Iraq Economic News and Points To Ponder Late Sunday Evening 6-21-26
The Iraqi Government: There Are No Plans To Change The National Currency Or Remove Three Zeros From The Iraqi Dinar
The Iraqi government today reiterated that there are no plans to change the national currency or remove three zeros from the Iraqi dinar, while denying any intention to borrow externally to meet current economic challenges.
Government spokesman Haider al-Aboudi said in a statement that the news circulating about the imminent removal of three zeros from the Iraqi currency or the revaluation of the dinar and the adjustment of the dollar exchange rate is not based on any official decisions, stressing that the government does not have any project in this direction at the present time.
He added that the existence of quantities of printed banknotes is not related to procedures for changing the currency or modifying its value, noting that managing the money supply and determining its value are subject to the monetary policy of the central bank and the competent authorities.
Regarding the financial situation, Al-Aboudi stressed that the government does not intend to resort to internal or external borrowing to address the current pressures, explaining that what Iraq is going through falls under a temporary liquidity crisis imposed by recent regional changes, and not a structural financial crisis.
He pointed out that Iraq has significant economic potential and financial resources that enable it to overcome this stage, and that the government is continuously monitoring economic developments and taking measures to maintain financial stability and secure the state’s basic obligations. Added 2026/06/21 - 7:42 PM https://www.economy-news.net/content.php?id=70536
Al-Kinani Reveals A Government Plan To Raise The Dollar Exchange Rate To 165,000 Next September.
Baghdad Today – Baghdad On Sunday (June 21, 2026), MP Ahmed Salim Al-Kinani, from the State of Law Coalition, revealed an anticipated government plan to raise the exchange rate of the US dollar to between 160,000 and 165,000 Iraqi dinars per 100 dollars, instead of the current rate of 132,000 dinars.
Al-Kinani said in a press statement, which was followed by “Baghdad Today”, that “this measure, which is expected to be implemented in September of this year (2026), comes as a necessary step that the government resorts to in order to secure operational expenses, foremost among which are the salaries of state employees and allocations for the social welfare network.”
Al-Kinani warned of the "direct negative repercussions of this decision on the living conditions of citizens, especially those with limited income."
He pointed out that "this trend will coincide with the imposition of additional customs duties of (15%) and a sales tax of (3%), which will negatively and directly affect the purchasing power of the Iraqi citizen as a result of the expected rise in prices."
https://baghdadtoday.news/301852-165.html
Iraq Rejects External Borrowing, Bets On Alternative Revenues
2026-06-21 / 05:35 Shafaq News- Baghdad Iraq will not resort to external borrowing to address current financial challenges, government spokesperson Haider Al-Aboudi said on Sunday, stressing that the country's fiscal situation would be resolved through alternative measures.
He told Shafaq News that the Oil Ministry is pursuing a strategy to diversify revenue sources, pointing to the launch of a new exploratory well in northern Iraq as a step toward increasing state income.
Iraq's economy depends on oil for between 90% and 95% of state revenues, making any disruption to exports a direct challenge to financing government spending, including salaries, pensions, and social welfare programs.
Read more: Iraq's rentier economy: Risks and reforms
The recent conflict involving the United States, Israel, and Iran disrupted shipping through the Strait of Hormuz, reducing Iraqi exports to less than 800,000 barrels per day and causing estimated losses of $128 million daily, according to Eco Iraq.
Read more: Iraq’s oil bottleneck: Abundance trapped by dependency
https://shafaq.com/en/Economy/Iraq-rejects-external-borrowing-bets-on-alternative-revenues
Dollar Gap Persists Despite Official Rate As Iraq Awaits Customs Reforms And Washington Talks
Mohammed Jangadost Despite the Central Bank of Iraq maintaining the official exchange rate of the Iraqi dinar, a significant gap between the official and market rates of the U.S. dollar continues to raise concerns among traders, businesses, and citizens, while attention increasingly turns to the implementation of the ASYCUDA customs system and upcoming economic discussions in Washington.
Persistent Gap Between Official and Market Rates
During the first half of the year, the Iraqi dinar experienced continued volatility against the U.S. dollar, with the market exchange rate fluctuating between 150,000 and 155,000 dinars per $100. In contrast, the Central Bank of Iraq has maintained the official exchange rate at 132,000 dinars per $100.
