Iraq Economic News and Points To Ponder Tuesday Evening 6-16-26
Al-Zaydi's Advisor Told Kurdistan 24: There Are No Plans To Raise The Dollar Exchange Rate.
Erbil (Kurdistan24) – An advisor to the Iraqi Prime Minister denied all reports circulating about the government's intention to raise the exchange rate of the dollar against the dinar to address the current financial crisis. He indicated that although the closure of the Strait of Hormuz has significantly harmed the country's revenues, the government will not resort to increasing the dollar's value.
The Iraqi Prime Minister's economic advisor, Mazhar Muhammad Salih, told Kurdistan 24 that Iraq's current financial challenges are directly linked to regional conflicts and tensions, as well as the closure of the Strait of Hormuz. He explained that approximately 85% of Iraq's oil was exported daily through this strait to global markets, and therefore, the disruption of this vital waterway has significantly reduced the government's financial capabilities.
Ali al-Zidi’s advisor denied rumors that the government wanted to adjust the exchange rate, saying: “At this stage, the Iraqi government has no plans to raise the dollar exchange rate. Rather, all efforts and discussions are focused on finding alternative mechanisms to overcome this current situation.”
These statements by Mazhar Muhammad Salih come after reports circulated by some Iraqi media outlets in the past few days, indicating the federal government’s intention to raise the exchange rate of the dollar against the dinar again as a step to confront the current challenges and financial crisis. https://www.kurdistan24.net/ar/story/920276/مستشار-الزيدي-لـ-كوردستان-24-لا-توجد-أي-خطط-لرفع-سعر-صرف-الدولار
Speculation And Scarcity Drive Iraqi Dinar Lower As Baghdad Rejects Devaluation Fears
While the closure of the Strait of Hormuz chokes oil revenue, currency markets in Erbil and Baghdad grapple with a dollar shortage and a wave of disruptive rumors
ERBIL (Kurdistan24) - In the bustling corridors of Erbil's currency bazaar, the rhythmic exchange of notes has taken on a frantic pace as the U.S. dollar climbs sharply against the Iraqi dinar. On Tuesday, the local market was defined by a volatile mix of genuine scarcity and a feverish wave of speculation, leaving traders and citizens alike struggling to find firm footing in an increasingly unstable financial landscape.
The immediate source of the tremor appears to be a sudden tightening of dollar liquidity originating in Baghdad. Mam Sayid, a prominent currency exchanger in Erbil's bazaar, told Kurdistan24 on Tuesday that the primary driver behind the dollar's surge is a physical shortage of the currency.
While the Central Bank of Iraq (CBI) continues to sell dollars, Sayid noted that the pace is depleting national reserves at a concerning rate.
The resulting anxiety is manifesting in sharp price fluctuations.
According to Sayid's 24-hour market update, the exchange rate moved from approximately 154,000 IQD per $100 on Monday morning to as high as 156,000 IQD by Tuesday.
This rapid depreciation has been further fueled by a persistent rumor that the Central Bank intends to raise the official exchange rate to 142,000 IQD, a move that would effectively codify a devaluation of the national currency.
Sayid was emphatic that the disruption is a product of policy uncertainty in the capital rather than local conditions in the Kurdistan Region.
The fiscal squeeze is undeniable, and its roots are deeply anchored in the region's geopolitical volatility. Iraq's financial health is inextricably tied to its oil exports, and the recent conflict has dealt a staggering blow to the state's revenue streams.
Mazhar Mohammed Salih, a senior economic advisor to Iraqi Prime Minister Ali al-Zaidi, recently provided Kurdistan24 with a stark assessment of the crisis.
He explained that the ongoing closure of the Strait of Hormuz, the maritime chokepoint through which 85 percent of Iraq's oil once flowed daily, has severely restricted the government's financial capacity.
However, Salih moved decisively to quell the market's worst fears. In an interview with Kurdistan24, he categorically denied reports that the government plans to officially devalue the dinar to offset the revenue shortfall.
