Iraq Economic News and Points To Ponder Thursday Evening 9-10-26
The Dinar Must Be Changed! We Won't Remove Zeros, But The Current Currency Will Not Last
2026-09-09 |964 Following banking warnings that money hoarded in homes and outside banks is disrupting the liquidity cycle and weakening the banking system, an idea is emerging within the Central Bank and among members of the parliamentary finance committee to change the currency and launch a new series, instead of removing zeros, in a process aimed at withdrawing counterfeit, worn-out, and stolen currency, and returning part of the funds to the banking system, through a mechanism being discussed to link the exchange of large sums to opening accounts and proving the sources of funds.
A member of the parliamentary finance committee told 964 Network that “the ongoing discussions regarding the future of the Iraqi currency are currently focused on adding new denominations and making broader changes to the currency in circulation. The option of removing zeros has been ruled out at this stage.
There is a trend that believes issuing a new series of currency can achieve greater goals, including updating security features, eliminating counterfeit currency, withdrawing worn-out banknotes, addressing some of the stolen currency or funds moving outside the financial system, in addition to reorganizing the circulating money supply.”
The MP, who asked to remain anonymous, added that “one of the most important ideas under discussion relates to the method of replacing the old currency. There are proposals to facilitate the replacement of ordinary amounts, while subjecting large amounts to different banking procedures, which may include opening a bank account, depositing the amount into it, and applying customer knowledge and verification requirements for the source of funds, instead of handing over the same amount in cash from the new issue.
These details, including determining the size of the amount subject to these procedures, are still under discussion and have not been finalized, as they currently revolve around 100-150 million.”
He added that “the success of any project of this kind requires a sufficient transition period, ensuring that markets are not disrupted, and putting in place easy mechanisms for citizens and owners of natural savings, as well as the readiness of banks to receive deposits and deal with the expected large demand, because the goal in the end is not just to replace one piece of paper with another, but to take advantage of the currency change to rearrange a part of the monetary cycle and enhance confidence in the banking system and the ability to monitor the movement of funds.”
100 Trillion Outside The Banks
The importance of changing the currency is highlighted by the fact that there are more than 100 trillion dinars outside the banks, distributed between daily transactions and the funds hoarded by citizens and companies, which indicates – according to experts – the weakness of cash entering the banking system, and makes the exchange process an opportunity to return part of these funds to the accounts, especially if changing large amounts is linked to proving their sources.
Recently, Ali Abdul-Ridha Alwan, director of the Trade Bank of Iraq (TBI), warned that keeping more than 85% of the money supply outside the banking system disrupts the liquidity cycle. He explained that citizens keeping money at home deprives banks of the liquidity they need to perform their role in economic activity and creates a disruption in the chain that begins with the injection of money through financial institutions and ends with spending and paying salaries.
What Are The Gains From The Process?
A member of the Finance Committee says that “the initial estimates circulating regarding the results of the currency change indicate the possibility of recovering the equivalent of 20-25 trillion dinars of the cash mass that is not currently moving normally within the financial system, whether due to worn-out or counterfeit currency or hoarded funds, which would allow for the reorganization of an important part of the monetary cycle.”
He added that “estimates also assume that the replacement process will push large numbers of citizens to deal with banks and open accounts, and there are perceptions that about 25% of money owners who enter the banking system for the purpose of changing the currency may leave all or part of their money in their accounts instead of withdrawing it again in cash, which means increasing deposits, enhancing liquidity within banks, and returning part of the hoarded money to the banking cycle.” https://964media.com/715480/
Iraq Postpones High Level 2027 Budget Drafting Meeting
Mohammed Jangadost
At a Glance:
The meeting of Iraq’s high committee tasked with drafting the 2027 federal budget has been delayed until early next week.
Despite the postponement, the committee maintains its target to finish writing the draft law by September 15 for submission to the Council of Ministers.
The Iraqi Ministry of Finance stressed that full financial transparency and rigorous revenue auditing are strict prerequisites for finalizing the text.
Following federal cabinet review and approval, the bill is scheduled for transmission to the Council of Representatives on October 10 for official readings and voting.
The meeting of Iraq’s high committee tasked with drafting the 2027 federal budget bill has been postponed to early next week, narrowing the remaining window for technical teams to finalize the text. Despite the delay, government officials reaffirm that the drafting process, which officially launched on August 27 in Baghdad, remains on track to meet its September 15 deadline for Council of Ministers review, ahead of a scheduled submission to parliament on October 10.
Key Statements and Focus Area:
High Budget Drafting Committee Member:
"Although the committee meeting was originally scheduled for today, the decision was made to postpone sessions until early next week. The committee remains fully committed to completing the draft law by September 15 and presenting it to the Council of Ministers for an official vote before legal submission deadlines expire."
Key Milestones and Timeline for Iraq's 2027 Federal Budget
Legislative Phase Target Date / Window Key Action & Operational Directive
Drafting Launch August 27, 2026 Technical sessions convened in Baghdad across federal ministries.
High Committee Meeting Early Next Week (Postponed) Reconciliation of ministry revenue data and expenditure caps.
Draft Completion Target September 15, 2026 Finalization of legal text for submission to the Council of Ministers.
Cabinet Approval Vote Late September 2026 Council of Ministers endorsement of the program-and-performance draft.
Parliamentary Transmissionn October 10, 2026 Formal forwarding to the Council of Representatives for final readings.
Transparency Mandates and Revenue Auditing
The Iraqi Ministry of Finance has underscored that establishing data transparency and complete revenue auditing across all governorates and federal entities is non-negotiable for the 2027 bill. By shifting toward a program-and-performance framework, the ministry aims to verify all regional non-oil receipts, domestic fuel allocations, and public sector employment numbers before locking figures into the final bill.
Strict Statutory Deadlines
Postponing the high committee meeting leaves a tight timeline for technical groups to digest structural inputs, including the KRG’s 10-point entitlement package. However, federal leaders emphasize that completing the draft by September 15 is vital to allow the Council of Ministers sufficient time to debate and approve the measure before the October 10 deadline to send the text to parliament.
FYI
While short delays in high committee meetings reflect ongoing procedural haggling over spending caps and data auditing, the government's commitment to the September 15 drafting mark shows a resolve to avoid past legislative impasses. Adhering to the October 10 parliamentary deadline will be crucial to restoring fiscal predictability and securing timely public sector payrolls for 2027. https://channel8.com/english/news/65413
No Loans Or Advances... Government Banks Have No Liquidity
2026-09-10 03:58 Shafaq News - Baghdad An informed source revealed on Thursday that most government banks have stopped granting loans and advances of all kinds, attributing this to the lack of financial allocations and the lack of sufficient liquidity in those banks .
The source told Shafaq News Agency that the decrease in the volume of deposits and the decline in liquidity levels have directly affected the ability of government banks to provide loans and advances, as well as investment loans allocated to finance projects and residential complexes in Baghdad and the provinces .
He added that the decline in banking liquidity has reduced the ability of banks to continue financing various credit and investment activities, which may affect the flow of financing and support for housing and development projects .
https://www.shafaq.com/ar/اقتصـاد/لا-قروض-ولا-سلف-المصارف-الحكومية-بلا-سيولة