Iraq Economic News and Points To Ponder Tuesday Evening 10-20-26
The Iraqi Dinar Is The Second Worst-Performing Arab Currency; Dollar Pressures Pose A Difficult Test For Monetary Policy.
October 20, 2026 The Independent - The classification of the Iraqi dinar among the Arab currencies that have declined the most against the US dollar has raised widespread questions about the future of monetary stability in Iraq, and the ability of the Central Bank to contain the increasing pressures on the exchange market, at a time when the economy is facing challenges related to oil revenues, government spending and the heavy reliance on imports.
Data circulating and attributed to Bloomberg indicates that the Iraqi dinar ranks second in the Arab world in terms of poor performance, after the Libyan dinar. This development reflects the magnitude of the challenges facing monetary policy, but it does not necessarily mean that Iraq has the second weakest currency in the world in terms of its nominal value.
These indicators are of particular importance given the sensitivity of the Iraqi economy to dollar movements, due to the country's reliance on oil revenues denominated in US dollars, while local markets depend on imports to meet a large part of citizens' needs.
According to a report published by Asharq Bloomberg on October 19, 2026, the currencies of four Arab countries were among the worst-performing currencies since the beginning of the year. Data reports indicated that the Libyan dinar declined by 15.6%, followed by the Iraqi dinar at 14.2%. However, this ranking alone is insufficient to prove that the Iraqi dinar is the second worst-performing currency globally.
This classification comes after the decision taken by the Iraqi authorities on October 7 to amend the official selling price of the dollar to the public from 1320 to 1520 dinars, in response to the economic and financial conditions the country is going through, particularly the disruptions that have affected oil exports through the Strait of Hormuz.
Under the new pricing, the Ministry of Finance set the dollar purchase price at 1,500 dinars and the selling price to banks at 1,510 dinars, reaching 1,520 dinars for the end user. This represents an increase in the official dollar exchange rate of approximately 15.2%, while the dinar's value, when calculated in dollar terms, has decreased by about 13.2%.
From an economic standpoint, devaluing the dinar gives the government greater ability to convert dollar-denominated oil revenues into larger amounts in the local currency, which could help it finance salaries, operating expenses, and public obligations. However, these financial gains are offset by a cost borne by the consumer, due to higher prices for imported goods and a decline in the purchasing power of incomes denominated in dinars.
The danger of this shift lies in the fact that the Iraqi economy is heavily reliant on imports, including food, medicine, electrical appliances, and production inputs. Therefore, the increased cost of obtaining dollars could gradually be passed on to the prices of goods and services, even in sectors that do not directly deal in US currency.
In this context, economic experts who spoke to Asharq Bloomberg warned of the transfer of the effects of the exchange rate adjustment to local markets, with the possibility that some traders may resort to raising prices as a precaution in anticipation of further fluctuations, which may lead to increases that exceed the direct impact of the exchange rate change.
The challenges do not stop at the official rate, as the difference between the rate adopted by the central bank and the rates traded in the parallel market is an important indicator of the level of demand for the dollar and the extent to which official banking channels are able to meet market needs.
The wider the gap between the two exchange rates, the greater the pressure on traders, importers, and citizens, and the higher the likelihood of speculation and price volatility. Conversely, narrowing this gap requires consistent financing of foreign trade, strengthening confidence in banks, and providing clear mechanisms for obtaining foreign currency within legal frameworks.
Despite these pressures, the Central Bank of Iraq, when announcing the exchange rate adjustment, affirmed that its foreign reserves were sufficient to finance foreign trade, settle international bank card transactions, and meet the cash needs of travelers. This assertion indicates that the exchange rate adjustment does not necessarily mean that reserves have been depleted or that the country is unable to finance its imports.
Recent developments reveal a deeper economic problem: Iraq’s financial stability is linked to oil price movements and export volumes, while non-oil productive sectors contribute only to providing sustainable sources of foreign currency.
The heavy reliance on government spending also means that any decrease in oil revenues is quickly passed on to the general budget, and puts decision-makers in front of difficult choices regarding spending, borrowing, monetary policy and the exchange rate.
The future trajectory of the dinar is expected to depend on a number of key factors, most notably the regularity of oil exports, the volume of dollar revenues, the level of foreign reserves, the central bank’s ability to manage demand for dollars, and the government’s success in controlling spending and boosting non-oil resources.
If pressure on oil revenues persists and the gap between the official and parallel exchange rates widens, markets could face increased volatility and higher living costs. However, improved dollar inflows, stable exports, and strengthened confidence in the banking system could help alleviate these pressures without necessarily requiring a further adjustment to the exchange rate.
The ranking of the Iraqi dinar among the worst-performing Arab currencies during 2026 puts economic policy to a test that goes beyond simply defending the value of the currency, to include the state’s ability to protect the purchasing power of citizens and achieve a balance between the requirements of the budget and monetary stability.
The most important question remains: Does the decline of the dinar represent an exceptional measure imposed by economic circumstances, or is it an indication of structural imbalances that call for deeper reforms in the management of public finances, the banking sector, and the Iraqi economy?
