Iraq Economic News and Points To Ponder Friday Afternoon 6-19-26
Al-Mustaqilla Reveals The Reason For Al-Alaq's Dismissal: Exchange Rate Disputes Behind The Decision
June 18, 2026Last updated: June 18, 2026 Al-Mustaqilla - A source revealed to Al-Mustaqilla that the decision to dismiss the Governor of the Central Bank of Iraq, Ali Al-Alaq, came as a result of a direct dispute over the exchange rate of the Iraqi dinar, after he refused in recent days to proceed with any amendment to the exchange rate against the dollar.
According to the source, Al-Alaq’s stance rejecting any change in the value of the dinar during the recent period constituted a point of contention within decision-making circles, which prompted – according to the information circulating – a decision to dismiss him from his position suddenly, and to replace him today with Nizar Nasser Al-Amiri as the new governor of the Central Bank of Iraq.
In the same context, researcher and consultant in economics and international transport Ziad Al-Hashemi said in a press statement that the file of changing the value of the Iraqi dinar is “being cooked up on a high fire” after the dismissal of the governor of the Central Bank, in an indication of possible moves related to monetary policy and the exchange rate during the next stage.
Given these facts, questions remain about the future of the Central Bank of Iraq’s policy, and whether the next stage will actually witness any change in the dinar’s exchange rate, or whether the matter will remain within the framework of the current monetary balances. https://mustaqila.com/المستقلة-تكشف-سبب-إقالة-العلاق-وخلا/
An Economist Warns Of Dire Economic Consequences From Changing The Dollar Exchange Rate.
{Economic: Al-Furat News} Economic expert Manar Al-Obaidi confirmed that the discussions taking place about the possibility of reducing the value of the Iraqi dinar against the dollar come in light of delicate economic conditions, especially with the decline in government revenues to low levels compared to previous periods, stressing the need to analyze the dimensions of this trend and its effects on the economy and society.
Al-Obaidi explained that supporters of this measure point to a number of potential gains, including reducing government spending denominated in dinars, curbing imports which gives the local product a chance to grow, in addition to protecting cash reserves from depletion, and trying to reduce the gap between the official exchange rate and the parallel market rate.
Conversely, Al-Ubaidi warned of negative repercussions that could outweigh any potential benefits, most notably a loss of confidence in the local currency and an increase in the dollarization of the economy, which would widen the price gap instead of narrowing it.
He also pointed out that exchange rate instability acts as a deterrent to both domestic and foreign investments, which require a stable economic environment to implement their projects.
The economist pointed out that reducing the value of the dinar will automatically lead to an increase in the government's operating expenses as a result of many contracts and services being linked to foreign currency, while also warning of sharp inflationary waves that will lead to an expansion of poverty and damage to vulnerable classes, in addition to creating a recession in the commercial sector, which in turn will contribute to exacerbating unemployment rates.
Al-Obaidi concluded that adjusting the exchange rate alone is not a radical solution, but rather a postponement of a structural crisis that requires comprehensive solutions based on three main axes: reducing inflation in operating expenses, developing non-oil revenues, and correcting the trade imbalance, stressing that any change in the exchange rate should be part of an integrated reform package and not a single tool to reduce expenses only.
https://alforatnews.iq/news/خبير-اقتصادي-يحذر-من-تبعات-اقتصادية-وخيمة-بتغيير-سعر-صرف-الدولار
Al-Karawi: The Concept Of A Mini-Budget For 2026 Has Not Yet Been Proposed.
The Information/Baghdad – MP Mudhar al-Karawi confirmed on Friday that there is no proposal or support so far for the concept of a mini-budget for 2026.
Speaking to Al-Maalouma, al-Karawi said, “All available indicators currently suggest that a budget will not be approved in 2026, especially given the delay in forming a government, which may take additional time.”
