Rumors are putting pressure on the currency market and disrupting prices.
The exchange rate of the dollar against the Iraqi dinar continues to rise, despite recent developments in the Middle East region. Economic experts attribute this to a set of overlapping internal and external factors, most notably increased demand and speculation in the market, in addition to regional tensions and regulatory measures.
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Economic expert Walid Al-Agili said that the rise in the dollar is mainly due to increased demand for it, explaining that “speculation and rumors in the market play a major role in raising the price, as some traders and money changers stockpile dollars with the aim of selling them later at a higher price.”
He added that the spread of unconfirmed news about regional situations, such as talk of continued tensions or the closure of some trade routes, is driving individuals and traders to buy dollars as a hedge, exacerbating pressure on the market. Al-Agili pointed out that restrictions on foreign transfers and tightened financial procedures have also contributed to reducing the official supply of dollars, pushing some of the demand into the parallel market and thus driving up prices.
For his part, Professor of International Economics Nawar Al-Saadi explained that the political fluctuations in Iraq and the region are directly reflected in the exchange market, indicating that “the recent regional tensions have brought back a state of uncertainty to the markets, which has led to an increase in demand for the dollar globally and locally as a safe haven currency.”
He added that the heavy reliance on oil as a primary source of foreign currency makes the Iraqi economy more sensitive to any disruptions or concerns regarding its flows.
In conclusion, experts believe that the continued rise of the dollar is not linked to a single factor, but rather is the result of an interaction between local speculation, increasing demand, regional conditions, in addition to financial policies and regulatory procedures within the country.
The Central Bank of Iraq is in the dock... Who is managing the dollar file?
The dollar crisis in Iraq is no longer just a difference between the official price and the market price, but has turned into a larger political and economic question: Who has the real decision-making power within the hard currency file? The state, represented by the Central Bank, or the network of banks, intermediaries, and interests that move around the dollar window and foreign transfers?
This question has resurfaced strongly following the sharp statements made by MP Alia Nassif, in which she attacked the performance of the Central Bank of Iraq, considering that the monetary institution no longer plays its true role in supervision and regulation, but has become, according to her description, closer to a “shop or store for sale.”
Nassif’s statements did not pass as a mere political stance, because they came at a sensitive time when the exchange market is experiencing frequent turmoil, and doubts are escalating regarding the mechanisms for selling dollars, the nature of the relationship between the Central Bank and private banks, and the limits of the state’s ability to control the movement of funds leaving Iraq.
In a televised interview, Nasif said that the Central Bank “is no longer a bank in the true sense,” noting that some banks have gained direct influence over monetary policy decisions, instead of being subject to the authority of the institution that is supposed to monitor and regulate their work.
These accusations reveal a deeper crisis related to the structure of the Iraqi banking system, as the debate is no longer limited to the price of the dollar in the parallel market, but has extended to the question of influence within the financial sector: Who gets the dollar? By what mechanisms? And who monitors the end beneficiary of the transfers?
Observers believe that the dollar issue has turned into one of the most sensitive arenas of economic conflict in recent years, due to the overlap of politics with money, the involvement of private banks in the heart of foreign transfer operations, as well as the increasing American pressure on the Iraqi financial system under the pretext of compliance and preventing money laundering and financing of prohibited entities.
In contrast, the Central Bank repeatedly affirms in its statements that the procedures adopted in selling dollars and foreign transfers aim to regulate trade, ensure that financial transactions pass through official channels, and reduce reliance on the money market. However, the continued gap between the official price and the market price raises serious questions about the effectiveness of these procedures.
The crisis is not just about the electronic platform, but about trust in the entire system. The platform, which was presented as a tool to regulate transfers and detect incorrect invoices, has itself become a focus of controversy, amid accusations of manipulation or circumvention of procedures, and the existence of entities able to profit from the price difference between the official and parallel dollar rates.
Nasif goes on to accuse that the problem lies not only in the technical tools, but also in the nature of the relationship between the central bank and some banks, a relationship which she says has put the monetary institution in the position of being affected rather than influencing, and in the position of receiving market pressures rather than controlling them.