"At this stage, the Iraqi government has no plans to raise the value of the dollar," Salih stated, characterizing reports of an impending hike as baseless.
He noted that the administration is instead aggressively pursuing alternative economic mechanisms to navigate the current fiscal crunch without resorting to a policy-led increase in exchange rates.
Despite these official reassurances, the psychology of the bazaar often moves faster than the directives from the Prime Minister's office.
In a highly dollarized economy like Iraq's, rumors of a pending rate change often become self-fulfilling prophecies.
Traders, anticipating a more expensive dollar tomorrow, hoard their current holdings today, thereby strangling supply and driving prices up in a classic speculative loop.
The shift in market demand also reflects broader regional alignments. Mam Sayid revealed that while the dollar dominates the conversation, demand among traders has become concentrated on the Iranian toman.
Meanwhile, traditional trading in other major international currencies, such as the euro, the British pound, and the Chinese yuan, has effectively stalled. This stagnation in non-dollar trading highlights the unique, almost singular importance of the U.S. currency to Iraq's domestic stability and its ability to pay for essential imports.
The implications for the average Iraqi are significant.
A rising dollar translates directly into higher costs for imported goods, from basic foodstuffs to electronics and medicine, eroding the purchasing power of families already strained by the wider regional conflict.
For the al-Zaidi government, the challenge is twofold: they must manage a genuine liquidity crisis born of suppressed oil exports while simultaneously conducting a war of words against the rumors that threaten to unanchor the currency.
As the markets wait for a definitive sign of stability, predicting the dinar's trajectory remains a difficult task for even the most seasoned observers.
For Mam Sayid and his fellow traders in Erbil, the immediate future is a waiting game. Until the underlying scarcity is resolved and the "142,000" rumor is fully exorcised from the public consciousness, the Iraqi dinar will likely remain at the mercy of the prevailing winds blowing from Baghdad and the volatile waters of the Gulf.
Summary
Iraq’s dinar has slipped as a dollar shortage and rumors of a rate hike hit markets. While Prime Minister Ali al-Zaidi's advisor denied devaluation plans, citing the Strait of Hormuz closure as the root fiscal cause, speculation has driven exchange rates toward 156,000 IQD per $100.
Finance Minister: We Are Proceeding With The Implementation Of A Package Of Reforms Aimed At Maximizing Non-Oil Revenues.
Time: 2026/06/16 15:23:39 {Economic: Al-Furat News} Finance Minister, Faleh Sari, confirmed on Tuesday the continuation of implementing a package of reforms aimed at maximizing non-oil revenues.
The media office of the Minister of Finance stated in a statement received by Al-Furat News that “the Minister of Finance, Falih Sari, received today, Tuesday, the Assistant Secretary-General of the United Nations Development Programme (UNDP), and the Regional Director for Arab States, Abdullah Al-Dardari.”
He added that "during the meeting, the government's priorities for the next stage were reviewed in light of the current economic challenges."
According to the statement, the minister affirmed that "the ministry is proceeding with the implementation of a package of reforms and measures aimed at maximizing non-oil revenues, developing financial management, and advancing automation projects and the shift towards program and performance budgeting, in order to enhance spending efficiency and raise the level of financial performance."
He pointed to "the importance of partnership with international institutions in supporting development programs, and benefiting from technical expertise in implementing the government's economic and financial priorities."
For its part, the United Nations Development Programme delegation welcomed the “establishment of the Financial Stability Board,” expressing “the Programme’s readiness to support the Iraqi Development Fund and contribute to supporting development projects through local funds in the southern governorates and liberated areas, in a way that contributes to improving the service situation and supporting development opportunities in those areas.”
https://alforatnews.iq/news/وزير-المالية-ماضون-بتنفيذ-حزمة-إصلاحات-تهدف-لتعظيم-الإيرادات-غير-النفطية
Easy Money Or Postponed Reform? An Expert Warns Against Treasury Transfers Becoming A Permanent Cover For The Government's Deficit.
