Iraq Economic News and Points To Ponder Monday Afternoon 8-31-26
Iraq’s Domestic Debt Climbs To $81bn In June
2026-08-31 Shafaq News- Baghdad Iraq’s domestic public debt rose to 106.072 trillion IQD (about $81 billion) at the end of June 2026, up 2.893 trillion IQD (about $2.21 billion), or 2.8%, from May, according to Central Bank of Iraq (CBI) data.
The debt has increased by 15.557 trillion IQD (about $11.9 billion), or about 17.2%, since the end of 2025, when it stood at 90.515 trillion IQD (about $69.1 billion).
Finance Ministry liabilities to the CBI accounted for the largest share, rising to 67.499 trillion IQD (about $51.5 billion) in June from 63.199 trillion IQD (about $48.2 billion) in May.
Treasury bills stood at 8.742 trillion IQD (about $6.67 billion), loans at 18.964 trillion IQD (about $14.5 billion) and bonds at 10.867 trillion IQD (about $8.30 billion).
The increase comes as government spending continues to outpace revenue. Public expenditure reached 46.697 trillion IQD (about $35.6 billion) through May, compared with revenue of 33.747 trillion IQD (about $25.8 billion), leaving a gap of about 12.95 trillion IQD ($9.9 billion).
https://www.shafaq.com/en/Economy/Iraq-s-domestic-debt-climbs-to-81bn-in-June
Dollar Gains Traction As Fed Outlook Strengthens
2026-08-31 Shafaq News The dollar held steady near a two-week high on Monday as markets ramped up bets on a rate hike after hawkish remarks by Federal Reserve Chair Kevin Warsh, while the yen slipped back through the closely watched 160-per-dollar level.
The U.S. central bank will "have work to do" if policymakers don't get the confidence they need that inflation is heading down to 2%, Federal Reserve Chairman Kevin Warsh said on Friday, in his clearest indication yet that further tightening may be needed to curb price pressure.
The comments fuelled bets on a September rate hike. Markets raised the implied probability of a move next month to 57%, while yields on interest-rate-sensitive two-year U.S. Treasury notes rose to a more than one-month high of 4.33%.
"Warsh's defense of the inflation target has reduced a major drag on the U.S. dollar and shifted the focus back to economic fundamentals," said OCBC's FX strategist Sim Moh Siong, adding that it helped rebuild the Fed's credibility and eased concerns about currency debasement.
Investors are now turning their focus to incoming U.S. data, particularly Friday's nonfarm payrolls report and next week's consumer inflation figures, both of which could shape expectations ahead of the September Fed meeting.
The euro edged up 0.1% to $1.1591, while sterling was little changed at $1.3539. Both currencies remained on track for their second monthly gains.
The dollar index , which measures the U.S. currency against six major peers, ticked down slightly to 99.6 after jumping 0.6% on Friday to its strongest level since August 17.
Even so, the index was still on track for a second consecutive monthly decline, as U.S. Treasury bond-buyback plans earlier in the month revived debasement trades.
Dollar demand was also supported by higher oil prices on Monday. Brent oil rose nearly 2% after U.S. forces struck Iran's Larak Island on Sunday, a U.S. official said, which marks the first known American strikes on Iran since late July.
YEN WEAKNESS, G20 MEETING IN FOCUS
Focus will turn to a U.S.-hosted meeting of G20 finance ministers and central bank governors on Monday and Tuesday. Markets will watch for signs of coordinated efforts to sever ties with Iran, as well as measures aimed at easing concerns over rising U.S. debt and bond yields.
A persistently weak yen is also in focus, with the dollar's renewed strength adding to pressure on the Japanese currency after it surrendered much of the gains made following July's intervention.
The yen was slightly weaker at 160.01 per dollar, after sliding beyond the 160-per-dollar level on Friday, a level widely viewed as increasing the risk of official intervention and putting the spotlight back on whether Tokyo and Washington may step in again to support the currency.
U.S. Treasury Secretary Scott Bessent said on Sunday that recent yen moves had been "pretty well contained" and that he expected Bank of Japan Governor Kazuo Ueda to "do the right thing" on monetary policy.
"Historically, interventions have only held when fundamentals moved in the same direction," said Carlos Casanova, UBP's senior economist for Asia.
"The yen remains under pressure from a still-wide rate gap, negative real rates, and the Bank of Japan's cautious pace."