This accusation, if proven true, opens the door to a very serious question: Has the Central Bank lost part of its operational independence to the influence of banks, or does the crisis stem from the nature of the Iraqi financial system, which for years has relied on currency auctions and transfers as a main channel for financing trade?
While the central bank is legally independent in managing monetary policy, legal independence alone is insufficient if the implementation mechanisms are subject to political, banking, and commercial pressures. The market is influenced not only by official data but also by the level of confidence in the monetary institution's ability to enforce its rules on everyone.
The issue is particularly sensitive because the dollar in Iraq is not merely a banking matter, but a direct factor in commodity prices, import costs, market stability, and the citizen's ability to cope with inflation. Any fluctuation in the exchange rate quickly translates into economic hardship before becoming a political issue in parliament and the media.
The exit or restriction of a number of banks from dealing in dollars during the past periods has deepened doubts about the future of the private banking sector, and opened a wide door to questioning the criteria for sanctions or restrictions, and the ability of Iraqi banks to build normal relationships with correspondent banks abroad.
In light of this scenario, the central bank appears to be facing a double test: the first is economic, relating to its ability to control the exchange rate and manage the demand for dollars, and the second is political and regulatory, relating to its ability to convince public opinion that the hard currency decision is not managed behind the scenes through banking interests or networks of influence.
Data circulating in economic circles indicates that the continued gap between the official price and the market price reflects a flaw in two main aspects: the first relates to the size of the real and artificial demand for the dollar, and the second relates to the transparency of the transfer channels and the parties benefiting from them.
Therefore, calls for an investigation or a comprehensive review of the dollar file do not appear to be merely a response to political statements, but rather a pressing economic necessity. What is required is not just knowing the volume of daily sales or the names of the participating banks, but also tracing the flow of funds, verifying invoices, identifying the ultimate beneficiaries, and reviewing the banks' relationships with commercial and political entities.
To date, the Central Bank has not issued a detailed response to Nasif's latest accusations, leaving the door open to further interpretations. In highly sensitive matters like this, silence can be as costly as the accusation itself, as the lack of clarification fuels suspicion and undermines trust.
The dollar crisis cannot be isolated from the broader context of Iraq's relationship with the international financial system, nor from US pressure regarding remittances, nor from attempts to control the flow of funds through correspondent banks. However, these external factors do not negate internal responsibility, nor do they absolve Iraqi institutions of their duty of transparency and accountability.
If Iraq relies on its oil revenues deposited in dollars, then the management of these funds should be the most transparent and disciplined of all matters, not the most opaque and suspicious. And if the central bank is the legal guardian of monetary policy, it must prove that it is not merely a facade for managing a crisis over which it does not have full control.
The issue today is no longer a technical question about the exchange rate, but rather a test of the state's authority within the country's most crucial financial sector. When the dollar becomes a source of daily anxiety, when banks become the focus of accusations, and when the question is publicly asked: Who is managing the dollar file?, the answer must not come in slogans, but in figures, documents, and accountability.
Between Nasif's accusations, the Central Bank's silence, and market anxiety, the dollar issue remains open to a wide range of political and economic possibilities. However, what is certain is that any genuine reform will not begin with merely changing the mechanisms, but with exposing the centers of influence within the financial system and rebuilding confidence that decisions regarding hard currency in Iraq are made by the state, not by banks and intermediaries.
Iraqi officials warn of economic fallout from budget delays
link from Kurdish news
Experts and officials in Iraq’s economic and financial sectors have warned of the costly consequences of delays in approving the 2026 budget, as political deadlock over government formation persists.
Mudher Mohammed Salih, the Iraqi premier's financial advisor, told state media on Saturday that the delay is having severe effects “in an economy heavily dependent on government spending,” which he said accounts for around 50 percent of gross domestic product (GDP) and serves as the “primary engine of growth.” Salih added that delays in approving the budget “acts as a recessionary force,” affecting both the public and private sectors and creating a “prolonged state of uncertainty."
Since November’s parliamentary elections, Iraq has struggled to form a government. President Nizar Amedi was only elected in mid-April, while a prime minister has yet to be appointed. The ongoing political deadlock has stalled legislative work, including the budget.