Baghdad Today – Baghdad Economic expert Ziad Al-Hashemi warned on Monday (June 16, 2026) against continuing to rely on the treasury transfer discount mechanism as a means of financing the government's financial deficit, considering that it has turned from a temporary financial tool to address crises into a means that contributes to postponing economic reforms and perpetuating waste and financial corruption.
Al-Hashemi said in a statement followed by “Baghdad Today”, that discounted treasury transfers are originally a financial procedure used in many countries around the world to provide liquidity when needed, but their use in Iraq has become so frequent that it raises concerns about its repercussions on financial stability and economic reform.
He explained that the Ministry of Finance resorts to issuing treasury bills to obtain the necessary liquidity to finance salaries and public expenditures when revenues decline, especially oil revenues, as some banks purchase these bills before their ownership is transferred to the Central Bank, which undertakes to pay their value.
He added that Iraqi governments, during periods of high oil prices and increased revenues, have become accustomed to expanding public spending and appointments without building sustainable solutions to financial imbalances, noting that the decline in revenues later pushes them to look for quick sources of funding instead of adopting reform measures to address the causes of the deficit.
He believed that the central bank’s continued provision of financing to the government through discounting treasury bills gives it a wide margin to overcome its financial crises without having to implement real reforms related to controlling spending, combating corruption, and reducing financial waste.
Al-Hashemi stressed that one of the keys to financial reform is strengthening the independence of the central bank and enabling it to make its monetary decisions away from government financial pressures, allowing it to refuse to finance the deficit repeatedly and pushing governments to look for more sustainable economic solutions.
He pointed out that closing the door to "easy financing" will force governments to reconsider spending priorities, maximize non-oil revenues, and improve the efficiency of public finance management, instead of continuing to rely on temporary financing tools.
He warned that continuing the current approach could lead to the entrenchment of problems of corruption, administrative inefficiency and financial waste, noting that financial resources and reserves should be managed in a way that achieves economic stability and preserves the rights of future generations, rather than being turned into a means of addressing recurring financial imbalances without radical reform. https://baghdadtoday.news/301419-.html
Gold Prices Rise In Baghdad And Erbil
2026-06-16 Shafaq News- Baghdad/ Erbil Gold edged higher in Baghdad and Erbil on Tuesday, hovering around 940,000 IQD per mithqal, according to Shafaq News market survey.
Wholesale prices on Baghdad's Al-Nahr Street recorded a selling price of 943,000 IQD per mithqal (equivalent to five grams) for 21-carat gold, including Gulf, Turkish, and European varieties, with a buying price of 939,000 IQD, up from Monday's 935,000 IQD.
The selling price for 21-carat Iraqi gold stood at 913,000 IQD, with a buying price of 909,000 IQD.
In jewelry stores, the selling price per mithqal of 21-carat Gulf gold ranged between 945,000 and 955,000 IQD, while Iraqi gold sold for between 915,000 and 925,000 IQD.
In Erbil, 22-carat gold was sold at 995,000 IQD per mithqal, 21-carat gold at 950,000 IQD, and 18-carat gold at 814,000 IQD. https://www.shafaq.com/en/Economy/Gold-prices-rise-in-Baghdad-and-Erbil-0
Dollar Rises In Baghdad, Stabilizes In Erbil
2026-06-16 Shafaq News- Baghdad/ Erbil The US dollar opened Tuesday’s trading mixed in Iraq, hovering around 155,000 dinars per 100 dollars.
According to Shafaq News market survey, the dollar traded in Baghdad's Al-Kifah and Al-Harithiya exchanges at 154,900 dinars per 100 dollars, up from the previous session’s 154,200 dinars.
In the Iraqi capital, exchange shops sold the dollar at 155,500 dinars and bought it at 154,500 dinars, while in Erbil, selling prices stood at 153,850 dinars and buying prices at 153,750 dinars.
https://www.shafaq.com/en/Economy/Dollar-rises-in-Baghdad-stabilizes-in-Erbil-4