He added, “Talking about the possibility of proposing a mini-budget is still premature, and there is no parliamentary movement in this direction at present.” He explained that “proposing the budget is within the government’s purview, after which it will be discussed within the parliamentary finance committee to make the necessary amendments, and then presented for its first and second readings before being voted on in the House of Representatives according to constitutional procedures.”
Al-Karawi pointed out that “so far, there is no proposal or actual movement towards a mini-budget, and the picture remains clear regarding the extent of the financial challenges, as well as the price of a barrel of oil, which is a decisive factor in determining the features of any future budget.”
He concluded by saying, “Current data indicates that things are moving towards the budget being approved during 2027.” End/25
Al-Mustaqilla Reveals: Washington Demands The Suspension Of 8 Iraqi Banks, And Barak Hands Over Secret Names To Al-Zaidi.
June 17, 2026Last updated: June 17, 2026 Al-Mustaqilla News Agency – An informed source revealed to Al-Mustaqilla that US Special Envoy to Syria and Iraq, Tom Barrack, conveyed during his visit to Baghdad an explicit US request to Prime Minister Ali al-Zaidi to suspend at least eight Iraqi banks and take them out of service, following reports indicating their involvement in illegal activities in the foreign exchange market. The same source stated that the US side provided the Iraqi government with specific names, without disclosing them publicly.
Context: File open since 2023
This is not the first time Washington has pressured Baghdad on the banking sector. In July 2023, the US Treasury Department imposed sanctions on fourteen Iraqi banks for allegedly facilitating Iranian dollar transactions. The list was later expanded to include eight additional banks, among them Al-Huda Bank. Specialized reports indicate that 35 out of 72 banks operating in Iraq are now subject to varying degrees of US sanctions.
The Zaidi dilemma
Responding to the American request would mean a decision with direct economic and social repercussions: these banks serve depositors and finance commercial transactions. Ignoring it would complicate relations with Washington at a time when al-Zaidi is preparing to visit the country in July. Currently, al-Zaidi does not have the authority to shut down a bank without legal procedures determined by the Central Bank.
Frequently Asked Questions
Why is Washington demanding the closure of Iraqi banks?
Because of suspicions that they facilitate illegal dollar transfers that ultimately benefit Iran, which is subject to US sanctions.
Have the names of the eight banks been announced?
No. The names were handed over to the Iraqi government confidentially and have not been officially announced yet.
https://mustaqila.com/washington-8-iraqi-banks-shutdown-2026/
Iraq's Reserves Are Slipping... Has The "Financial Cushion" Entered A Danger Zone?
June 17, 2026Last updated: June 17, 2026 Independent/- Official data issued by the Central Bank of Iraq indicates a significant decline in the level of foreign reserves during the second quarter of 2026, amid continued pressure on external liquidity and fluctuations in financial factors related to global markets.
According to the data, foreign reserves on May 28 amounted to about 118.947 trillion dinars, compared to 120.675 trillion dinars on May 21, reflecting a weekly decrease of 1.728 trillion dinars and a decline rate of 1.43%, which indicates the continuation of the downward trend during the month of May.
On a monthly basis, the figures showed that the reserve recorded about 127.152 trillion dinars in April, after it was at 130.443 trillion dinars in March, reflecting a gradual decline over a period of three consecutive months, which raises questions about the dynamics of reserve management at this stage.
Gold as a hedging element
The data showed that the value of gold included in the official reserves amounted to about 32.973 trillion dinars, remaining one of the most prominent components of hedging within the structure of foreign reserves, in light of the fluctuations witnessed by currency prices and global markets.
Economic reading
This decline in reserves reflects a range of potential factors, including:
Changes in foreign exchange flows
Managing external liquidity and settling state obligations
Oil price fluctuations and their impact on dollar revenues
Global financial market conditions and exchange rates
Although reserve levels remain within relatively high ranges compared to previous years, the continued downward trend may constitute a signal that warrants close monitoring, especially given the Iraqi economy's heavy reliance on oil revenues.