Once a cabinet is formed, the new prime minister and finance ministry would need to review, adjust, and formally submit the draft 2026 budget to parliament. The finance committee would then require weeks to debate, amend, and negotiate allocations before a final vote.
The situation is further complicated by Iran’s closure of the Strait of Hormuz since March 8, in response to the United States and Israel’s military campaign against it, significantly impacting Iraq’s oil exports, as 90 percent of the country’s oil exports typically pass through the waterway.
Salih said budget delays can destabilize markets, harm the private sector, and increase unemployment, while also affecting public sector operations. He noted that reliance on the 2025 budget framework could stall ministry work, delay new investment projects, and hinder the completion of existing ones, particularly in key sectors such as infrastructure, energy, and services.
He suggested temporary budgeting as a possible solution, alongside setting a constitutionally binding timeline for parliament to approve future budgets to prevent similar delays.
Jamal Kocher, a member of the legislature’s finance committee, told Iraqi state media on Saturday that parliament can resort to reviving emergency borrowing measures that allow the government to operate in the absence of an approved budget.
The current impasse mirrors the 2021 budget crisis, which led to a record 364-day political vacuum and left Iraq without a formal spending plan for most of 2022. That deadlock stemmed from a power struggle between powerful cleric Muqtada al-Sadr’s bloc and the pro-Iran Coordination Framework following the October 2021 elections, preventing the appointment of a prime minister. With only a caretaker government in place, Iraq relied on emergency funding, halting new investment and infrastructure projects until a government was formed in late 2022.
link
Iranian media reported on Sunday (April 26, 2026) hearing explosions of unknown origin in the city of Kermanshah in the west of the country, without any official information indicating an attack or aggression.
Iranian local sources stated that "the sounds that were heard may have been caused by the launch of air defense systems, while the security or military authorities have not issued any statement clarifying the nature of the incident."
These developments come amid a tense regional atmosphere that the region has been witnessing for weeks, against the backdrop of the escalation between Iran and the United States and its allies, and the accompanying increase in air defense activity in several Iranian cities.
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Government options to address the 2026 budget delay: borrowing or an emergency law similar to the food security law.
The Parliamentary Finance Committee revealed several options available to the government to address the delay in approving the 2026 budget, primarily resorting to borrowing laws or enacting an emergency law similar to the Food Security Law.
Committee member Jamal Kojar told the official newspaper, “There are several alternatives if the budget is delayed, including resorting to borrowing as happened in 2021, or enacting a law similar to the Food Security Law. However, this depends on the government’s needs and the level of coordination between it and the Parliament.”
He explained that “the current government is operating in a caretaker capacity and does not have the authority to submit major financial bills independently, which necessitates direct coordination with Parliament if borrowing or enacting exceptional laws is required.”
Kojar indicated that “the government can continue spending according to the (1/12) rule of the operational budget, which ensures the continued payment of employee salaries without the need for new legislation, except in some special cases such as including new contracts after 2025.”
He pointed out that “the option of borrowing is also linked to the speed with which the new government is formed. If this matter is resolved within the constitutional timeframe, the House of Representatives should exert pressure on the government to submit the draft budget law as quickly as possible, given its importance in regulating the state’s financial management, including appointments, transfers, and the allocation of spending.”
He emphasized that “the House of Representatives cannot legislate laws of a financial nature without coordination with the government, and the previous food security law was enacted at the request and with the approval of the executive branch.” He noted that “Parliament is capable of supporting the government by passing emergency laws when necessary, whether through a borrowing law or a law similar to the food security law, but there has been no official request in this regard so far.”
Kujer stressed that “there is no intention to adopt a three-year budget again, and the country will return to the usual annual budget system,” affirming that “any future steps will remain contingent on the government’s request and its actual needs.”
New update regarding the postponement of the prime minister selection... What's happening behind the scenes?
Iraqi political sources revealed on Saturday evening the reasons for postponing the meeting of the Coordination Framework forces that was scheduled to be held today, noting that the disagreements centered on two prominent candidates, namely former Prime Minister Haider al-Abadi and the head of the Alternative Alliance, Adnan al-Zurfi.