Between these two possibilities, the movement of the dollar, commodity prices, and the level of oil revenues during the coming months will be crucial indicators for assessing the results of the decision and its repercussions on the economy and the citizen. https://mustaqila.com/الدينار-العراقي-ثاني-أسوأ-العملات-الع/
"Our Government Is A Government Of Honor And Integrity," Al-Zaydi Calls On The New Ministers To Combat Corruption And Change The Negative Perception Of The Political System
Baghdad - One News - 10/20/2026 Prime Minister Ali Faleh al-Zaidi affirmed that his government is based on the principles of honor, integrity, and serving the Iraqi people, stressing the need to prioritize national interests over personal and partisan interests, and to work on changing the prevailing negative view towards state institutions and the political system.
During the swearing-in ceremony of the new ministers and deputy prime ministers at the cabinet meeting, Al-Zaydi said that governmental responsibility requires a willingness to make sacrifices for the homeland, adding: “We want to offer our lives as a dowry for the country,” and stressing that his government is “a government of honor and integrity.”
The Prime Minister warned of the repercussions of having corrupt individuals within government institutions, noting that the entry of any corrupt official into the government damages its entire reputation and undermines citizens’ confidence in its performance and institutions.
Al-Zaydi pointed out that there is a perception among the public that the political system suffers from corruption, stressing that the responsibility lies with the government to prove otherwise through integrity in work and actual practice, and to show that the current government is not corrupt.
As part of expanding commitment to the principles of integrity and professional responsibility, the Prime Minister directed all governors and heads of independent bodies to recite the oath of honor, along with directors-general, thereby strengthening ethical and professional commitment across all levels of the state. https://1news-iq.net/حكومتنا-حكومة-شرف-ونزاهة-الزيدي-يدع/
Iraq Closes The Al-Shaib Border Crossing With Iran And Moves To Reduce The Number Of Open Crossings
Gray hair - One News - 10/20/2026 Sources from Al-Hadath TV reported the complete closure of the Al-Shaib border crossing between Iraq and Iran, amid government plans to close other border crossings between the two countries in the coming period.
According to the sources, Iraq is moving towards closing all border crossings with Iran except for two, in a move that would reduce the number of open crossings between the two sides.
No official details have yet been released regarding the other outlets included in the anticipated closure or the date of implementation of the measures, pending clarifications from the relevant government authorities. https://1news-iq.net/العراق-يغلق-منفذ-الشيب-الحدودي-مع-إيرا/
Iraq's Oil Exports To China Surge 248%
2026-10-20 / 03:58 Shafaq News- Baghdad/ Beijing China's crude oil imports from Iraq surged 248% from August to September, reaching 4.84 million tons, or about 1.18 million barrels per day (bpd), despite falling 19% year-on-year, according to Chinese customs data.
Read more: Iraqi oil exports recover after regional conflict
Russia remained China's largest crude supplier, shipping 9.94 million tons, or about 2.42 million bpd, up 20% from a year earlier but down 11% from August. Brazil supplied 5.15 million tons, or about 1.25 million bpd, an 18% annual increase, while Saudi shipments fell 62% to 2.70 million tons, or roughly 660,000 bpd.
Brazil also overtook Saudi Arabia as China's second-largest crude supplier in the first nine months of 2026, shipping 44.29 million tons compared with 43.12 million tons from the Kingdom.
Elsewhere, Chinese imports from Oman reached 1.22 million tons, or about 300,000 bpd, down 54% year-on-year but up 30% from August. Imports from Malaysia, a major transshipment hub for sanctioned Iranian oil, fell 70% year-on-year and 56% from August to 1.16 million tons, or about 280,000 bpd.
Chinese customs recorded no crude imports from the United States, Venezuela, or Iran in September, unchanged from the same month last year. https://www.shafaq.com/en/Economy/Iraq-s-oil-exports-to-China-surge-248
60 Million Dinars And No Interest .. Next January, The Launch Date Of The Housing Fund Loans
Money and business Economy News — Baghdad The Ministry of Construction, Housing and Public Municipalities will launch loans for the Housing Fund in January.
The official spokesman of the ministry, Eng. Astbaraq Sabah, said in a statement to the official newspaper that the ministry had already launched a link to apply for loans to the Housing Fund in Baghdad and the provinces at the end of last August, and applications for ten thousand borrowers were accepted, in addition to the walk of six thousand recycled transactions from last year.
He added that "the Housing Fund began after accepting the applications, the procedures for completing the transactions of borrowers through its own application on mobile phones, indicating that the total amount per loan reaches a maximum of 60 million dinars, according to the area of the property and the salary of the employee or sponsor, with the adoption of a repayment period of up to 15 years.
Sabah explained that "the Fund is self-funded, and therefore adopts a policy that focuses on opening the application link whenever the opportunity arises after collecting a certain amount of borrower installments and completing the administrative and technical procedures in this regard.
He pointed out that "the ministry has an action plan to launch loans during the next year according to the same period of repayment, pointing out that there is a large demand from borrowers because there are no interest only simple administrative loads not exceeding 2 percent of the value of the loan.
The ministry’s spokesman called on the former borrowers to abide by the payment of installments, because the amounts are being recycled for other beneficiaries, expressing his hope to launch initiatives to finance the fund in line with the government’s approach to support the housing sector. https://www.economy-news.net/content.php?id=75203