The discrepancy of approximately 23,000 dinars between the official and parallel market rates has fueled uncertainty among importers and consumers. Market participants are closely watching whether the implementation of new customs and trade procedures will help reduce the dollar's market value below 150,000 dinars or whether continued pressures could push the exchange rate toward 160,000 dinars per $100.
Government Position and Washington Discussions
The Iraqi government has not issued any official statement regarding a possible adjustment to the dinar's exchange rate. Economic issues are expected to feature prominently during upcoming discussions in Washington, where Iraqi officials are anticipated to address financial challenges, budgetary pressures, and measures to strengthen the country's monetary stability.
Government advisers have stated that no formal discussions are currently underway regarding a devaluation of the dinar, despite previous recommendations from some international financial institutions that exchange-rate adjustments could help address fiscal imbalances.
Budget Deficit Pressures
Iraq is facing mounting fiscal pressures amid regional instability and disruptions to global energy markets. According to official estimates, the country recorded a budget shortfall exceeding 6.6 trillion dinars during the first four months of the year.
While adjusting the exchange rate is viewed by some economists as a potential means of reducing the budget deficit and securing government salary payments, such a move carries considerable risks, including higher inflation, increased consumer prices, and greater pressure on household incomes.
Inflation and Demand for Dollars
Inflationary pressures have also intensified. Iraq's annual inflation rate stood at 2.2 percent in April before rising to 4.3 percent in May, reflecting increasing costs in several sectors.
Demand for U.S. dollars remains elevated, with approximately 85 percent of market demand linked to commercial imports and trade activities. The remaining demand comes from individuals seeking dollars for personal needs, including mortgage and vehicle payments, travel expenses, and savings.
ASYCUDA System Seen as Potential Solution
Business leaders believe the implementation of the ASYCUDA customs system could help ease pressure on the foreign exchange market by facilitating access to official dollars for importers.
Aram Baban, a member of the Chamber of Commerce, said the participation of Kurdistan Region traders in the Central Bank's electronic platform remains slow, forcing many businesses to purchase dollars through the parallel market at rates reaching 155,000 dinars per $100.
Meanwhile, Nawzad Sheikh Kamil, Director General of Trade in the Kurdistan Region, said regional authorities have submitted a memorandum to Baghdad seeking the implementation of the ASYCUDA system.
Under the proposed arrangement, traders in the Kurdistan Region would no longer need to travel to Baghdad to complete currency transactions. Instead, after submitting invoices and required documentation, they would be able to obtain dollars at the official exchange rate within the region, a measure officials believe could help reduce demand in the parallel market and contribute to lowering the market price of the dollar.
Economists and market participants are now closely watching both the implementation of the new customs system and the outcome of upcoming economic discussions with U.S. officials, which could play a significant role in shaping Iraq's exchange-rate outlook in the months ahead.
Dollar Gap Persists Despite Official Rate as Iraq Awaits Customs Reforms and Washington Talks
https://channel8.com/english/news/60241
Unified Iraq, Kurdistan Region customs system to boost economy: Iraqi PM advisor
Jun. 20, 2026 • "Its effects extend in the medium term to improving the business environment, enhancing investor confidence and reinforcing the principle of the unity of the Iraqi market," said Madher Mohammed Salih.
ERBIL, Kurdistan Region of Iraq - A financial advisor to Iraqi Prime Minister Ali al-Zaidi on Saturday said that unifying the customs systems between the federal government and the Kurdistan Region will strengthen Iraq's economic reform program and improve the management of non-oil revenues, coming after Baghdad and Erbil reached a technical agreement on the implementation of the ASYCUDA apparatus.
“The importance of unifying customs systems lies in reducing cases of customs evasion resulting from differences in procedures and tariffs between border crossings,” Madher Mohammed Salih told Iraqi state media.
The comments come days after representatives from the Kurdistan Regional Government (KRG) and the Iraqi federal government reached a technical agreement on implementing the Automated System for Customs Data (ASYCUDA) at border crossings in the Kurdistan Region.