According to the sources, the American signals regarding the candidates prompted the Shiite blocs to consider al-Abadi and al-Zurfi as the closest to assuming the position, but the division within the framework between supporters of this and that prevented reaching a final agreement.
The coordination framework may hold a new meeting without specifying a date, given the approaching end of the 15-day constitutional deadline, which expires today, according to sources.
In this context, the head of the Supreme Islamic Council, Humam Hamoudi, confirmed on Saturday that the coordination framework has set priorities for the selection of the prime minister.
In a speech at the bi-monthly dialogue forum, which was relayed in a statement by his media office, Humam Hamoudi said, “The coordination framework has set priorities for selecting the prime minister, most notably: national acceptance, commitment to the vision of the supreme religious authority, and achieving the interest of Iraq.”
He added that “the selection of the prime minister comes through the electoral votes, the number of deputies, and the national forces within parliament,” indicating that “the framework is keen to ensure that the candidate is capable of succeeding in the position and enjoys the consensus of the coordinating framework forces.”
He added that “the coordination framework represents the political reference for the next prime minister.”
In contrast, political observers, speaking to “Roj News”, believe that time is running out for the coordination framework, stressing the need to prioritize national interest over partisan calculations, especially in light of the continued disagreements over the distribution of ministerial portfolios and the mechanism for selecting a prime ministerial candidate.
An Iraqi political source said that these disagreements between the framework forces prevented reaching a final agreement, which prompted the parties to put forward alternative names within the option of a “compromise candidate.”
The source, speaking to Roj News, indicated that “this trend came as a result of the difference between the leader of the State of Law Coalition, Nouri al-Maliki, and the head of the Reconstruction and Development Coalition, Muhammad Shia al-Sudani.”
He added that “among the names being considered as compromise candidates are former Prime Minister Haider al-Abadi and the head of the Alternative Alliance, Adnan al-Zurfi,” noting that “the latter is considered the most likely candidate so far.”
Iraqi political advisor Aqeel Jabr told Roj News, “The leaders of the framework must choose a candidate who has the ability and experience to manage the country, which is suffering from accumulated crises,” indicating that “certainly, the person who has the ability will gain the support of the framework.”
For his part, political expert Jamal al-Halbousi, in his interview with “Roj News”, took a different approach, pointing out that the political arena includes figures who have experience and presence in critical stages.
Al-Halbousi said, “There are those who have experience and have had a presence and role in the most difficult stages, and I mention by name Mr. Haider al-Abadi along with other candidates, but today we are facing a very difficult labor within the coordination framework, especially since there is only one day left, which is the end of the constitutional deadline for choosing the Prime Minister.”
He added, “We are now facing the passage of about six months without any real results, even though this position is the most important, and this interference and bickering between the political blocs should lead to a positive result that serves the interests of the Iraqi people.”
The coordinating framework had failed earlier on Friday to decide on a candidate for prime minister, which prompted it to postpone the meeting until Saturday evening, which is the last day within the constitutional deadline set for submitting the candidate to the president.
A Roj News correspondent reported that the meeting witnessed sharp disagreements over the proposed names, and was unable to achieve the required balance within the framework, nor has a consensus candidate been agreed upon yet.
Given the economic conditions in Iraq, political expert Dr. Hamid Al-Aqabi, head of the Iraqi Businessmen Union, stressed the need to move away from the quota system approach in choosing the prime minister.
Akab told Roj News that “the selection of the prime minister in Iraq is still based on sectarian quotas, despite the presence of large and competent cadres in the political, economic and social fields,” explaining that “the supposed role of political forces should be to monitor institutions, not to control executive positions.”
He added that “the premiership should be entrusted to an independent economic figure, far removed from quotas, capable of leading the country towards stability and achieving economic security,” stressing that this issue is one of the most important files that Parliament should discuss seriously.
He pointed out that “the economic crisis in Iraq, and the accompanying poverty and corruption, are largely due to the sectarian quota system upon which the political process was founded,” noting that the Iraqi public has been demanding reform of this path for years.
