash
https://paypal.me/tishwash
.jpeg)
Iraq faces its toughest test yet: US threats to cut off oil revenues plunge the country into a complex crisis.
Abbas al-Jubouri, head of the Al-Rafid Center for Political and Strategic Studies, warned on Sunday (January 25, 2026) of serious repercussions that the Iraqi state may face if political forces proceed with including armed factions in the next government formation, in light of clear American threats to cut off or restrict the revenues of Iraqi oil sales deposited in the United States.
Al-Jubouri told Baghdad Today that “activating this threat is not just a symbolic or political measure, but rather a very dangerous economic pressure tool, given that Iraq relies primarily on the American financial system to pass its oil revenues, which makes the national economy vulnerable to severe shocks that may affect salaries, service projects, cash reserves, as well as the stability of the dinar exchange rate.”
He explained that “the United States views the issue of involving armed factions in the government from an angle related to regional security and adherence to governance standards, and that any step that may be interpreted as legitimizing weapons outside the framework of the state may prompt Washington to take punitive financial measures, including freezing assets or imposing strict banking restrictions.”
He added that “Iraq today faces a very delicate sovereign test, which is to balance the requirements of internal political agreements with the international obligations imposed by the global financial system,” warning that ignoring this balance “may put the country in direct confrontation with the international community, and bring back scenarios of economic isolation and undeclared sanctions.”
Al-Jubouri stressed that “the solution does not lie in escalation or defiance, but rather in adopting a clear governmental approach based on restricting weapons to the state, strengthening the independence of political decision-making, and reassuring international partners that the next government will be run according to the logic of the state and institutions, not the logic of axes and external loyalties.”
He concluded by saying that “any tampering with oil revenues, which represent more than 90% of the state’s resources, will place the greatest burden on the Iraqi citizen,” calling on political forces to prioritize the national interest and realize that economic stability is organically linked to political and security stability.
The Associated Press published earlier on Saturday (January 24, 2026) a report by the India Times network, confirming that the United States had begun threatening Iraq with economic strangulation by preventing access to the dollar, following Washington’s control of Venezuelan oil and the start of its marketing in global markets.
The agency stated, according to what was translated by "Baghdad Today", that the American threats to impose direct economic sanctions on the Iraqi government and prevent the flow of dollars are unprecedented in Washington's dealings with its Iraqi partner, noting that the American position witnessed a remarkable shift after its control over Venezuelan oil.
The agency suggested that the new American hardening towards Iraq stems from Washington’s conviction that it can control the global oil market and prevent any price increases in the event of a halt in Iraqi exports, by compensating for them with Venezuelan oil, a scenario that could materialize if the United States proceeds to prevent the dollar from reaching Iraq.
The agency noted that the United States issued direct threats to the Iraqi government, vowing to impose comprehensive economic sanctions on the government itself, rather than targeting individuals or institutions, in addition to causing what it described as a “dollar famine” inside Iraq, in the event that armed factions participate in the next government formation.
The recent US threats to Iraq come in the context of a broader political-economic escalation led by Washington to rearrange the global energy market, after tightening its control over Venezuelan oil and beginning to market it as a possible alternative to oils coming from countries subject to complex political calculations.
Iraq relies heavily on the dollar-based international financial system to manage its oil revenues and finance its general budget, making any restrictions on dollar access a highly influential tool of pressure on the country’s economic and financial stability.
Sharp disagreements within the Halbousi coalition over the veto of a third term for Maliki
Informed sources revealed on Sunday the existence of deep disagreements within the leadership of the Halbousi Alliance due to what some have termed a “veto” on a third term for Nouri al-Maliki.
The source told Al-Maalouma that "important figures within the Halbousi Alliance were dissatisfied with the statement issued by the National Political Council, which implicitly vetoed a third term for Maliki, despite the support of the Alliance's constituent forces for him as a candidate to form the next government."
The source
added that "these figures emphasized the necessity of dealing with the Alliance's constituent forces and their choices according to clear principles, far removed from personal agendas," noting that "what was stated in the statement represents only Halbousi's opinion and not that of all the leaders of his alliance."
The source pointed out that "this statement may lead to an escalation of disagreements within the alliance, as such decisions should be made through coordination and agreement, not unilaterally. This is what prompted the Azm and Hazm National Alliances to reject the statement, asserting that it was not issued in agreement with Mohammed Halbousi."
To save the federal budget, idle capital will be converted into billions.
