Iraq Economic News and Points To Ponder Tuesday Evening 10-6-26
Iraq Considers Raising Official Dollar Rate To 1,500 IQD And Dropping Currency Zeros
Iraq Jawad Al-Samarraie October 6, 2026 Baghdad (IraqiNews.com) – Safaa Al-Jabri, member of parliament for the Al-Sadiqoun bloc and member of the Parliamentary Economic Committee, revealed that the federal government is reviewing a proposal to adjust Iraq’s official exchange rate from 1,310 dinars to 1,500 dinars per U.S. dollar, while advancing high-level deliberations to redenominate the national currency and potentially remove zeros.
Speaking in a televised interview, Al-Jabri projected that sovereign state revenues for the 2027 federal budget will surpass $110 billion, declaring that Iraq has successfully weathered the acute economic fallout triggered by past disruptions at the Strait of Hormuz and Basra export halts.
According to Al-Jabri, fiscal parameters for the upcoming national budget are being restructured on the back of rising non-oil customs and tax receipts, an unprecedented $8 billion to $10 billion generated from domestic petroleum sales, and projected crude oil export earnings exceeding $85 billion.
He noted that Iraqi crude sales currently benchmark around $80 to $82 per barrel, generating approximately $5 billion in monthly export revenues, providing budgetary headroom as trade bottlenecks and logistics gradually normalize.
Regarding currency and fiscal policy, Al-Jabri highlighted key government plans:
Official Exchange Rate Revision: Leaked preliminary drafts of the federal budget proposal—which carries a planned deficit between 25 and 30 trillion dinars—contain a formal submission from the Minister of Finance proposing to adjust the official statutory exchange rate to 150,000 dinars per $100 (1,500 IQD per USD). Al-Jabri noted that no binding cabinet decision has been finalized to date.
Currency Redenomination: Serious technical discussions are underway between the Prime Minister’s Office and the Central Bank of Iraq regarding currency redesign and the removal of three zeros. The measure is currently stalled only by legal jurisdictional reviews to identify the specific governing authority legally empowered to greenlight and execute the structural transition.
Critique of Past Budget Frameworks: Al-Jabri criticized previous administrations for populist fiscal practices, claiming that state budgets were prepared through rote copy-paste mechanisms for nearly twenty years under former Finance Minister Taif Sami, who had risen through the ministry ranks from director general of budget to minister.
Public Liabilities & Contract Terminations: The lawmaker highlighted structural financial arrears inherited by the treasury, including outstanding wheat procurement payouts owed to local farmers, unpaid rationing supply dues claimed by Al-Owais Company across 2025 and 2026, and 33 billion dinars in overdue liabilities tied to road and bridge construction. In response, Prime Minister Ali Faleh Al-Zaidi has canceled legacy public work contracts where execution progress remained below 20 percent.
The potential devaluation of the official dinar to 1,500 IQD per dollar represents an effort to narrow the spread with the parallel currency market—which recently traded above 160,000 dinars per $100—while curbing the planned fiscal deficit for the 2027 fiscal cycle. https://www.iraqinews.com/iraq/iraq-considers-raising-official-dollar-rate-1500-iqd-currency-zeros-2026/
Why Iraq's Dinar Keeps Sliding Despite Fresh US Cash
2026-10-06 Shafaq News- Baghdad (Updated at 16:58) The US dollar has climbed above 1,630 Iraqi dinars on Iraq's parallel market, about 21% above the official retail rate of 1,320, even as new shipments of US cash arrive to ease liquidity. Bankers and economists told Shafaq News the extra dollars alone are unlikely to close the gap while speculation, policy confusion and demand outside the banking system persist.
Iraq runs two exchange rates: an official one, at which the Central Bank of Iraq (CBI) sells dollars through banks for trade, travel and other approved needs, and a parallel street rate set by supply and demand. Traders on the parallel market quote prices per $100, and the rate passed 160,000 dinars on Monday.
Demand for dollars far exceeds supply, according to economist Ali Daadoush. He pointed to speculation and uncertainty, delays in official bank transfers, and rising demand to pay for imports from Iran. Much of the cash circulating on the parallel market, he said, starts as dollars sold at the official rate to Iraqis for travel, study and medical treatment, which are then resold locally, pushing the rate higher and making it more volatile.
Demand is also coming from travelers and from traders who prefer not to import through ASYCUDA, the electronic customs system Iraq uses to track imports, said economist Abdul Rahman al-Mashhadani, keeping steady pressure on the parallel rate.
New shipments can improve liquidity, but their effect on the parallel market depends on how quickly the dollars reach people with legitimate needs, said Nabil al-Abadi, managing director of the Union Bank of Iraq. “Narrowing the gap requires a stronger banking sector and easier access to foreign currency through official channels, so that fewer people turn to the street.”
The CBI's foreign reserves fell to $80.6 billion at the end of July 2026 from $97.4 billion at the end of 2025, a drop of about $16.8 billion, or 17.2%, in seven months, according to central bank data.
On September 19, the CBI said its reserves remained sufficient to finance foreign trade, settle bank-card payments and supply cash dollars to travelers at the official rate. It blamed the parallel market rise on speculation, market expectations and the exploitation of regional tensions.
Al-Mashhadani said that conflicting statements from members of parliament are adding to the uncertainty. “One member of parliament's finance committee has said the rate is fixed at 1,500 dinars per dollar, another has spoken of changing the currency, and a third of removing zeros from it,” he said, adding that none of these matters falls within lawmakers' powers, and with the market reacting quickly to any such talk, it was no surprise to see the dollar break 1,600.