According to the information, the coordination framework discussed yesterday two main candidates: Ihsan Al-Awadi, who is supported by Al-Sudani, and Basim Al-Badri, the head of the Accountability and Justice Commission, who enjoys the support of Al-Maliki and the leader of Asa’ib Ahl Al-Haq, Qais Al-Khazali, along with the head of the Hikma Movement, Ammar Al-Hakim, as well as the support of the Badr and Sadiqun forces, the “Abshir Ya Iraq” bloc, the Iraqi Foundation Coalition headed by Mohsen Al-Mandalawi, and the Parliamentary Rights Bloc.
In this context, a proposal was put forward during the meeting to move towards a consensus candidate, and three names were discussed for this option, and one of them will be chosen.
Political circles are discussing three prominent names as compromise candidates: former Prime Minister Haider al-Abadi, the head of the Alternative Alliance Adnan al-Zurfi, and former Sadr leader Mohammed Saheb al-Daraji.
However, a political source indicated in his interview with “Roj News” that the scene is still unclear, with no clarity as to whether the coordination framework will move towards deciding on a compromise candidate or whether the country will enter a constitutional vacuum as the deadline for choosing the new prime minister approaches.
Earlier, MPs from within the framework, via “Roj News”, called for a swift resolution to this issue before the deadline expires, warning that exceeding it without an agreement could lead to a “major breach” for which the framework would bear responsibility.
The constitutional deadline is about to expire, as President Nizar Amidi has only one day left to appoint the candidate of the Coordination Framework, which presents itself as the largest parliamentary bloc according to the constitution and political norms since 2003.
The framework forces face a critical challenge in reaching a final agreement, given the time pressures and the differing positions among its parties.
No diplomatic breakthrough between Washington and Tehran... Will war return?
Hopes for a diplomatic breakthrough in the US-Israeli standoff with Iran faded on Sunday as efforts to revive talks stalled, with Tehran and Washington sticking to their positions and showing no clear signs of de-escalation.
In a sign of the stalled negotiations, Pakistani government sources reported that US forces had removed security equipment from the capital, Islamabad, suggesting that no US delegation would return for talks in the near future.
Reuters also quoted two Pakistani government sources as saying that two US Air Force C-17 aircraft had left Pakistan, carrying security personnel, equipment and vehicles intended to protect US officials.
In contrast, Iranian Foreign Minister Abbas Araqchi returned to Islamabad for further consultations, despite US President Donald Trump canceling a visit by his envoys the previous day.
According to the ISNA news agency, Araqchi is scheduled to convey to Pakistani officials “Iran’s positions regarding any framework for understanding to completely end the war.”
Araghchi had visited Islamabad the day before, then traveled to Oman, while Iranian envoys returned to Tehran for consultations and instructions regarding ending the war. He is expected to travel to Moscow after his talks conclude.
In Muscat, Araqchi met with Omani Prime Minister Haitham bin Tariq, where they discussed the security of the Strait of Hormuz, and he called for the establishment of a regional security framework free from foreign interference, according to the Iranian Foreign Ministry.
According to a regional official, Tehran is seeking to persuade Oman to support a mechanism for imposing fees on ships crossing the strait, while Iran insists on ending the American embargo before entering into any new round of negotiations, while mediators, led by Pakistan, are trying to narrow the gap of differences between the two sides.
In this context, the Iranian Foreign Ministry confirmed that any future talks would be indirect, through Pakistani mediation, given Tehran's caution after previous experiences that ended in military escalation.
For his part, Trump announced the cancellation of sending his envoys Steve Wittkopf and Jared Kushner to Islamabad, due to the lack of progress, saying: “They can contact us whenever they want.”
Last week, Trump extended indefinitely the ceasefire declared on April 7, which had largely halted the fighting that erupted on February 28, but a lasting settlement remains a long way off.
In parallel, Tehran largely closed the Strait of Hormuz, through which about one-fifth of the world’s oil and gas exports pass, while Washington imposed a blockade on Iranian ports, further complicating the situation.
In this context, Iranian President Masoud Pezeshkian stressed that his country would not enter into “imposed negotiations” under threat or siege, emphasizing the need to lift restrictions, especially the naval blockade, before any negotiating progress.