The two sides agreed on a draft mechanism during talks in Baghdad, though several issues remain unresolved, and the agreement still requires approval by Iraq's Ministerial Council for Economy.
Salih added that the measure would also improve the “collection of trade data by creating unified databases for imports and exports,” providing policymakers with more accurate information and supporting more effective economic and financial policies.
He said implementation would require “adopting unified electronic systems for customs collection and clearance” and linking border crossings to a central database capable of tracking goods in real time, alongside greater coordination between federal and regional authorities.
The reform would help increase non-oil revenues by expanding the customs base, reducing financial leakages, and closing loopholes that have allowed inconsistencies in fees and procedures, he added.
“Its effects extend in the medium term to improving the business environment, enhancing investor confidence and reinforcing the principle of the unity of the Iraqi market,” the financial adivsor concluded.
ASYCUDA is a wholly digitalized border control system whose software was developed by the UN Conference on Trade and Development (UNCTAD).
According to its website, the mechanism "handles manifests and customs declarations, along with accounting, transit and suspense procedures. It also generates trade data that can be used for statistical economic analysis."
The federal government have already adopted the system, with Erbil having previously requested more time before agreeing to implement it on Thursday should the technical agreement be approved.
One of the main outstanding disputes is Baghdad's proposal that all customs revenues be transferred to the federal treasury before a portion is returned to the Kurdistan Region, a plan Erbil has yet to endorse, wishing instead that the Region will receive the full sum before depositing the adequate amount to the Iraqi exchequer.
Iraqi Finance Minister Faleh al-Sari previously described the unification of customs systems with the Kurdistan Region as “a strategic step aimed at increasing revenues, strengthening oversight, and reducing
https://thenewregion.com/posts/5678
An Economy On The Brink Of Oil Dependency: Calls To Break Free From Rentierism And Save Iraq From Market Shocks - Urgent
Baghdad Today – Baghdad Economic experts warn against Iraq’s continued reliance on oil as the almost sole source of funding for the public treasury, stressing that the absence of effective plans to diversify revenues has kept the country hostage to the fluctuations of energy markets and has reinforced the fragility of the rentier economy in the face of financial crises.
MP Mukhtar al-Moussawi told Baghdad Today on Sunday (June 21, 2026) that Iraq still relies on oil for nearly 90% of its treasury revenues, despite repeated warnings about the dangers of this dependence, especially with the sharp fluctuations in crude oil prices that have caused great pressure on the general budget in recent years.
Salaries Are Eating Up The Budget
Al-Moussawi explained that employee salaries account for the largest share of government spending, which increases the fragility of the financial situation and reduces the state's ability to direct funds towards development and investment projects.
He pointed out that raising the percentage of non-oil revenues to 30% of GDP has become an urgent necessity, and should reach 40% in the future to build a more balanced economy capable of facing crises, stressing that corruption and financial waste are still among the most prominent obstacles to economic reform.
Outlets, Taxes, And Wasted Resources
For his part, economist Ali Al-Masoudi confirmed on Saturday (June 20, 2026) that non-oil revenues are still below the desired level despite the measures announced by successive governments during the past years.
He added that activating electronic automation, reforming the work of border crossings, developing the tax system and addressing corruption in customs institutions could significantly increase the volume of public revenues and provide stable financial resources away from the fluctuations of oil prices.
Weak Oversight
Al-Masoudi explained in a statement to “Baghdad Today” that the absence of accurate databases and weak financial oversight lead to significant losses in public revenues, questioning the size of resources generated from border crossings, taxes, and government fees, and the extent of their actual impact on the level of services provided to citizens.
He stressed that tackling corruption and making bold decisions to manage financial resources are essential conditions for any real economic reform, warning that continued dependence on oil will keep the Iraqi economy vulnerable to financial shocks no matter how much oil revenues temporarily rise.
For decades, Iraq has relied on oil export revenues to finance the bulk of its public budgets, while the contribution of other productive sectors, such as agriculture, industry and tourism, to the gross domestic product remains limited.
With the recurring crises related to fluctuating global oil prices, calls are escalating for the adoption of comprehensive economic reforms aimed at diversifying income sources and enhancing non-oil revenues to ensure the stability of public finances and reduce dependence on a single resource. https://baghdadtoday.news/301802-.html