In the Kurdistan Region, Jabar Goran, spokesman for Al-Sulaymaniyah's currency exchange market, likewise said decisions on the rate rest solely with the CBI. He warned of a backlash if the government set the rate at 1,500 dinars per dollar in the federal budget, though he did not expect it to do so. "The reaction of citizens and the market would be very negative," he told a press conference.
Expectations have become a force of their own. Fears of a stronger dollar push traders and individuals to buy in anticipation of further gains, adding to demand and widening the gap. Additional cash may ease pressure in the short term, bankers and economists say, but it is unlikely to hold the rate.
Read more: Experts: Iraq dollar gap reflects limited dollar access
https://www.shafaq.com/en/Economy/Why-Iraq-s-dinar-keeps-sliding-despite-fresh-US-cash
The Dollar Exchange Rate Set At 150,000 Dinars Per 100 Dollars For The 2027 Budget "Is Subject To Change."
Channel8 English @Channel8English Following the conclusion of the meeting between the Iraqi Finance Committee and the Minister of Finance, lawmaker and committee member Rebwar Karim told reporters that the dollar exchange rate set at 150,000 Dinars per 100 Dollars for the 2027 budget "is subject to change." https://x.com/Channel8English/status/2107414834333811063
Economic Warning Regarding Mps' Statements: They Will Increase Market And Dollar Instability In Iraq
Shafaq News - Baghdad Economic expert Abdul Rahman Al-Mashhadani predicted on Tuesday that the exchange rate of the dollar in the parallel market may exceed the 160,000 dinar mark per 100 dollars, given the continued high demand for foreign currency and conflicting statements regarding monetary policy and the exchange rate.
Al-Mashhadani explained in an interview with Shafaq News Agency that it is not surprising that the dollar exceeded the 160,000 mark, at a time when a member of the Finance Committee is stating that the exchange rate is fixed at 150,000 dinars, while another member is talking about changing the currency, and another about removing zeros, which are files that are not within the jurisdiction of the members of parliament.
He added that continuing such statements does not serve market stability, but rather increases uncertainty among citizens and those dealing in dollars, noting that the market is quickly affected by any talk related to the exchange rate or currency.
Al-Mashhadani continued, saying that the demand for the dollar remains high, especially from travelers and traders who do not want to import through the ASYCUDA system, which keeps the demand for foreign currency in place and puts additional pressure on the exchange rate in the parallel market.
Leaks Are Confusing The Market... Al-Khafaji Warns Against The Chaos Of Talk About Changing The Exchange Rate: Where Is The Dollar Headed?
October 6, 2026Last updated: October 6, 2026 The Independent/- The escalating controversy over the possibility of changing the dollar exchange rate has reopened one of the most sensitive economic files in Iraq, amid warnings that continued leaks and unofficial statements could push markets into further turmoil, even before any governmental or monetary decision is issued on the matter.
MP Mohammed Al-Khafaji warned of the repercussions of the repeated talk about changing the dollar exchange rate, stressing that presenting figures and predictions in the media and social media platforms, without an official decision, directly affects the movement of the market and impacts the expectations of traders, citizens and those dealing in foreign currency.
Al-Khafaji said in a post that the file of determining the exchange rate falls primarily within the powers of the Central Bank of Iraq and its Board of Directors, according to the Central Bank Law No. 56 of 2004, as amended.
He pointed out that Article 16 of the law grants the Central Bank’s Board of Directors the authority to formulate the policies necessary to achieve the objectives of monetary policy, including exchange rate policy, while Article 4 defines the bank’s responsibility for formulating and implementing monetary policy and managing foreign exchange policy in Iraq.
He explained that the Central Bank’s legal authority does not mean that a decision as significant as changing the exchange rate is taken in isolation from the government, given its broad impact on the general budget, prices, citizens’ purchasing power, and commercial activity.
According to Al-Khafaji, previous experiences have shown that there is coordination between the Central Bank and the government when making major decisions related to the exchange rate, while the financial impact of the decision is also linked to the general budget accounts, which need to be approved by the Cabinet and then legislated by the House of Representatives.
This controversy comes amid growing talk about the 2027 budget, and the circulation of different figures regarding the potential exchange rate that the government may rely on in calculating revenues and expenditures, without a final and official decision being announced yet.
Observers believe that the sensitivity of the issue lies in the fact that merely talking about reducing the value of the dinar or adjusting the official price could lead to an increase in demand for the dollar in the parallel market, especially if traders believe that an imminent change will occur in monetary policy, which may lead to speculation and a preemptive increase in prices.
Al-Khafaji criticized what he described as “the chaos of leaks, statements, and media scoops,” questioning the usefulness of circulating information related to the exchange rate before a clear official position is issued by the competent authorities.
The concerns are even more pronounced given that the price of the dollar in Iraq is linked to the prices of imported goods and the costs of trade and transportation, making any disruption in the parallel market likely to spread quickly to the prices of a large number of products and services.
Given the numerous statements and assessments regarding the future of the exchange rate, attention remains focused on the Central Bank and the government as the two entities capable of ending the uncertainty by announcing an official and clear position on monetary policy and the exchange rate in the next stage.
Al-Khafaji concluded his post with a striking question: “What is the dollar exchange rate now?”—a reference to the direct impact that leaks and political and media controversy can have on the market. The main question facing citizens and traders remains: Where is the dollar headed if talk of changing the exchange rate continues without an official decision