In response, Trump said that Iran had made a “much better offer,” but it was “not enough,” stressing that one of his main conditions was preventing Tehran from acquiring a nuclear weapon.
The International Atomic Energy Agency estimates that Iran possesses about 440 kilograms of uranium enriched to 60%, a level that is technically close to military use.
For his part, Pakistani political analyst Syed Muhammad Ali believes that postponing the talks does not represent a real setback, stressing that indirect channels are still open, and that reducing tensions requires time and patience.
He added that “the ceasefire is still holding, and both sides are willing to end the conflict without negative internal repercussions.”
While Trump spoke of “great internal confusion” within the Iranian leadership, saying that “no one knows who is in charge,” he asserted that his country “holds the initiative.”
In contrast, Pezeshkian stressed the unity of position within Iran, asserting that “there are no divisions between hardliners and moderates,” and that the country stands behind its supreme leadership in the face of pressure.
Expectations are that the nomination for Prime Minister will be finalized by this date... and the reasons for the delay have been revealed.
Al-Kindi told Al-Furat News Agency that "postponing the meeting of the Coordination Framework has its justifications," explaining that "the leaders of the framework believe that choosing the prime minister is of great importance for the next stage and its challenges, which requires high accuracy in the selection."
He added that "there are multiple viewpoints within the framework; however, the priority remains to reach a consensus on the appropriate candidate," noting that "the selection mechanism depends on studying the personal specifications, capabilities, and names put forward, and that the issue of delay is normal in order to allow understandings to mature and to reach the best option through discussions."
He explained that "the selection of the prime minister will be based on the specifications that Iraq needs in light of regional changes and economic challenges," noting that "the decision on this position will not be delayed for more than a week."
Al-Kindi stressed that "all the names currently being considered are respected and qualified; however, each person has their own experience and capabilities, and the final choice remains with whoever is most compatible with the requirements of the current stage and who can bring together the various parties."
Dagher: Iraq is “economically the worst”... and a dilemma looms within 3 months
Financial and banking expert Mahmoud Dagher described Iraq as "the worst country in the region economically," predicting that Iraq would face a "dilemma" within three months. In contrast, international transport consultant Ziad al-Hashemi considered the situation with Iraqi oil a "serious lesson," while also suggesting that the Banias port offers Iraq an opportunity to expand into new markets.
In detail, Dagher indicated in a television interview followed by “Al-Jarida”, that “it has become impossible for the dollar to reach Iraq since February 28,” adding, “We are now witnessing (a war economy), and its procedures are different.”
Dagher criticized the closure of various export outlets for Iraq, saying: “Why did they close the various export outlets for Iraq? We are reaping the results now.”
Dagher believes that “Iraq will face a dilemma in three months,” saying: “We are the worst country in the region in terms of the economic reality.”
He continued, “The Central Bank has $631 million in dollar reserves,” explaining that “printing currency is a routine procedure, and the Central Bank puts it in its warehouses.”
He pointed out that “the rise in the prices of goods and commodities is due to the increase in transportation costs,” adding, “We need to review the financial situation after three months.”
He pointed out that “borrowing should not be solely for paying salaries, but also for stimulating the private sector.”
For his part, Al-Hashemi, who was present at the same dialogue, believed that “the dollar shipment frozen by Washington does not affect the employees’ dinar.”
He added, "The Iraqi-American relationship is going through an exceptional phase; it is neither an enemy nor a friend."
He continued, “Many goods have been stopped from being shipped to Iraq because of their dangerous nature,” explaining that “the transit costs in the Suez Canal are exorbitant.”
He said: “What is happening to Iraqi oil is a powerful lesson for everyone; other options should be activated.”
He pointed out that “Banias port gives Iraq an opportunity to expand into new markets,” noting that “transportation costs in the Gulf have increased to 40-80%.”
He concluded by saying: “The decrease in the quantities entering the market has caused a monopoly situation among some traders.”
Postponing the framework meeting and continuing disputes threaten a new constitutional violation.