An economist has proposed a plan to control the fiscal deficit by converting idle capital into real estate and tourism investments to reduce pressure on cash spending.
Economic expert Safwan Qusay stated: “Iraq needs a precautionary economic plan to deal with the drop in oil prices,” noting that “the current oil price of $62 per barrel is less than the budget estimates by an average of $70.”
He suggested several steps, including:
Commitment to Iraq's quota within OPEC and purchasing additional shares from producers to compensate for the quantities produced
Launching the in-kind spending project by converting idle capital into real estate, industrial, tourism, and commercial shares in refineries, ports, and airports.
Transferring a portion of idle government assets to creditors to reduce pressure on cash spending
General rationalization of expenditures on goods and services without affecting low-income groups.
Qusay explained: “These steps will contribute to reducing the financial deficit and improving the Iraqi economic situation.”
Zebari on Maliki's nomination and the presidential election date: The coming days are full of surprises.
On Sunday, January 25, 2026, Hoshyar Zebari, a leader in the Kurdistan Democratic Party, said that nominating Nouri al-Maliki as a candidate for prime minister and setting a date for the session to elect the president of the republic "does not mean that the determination of the three presidencies and the formation of the government has been decided," noting that the coming days are "full of surprises and twists."
Zebari stated in a post followed by “Al-Jabal” that “the nomination of the majority of the leaders of the coordination framework for Maliki to head the government, and the convening of the parliament session on January 27 to elect the president of the republic, does not mean in Iraqi politics that the crisis, the determination of the three presidencies, and the formation of the government have been resolved.”
He added, "The coming days are full of surprises and twists, and double the effort is required."
Another version
Zebari warns of what's to come: The crisis is not over and the days ahead are full of surprises.
Nominating Maliki is not everything.
Hoshyar Zebari, a prominent leader in the Kurdistan Democratic Party, said on Sunday that the nomination of Nouri al-Maliki by a majority of the leaders of the Coordination Framework for the premiership and the setting of January 27 as the date for the convening of Parliament and the election of the President of the Republic does not mean in Iraqi politics that the crisis, the determination of the three presidencies, and the formation of the government are settled, noting that the coming days are “full of surprises and twists,” which requires double the effort.
Marco warns Iraq on ties with Iran as al-Maliki sets return
US Secretary of State Marco Rubio warned Iraq on Sunday against a pro-Iranian government as the expected return of Nouri al-Maliki as prime minister stirs Washington’s concern.
Maliki, who left power in 2014 following heated pressure from the United States, has been chosen by Iraq’s largest Shia bloc, which would put him in line to be nominated prime minister.
Rubio, in a telephone call with incumbent Prime Minister Mohammed Shia al-Sudani, voiced hope the next government will work to make Iraq “a force for stability, prosperity and security in the Middle East.”
“The secretary emphasized that a government controlled by Iran cannot successfully put Iraq’s own interests first, keep Iraq out of regional conflicts or advance the mutually beneficial partnership between the United States and Iraq,” Rubio said, according to State Department spokesman Tommy Pigott.
A pro-Iranian government in Iraq would be a rare boon for Tehran’s clerical state after it suffered major setbacks at home and in the region.
The Islamic republic has killed thousands of Iranians since mass protests erupted in late December.
Since the October 7, 2023 attacks, Israel has hit Iran both with strikes inside the country and heavy blows against Tehran’s Lebanese ally Hezbollah, while Iran lost its main Arab ally with the fall of Bashar al-Assad in Syria.
An Iraqi political source told AFP that the United States had conveyed that it “holds a negative view of previous governments led by former prime minister Maliki.”
In a letter, US representatives said that while the selection of the prime minister is an Iraqi decision, “the United States will make its own sovereign decisions regarding the next government in line with American interests.”
The United States wields key leverage over Iraq as the country’s oil export revenue is largely held at the Federal Reserve Bank in New York, in an arrangement reached after the 2003 US invasion that toppled Saddam Hussein.
Chief among US demands is that Iraq prevent a resurgence of Shia armed groups backed by Iran. Sudani, who took office in 2022, has won US confidence through his delicate efforts to curb violence by the groups.
Maliki initially took office in 2006 with support of the United States as he strongly backed US military efforts against al-Qaeda in Iraq and other Sunni militants.
But the United States eventually soured on Maliki, believing he pushed an excessively sectarian agenda that helped give rise to the ISIS extremist movement.
Iraq’s parliament meets Tuesday to elect a new president, who holds a largely ceremonial role but will appoint a prime minister.
No comments:
Post a Comment