Elsewhere, the New Zealand dollar was little changed at $0.5916, and the Australian dollar edged up 0.1% to $0.7163. (REUTERS)
https://www.shafaq.com/en/Economy/Dollar-gains-traction-as-Fed-outlook-strengthens
Gold Prices Fall In Baghdad, Erbil
2026-08-31 Shafaq News- Baghdad/ Erbil On Monday, gold prices declined in Baghdad and Erbil markets, according to a Shafaq News market survey.
Gold prices on Baghdad's Al-Nahr Street recorded a selling price of 965,000 IQD per mithqal (equivalent to five grams) for 21-carat gold, including Gulf, Turkish, and European varieties, with a buying price of 961,000 IQD. The same gold had sold for 970,000 IQD on Sunday.
The selling price for 21-carat Iraqi gold stood at 935,000 IQD, with a buying price of 931,000 IQD.
In jewelry stores, the selling price per mithqal of 21-carat Gulf gold ranged between 965,000 and 975,000 IQD, while Iraqi gold sold for between 935,000 and 945,000 IQD.
In Erbil, 22-carat gold was sold at 998,000 IQD per mithqal, 21-carat gold at 953,000 IQD, and 18-carat gold at 817,000 IQD.
https://www.shafaq.com/en/Economy/Gold-prices-fall-in-Baghdad-Erbil-9
USD/IQD Exchange Rates Stabilize Around 154,000 IQD In Baghdad, Erbil
2026-08-31 Shafaq News- Baghdad/ Erbil On Monday, the US dollar held steady against the Iraqi dinar for a second consecutive day, hovering around 154,000 IQD per $100 in Baghdad and Erbil markets.
According to a Shafaq News market survey, the dollar traded at 154,000 IQD per $100 at Baghdad’s Al-Kifah and Al-Harithiya central exchanges, unchanged from Sunday.
At exchange shops in Baghdad, the selling rate stood at 154,500 IQD per $100, while the buying rate was 153,500 IQD.
In Erbil, the dollar sold at 153,950 IQD per $100 and was bought at 153,850 IQD.
Basra Movement: Kuwait Gas Project Could Affect Maritime Claims
2026-08-31 Shafaq News- Basra Kuwait’s reported $3.3 billion gas-processing project near the Al-Zour refinery could advance development of Tuwaynah gas field before regional maritime claims are resolved, Basra’s Popular Movement against the Khor Abdullah Agreement said on Monday.
At a press conference, Movement members pointed to a Kuwaiti tender for a facility capable of processing about 632 million cubic feet of gas per day, warning that development could create an economic reality around the field while legal and geopolitical disputes remain unsettled.
The Movement urged Baghdad to safeguard Iraq’s maritime claims and natural resources through diplomatic and legal channels, criticizing “a fragmented response to disputes with neighboring states.” It also sought clarification from the Oil and Foreign ministries on projects that could overlap with areas claimed by Iraq.
Read more: Khor Abdullah: A waterway entangled in sovereignty disputes
It proposed forming a national team of diplomatic, maritime, legal, and technical experts to examine boundaries and resources, document Iraq’s claims, and engage international bodies where necessary, while avoiding “uncalculated escalation.”
The concerns also extend to Baghdad’s submission of maritime coordinates and a map to the United Nations, which drew objections from Gulf states. Iraqi authorities maintain that the filing is grounded in domestic legislation, international law, and the 1982 UN Convention on the Law of the Sea.
Khor Abdullah and Tuwaynah Disputes
Iraq and Kuwait signed the Khor Abdullah agreement in 2012 to regulate navigation and security in the shared waterway, Iraq’s only maritime access to the Gulf and a route linking key ports including Umm Qasr and Grand Al-Faw, with international shipping lanes.
Based on United Nations Security Council Resolution 833 (1993), which defined post-Gulf War borders, the agreement remains controversial in Iraq, particularly after the Federal Supreme Court ruled in 2023 that its ratification was unconstitutional, reigniting debate over sovereignty, economic interests, and maritime rights.
The offshore Dorra gas field, known in Iraq as Tuwaynah, is subject to competing regional claims. Kuwait and Saudi Arabia agreed in 2022 to jointly develop it, while Iran claims rights to part of the field. Iraqi lawmakers have also questioned the country’s maritime boundaries and potential rights in the area.
Read more: Iraq’s UN maritime move reopens Arab fault lines over Khor Abdullah
https://www.shafaq.com/en/Iraq/Basra-movement-Kuwait-gas-project-could-affect-maritime-claims