MP Abbas Hayal stated that, according to the information received, the meeting of the coordination framework was postponed, not suspended.
Hayal told Al-Mirbad that deliberations and side meetings are continuing among the leaders of the framework, and so far no new date has been set for the meeting, and we will enter into a new constitutional violation after there was a violation in the election of the President of the Republic.
Hayal, a representative of the Reconstruction and Development bloc, stated that there is clearly a disagreement among the leaders of the framework regarding the mechanism for nominating the candidate for the premiership. There are two groups within the framework: one group possesses the largest parliamentary bloc with more than 120 members, and the other group possesses a numerical bloc that does not exceed 40 or 50 members. The question is whether the mechanism should be based on two-thirds of the framework, or more than 8 members from the leaders of the framework alone, or also the general body of the framework, represented by the members of the House of Representatives (80%). He pointed out that the electoral entitlement should be taken into account when choosing the prime minister.
He explained that there is a legal opinion that holidays are not counted within the 15 days, meaning that the constitutional deadline has not ended yet. In any case, the framework should have ended this controversy and chosen the head of government because the stage is sensitive and dangerous and the current government is a caretaker government. The Commander-in-Chief of the Armed Forces does not have powers in these circumstances and the budget and its connection to the citizen’s livelihood. He pointed out that unfortunately we entered this political deadlock, and some of the framework’s leaders should have taken all of that into account and could have conceded some things for the sake of the country and to serve Iraq and not delay the government.
International organization: The Strait of Hormuz conflict is hindering Iraq's economic development.
Its closure poses an obstacle to reducing poverty in Iraq.
A report by the Borgen Project, an international anti-poverty organization, indicated that the tensions surrounding the Strait of Hormuz, which led to its closure, will affect the progress made by Iraq in reducing poverty rates, which have decreased in the country from 23% to 17.5% over 3 years, with the Human Development Index improving to 0.712 in 2024. The report stressed that establishing alternative infrastructure would enhance the country’s long-term economic stability and maintain the progress made in reducing poverty.
The report noted that recent tensions surrounding the Strait of Hormuz, a vital waterway through which approximately 20% of the world's oil and liquefied natural gas supplies pass, and which the Iranian government closed following US-Israeli airstrikes, have further strained Iraq's already fragile economy, threatening recent progress in poverty reduction. However, a solution may exist to avert future threats to the country's economic prosperity.
Recent progress in poverty reduction in Iraq:
In 2003, the United Nations Assistance Mission for Iraq (UNAMI) was established to help rebuild the country after the fall of the previous regime. Since then, the Iraqi people have faced numerous challenges, enduring years of war, political corruption, and economic hardship.
However, in recent years, the Iraqi government has made significant efforts to understand and reduce poverty. In 2025, the government officially launched its Multidimensional Poverty Index (MPI) analytical report, and over the past three years, the poverty rate in Iraq has decreased from 23% to 17.5%.
Furthermore, in 2024, Iraq achieved a score of 0.712 on the Human Development Index (HDI), which measures life expectancy, education, and standard of living. By achieving this score, Iraq surpassed the average HDI for Arab countries, a significant indicator of progress. Following the UN's declaration of its mission's success in 2025, UNAMI's mandate ended.
Despite this progress, many Iraqi citizens, including children, continue to suffer from deprivation in education, healthcare, and living standards.
Now, with the Strait of Hormuz closed and oil production halted, Iraq faces what a senior oil ministry official described as the “most serious operational threat” in more than 20 years.
The effects of the Strait's closure
have been evident since the outbreak of war in late February. The Iranian government has controlled the Strait of Hormuz, restricting and obstructing access to it. Landon Derentz of the Atlantic Council stated that "Tehran is exploiting the global economy's inability to withstand a prolonged closure of this waterway."
The report notes that the problem for Iraq, a strategic trading partner of the United States, lies in its reliance on crude oil for approximately 90% of its total revenue, which it exports via the Strait of Hormuz. Following the closure, Iraq was forced to halt oil production from its southern fields, resulting in a near-complete halt to its oil exports.
Now, nearly two months after Iran closed the strait, and despite intensive negotiations, American threats and warnings, and even a naval blockade—some of which were false alarms—the strait remains closed. The difficulty of reopening it is a problem in itself, and even if shipping traffic resumes, the Iraqi economy will remain vulnerable to future threats related to the strait.
The solution lies in finding alternatives.
While forcibly reopening the strait might offer a quick fix, it has proven to be a difficult and costly undertaking. Derentz, who served as White House energy director during the first Trump administration, suggests that building alternative infrastructure that bypasses the strait could provide a long-term solution, eliminating Iran’s ability to use the Strait of Hormuz as leverage.
“The East-West pipeline in Saudi Arabia has already demonstrated that alternative infrastructure can mitigate bottlenecks caused by a closure of the Strait of Hormuz,” he said. “This model should now be significantly scaled up.”
If the Iraqi government were to consider this option, it could be highly effective. It would permanently weaken Iran’s influence on the global economy, enhance the resilience of the Iraqi economy, and cost only a fraction of the $200 billion the United States was prepared to spend on military operations against Iran. Iraq has recently shown remarkable progress in reducing poverty. However, if the country is to fully escape poverty, achieving sustainable economic growth remains crucial. The US government recently reaffirmed its “enduring strategic partnership with the government and people of Iraq,” with several American companies currently operating in the country. A solution to the Strait of Hormuz issue would benefit not only a key trading partner but the entire global economy. While the conflict over the Strait of Hormuz may be an obstacle to poverty reduction in Iraq, it is certainly not the end of the road. A report by the British economic analysis firm AGBI indicated that the consequences of the ongoing war in the region, and the resulting disruption of Iraqi oil exports through the Strait of Hormuz, have exposed long-standing structural weaknesses in the Iraqi economy. This necessitates the implementation of long-overdue, tough economic reforms, as well as strengthening the role of the private sector and re-establishing energy routes that bypass the Strait of Hormuz.
(From the Borgen Project)
In a strategic move aimed at restructuring the monetary and economic reality in the country after years of isolation, the Central Bank of Syria announced a package of new measures, most notably the launch of a platform for international currency exchange, and working to reconnect to the global financial transfer system “SWIFT”.
According to the Governor of the Central Bank of Syria, Abdul Qader Hosri, the launch of the international currency exchange platform aims primarily to regulate the exchange market and eliminate the chaos of the "black market" that has burdened the Syrian economy. Through this step, Damascus aspires to replace informal transactions with a financial system based on transparency and fairness, drawing on international expertise to achieve this transformation.
Regarding the importance of this step, economist Mohammed Ghazal explained to Kurdistan24 that "Syria today is at the beginning of a radical transformation to get out of the state of a distorted economy isolated from the outside world," noting that "the path to recovery has begun with reconnecting the Syrian economy to the global economy."
Ghazal adds: “Confining financial and commercial channels through banks and official institutions under the umbrella of the state will inevitably lead to tightening the noose on the black market and reducing the large gap between the official and parallel prices, making the Syrian economy more stable and transparent.”
Damascus's efforts were not limited to internal reforms, but extended to attempts to break its international financial isolation. The Syrian Central Bank is currently working to reopen banking channels for foreign trade. These efforts culminated in a significant step: the opening of an official account with the Turkish Central Bank, aimed at facilitating the flow of funds and officially boosting Syrian exports to neighboring markets.
In this context, international cooperation consultant Ahmed Ankir tells Kurdistan24 that "the banking and financial sector in Syria is undergoing a delicate restructuring of its regional and international network of relationships."
Anker emphasizes that "current efforts are focused on redrawing the map of relationships between Syrian financial institutions and their global counterparts, such as the SWIFT system and regional and international correspondent banks," explaining that "rebuilding this sector and facilitating the role of financial intermediaries will provide significant services to the reconstruction process and the transfer of funds to Syria in the future."
According to observers, these moves and decisions represent a new economic turning point, putting the country back on the path to financial openness after years of stagnation and sanctions. However, a pressing question remains in economic circles: to what extent will these agreements—whether with Ankara or international institutions—truly end the financial isolation and establish sustainable monetary stability that benefits both citizens and businesses alike?
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