Iraq Economic News and Points To Ponder Monday Afternoon 6-8-26
Iraq’s Central Bank Prints Trillions Of Dinars To Cover State Expenditures
Iraq Amr Salem June 7, 2026 Baghdad (IraqiNews.com) – The Central Bank of Iraq (CBI) issued around 25 trillion dinars to pay governmental expenditures, bringing the total money supply to 125 trillion dinars. According to media reports, the step took place to counter falling oil income caused by regional interruptions in petroleum shipments.
Iraq’s crude oil exports fell by 3.22 million barrels per day in May 2026, a loss of more than 97 percent, owing to continuous disruptions in marine traffic in the Strait of Hormuz caused by the war against Iran. The revenues generated from oil exports plummeted to $1.87 billion in April, a drop of roughly $5 billion from pre-war levels.
Given Baghdad’s near-total reliance on oil revenues to cover public spending, this dramatic cash outflow threatens to exacerbate the country’s structural fiscal imbalance.
The issuance of more banknotes has caused tremendous economic strain, fueling inflation and diminishing the purchase value of the local currency.
Iraqi Foreign Minister Fuad Hussein has cautioned that the step represents a short-term solution and that extended disruptions in oil shipments might jeopardize public-sector payrolls.
The government issued the 25 trillion dinars to avoid a short-term liquidity crisis, as Iraq’s economy is heavily reliant on oil exports.
The expansion of the money supply at a far quicker rate than economic development feeds inflation and distorts the national currency’s true value.
The CBI sought to stabilize the currency by setting an official exchange rate of 1,300 Iraqi dinars per US dollar for the government budget, but parallel market values remain much higher.
What's Happening In Iraq Wouldn't Happen In A Banana Republic... Al-Hashemi On The Contradiction In Official Statements
2026-06-07 | Baghdad – 964 Economic expert Ziad Al-Hashemi said that the chaos of official statements in Iraq confuses the scene and mixes things up. He referred to the intervention of the Central Bank Governor Ali Al-Alaq in the work of the government and his statement that salaries are secured, then the government’s intervention with the powers of the Central Bank when Foreign Minister Fuad Hussein revealed the printing of dinars to save salaries.
Al-Hashemi describes the contradiction in official statements with the phrase: “What is happening in Iraq, unfortunately, does not even happen in a banana republic.”
Foreign Minister Fuad Hussein revealed the printing of 25 trillion dinars in a statement yesterday, Saturday (June 6, 2026), in which he warned of a major financial crisis that would hit the country if the Strait of Hormuz remained closed.
About two weeks earlier, on May 21, 2026, the Central Bank Governor had confirmed that salaries were secured and that the government would cover the deficit through internal and external borrowing.
Al-Hashemi stated in a Facebook post, which was monitored by 964 Network , that “the chaos of statements in Iraq confuses the scene, mixes things up, and increases the state of uncertainty in a country suffering from an unprecedented exceptional financial situation.”
He continues: “After the Governor of the Central Bank of Iraq intervened weeks ago in the work of the government and made statements about salaries and the government budget deficit, today the new government came and intervened in the duties of the Central Bank and spoke about printing and injecting the dinar, the value of the dinar and controlling inflation.”
He adds: “This chaos of statements between the Central Bank and the government confirms that each authority does not adhere to its limits and does not respect the scope of work and responsibilities of the other authority. This does not even happen in banana republics, but unfortunately it happens in Iraq.”
He explains that “these transgressions in statements also indicate that the Iraqi authorities are facing an unprecedented and significant shock, which has made senior officials not know what to say and get involved in contradictory and undisciplined statements outside their jurisdiction.”
He points out that: “The Central Bank Governor says that salaries are secured by the government, the Foreign Minister confirms that the government is in a financial predicament in which it depends on the Central Bank printing dinars, and the government’s financial advisor talks about controlling inflation and improving the value of the dinar, even though injecting printed dinars will lead to a deterioration in the value of the dinar and raise inflation.”
He concludes his post by saying, “This is how the series of contradictory statements continues without the authorities presenting a unified and clear message to the public, which increases the level of concern that these authorities are unable to deal professionally with this unprecedented crisis, and raises the level of confusion in understanding the reality of the difficult situation that Iraq is going through.” https://964media.com/687616/
Clarification Statement Issued By The Central Bank Of Iraq
In light of what is being discussed regarding the printing of currency and financing public expenditures, the Central Bank of Iraq would like to clarify the following:
First, there is a fundamental and important difference between "discounting treasury bills" and "printing money," both technically and economically. Discounting bills provides temporary liquidity against an existing government debt instrument, which is repaid upon maturity.
This is an internationally recognized financial mechanism practiced by major central banks, with strict adherence to maturity dates.
"Printing money," on the other hand, is the issuance of new money without backing, injected directly into the economy. This leads to direct inflation and erosion of the currency's value. Furthermore, it is not repaid and represents a permanent monetary burden. This practice is strictly prohibited under the Central Bank of Iraq Law No. (56) of 2004.
Therefore, the simplistic description of the current operations as "printing money" does not reflect their true technical and financial nature.
Second: The Central Bank of Iraq affirms that its primary role is to manage monetary policy, maintain monetary and price stability, and ensure the soundness of the financial system, not to serve as a permanent channel for financing public expenditures.
The use of certain monetary and financial tools in exceptional circumstances is carried out in a controlled manner and in accordance with the requirements of the national economy, with utmost care taken to prevent financial pressures from escalating into permanent monetary expansion or inflationary pressures that would negatively impact citizens' purchasing power.
Third: The Central Bank of Iraq emphasizes that the management of cash is carried out in accordance with precise and strict controls within the framework of the law, and that any operations it undertakes are continuously evaluated for their effects to ensure that they do not negatively impact the objectives of the monetary policy set.
Fourth: Current circumstances highlight the importance of adopting long-term fiscal policies aimed at building sufficient financial buffers and safety margins to cope with economic shocks and volatile oil cycles, through diversifying the economy and sources of revenue, and managing public debt with high efficiency to reduce the impact of future crises and maintain overall economic stability.
In response to the economic news being reported by the media, the Central Bank affirms that it is proceeding with its strategy to support the Iraqi dinar and maintain monetary and economic stability.
Therefore, taking parts of the bank's routine procedures in this area and portraying them as dangerous measures is inaccurate. We call for accuracy when addressing these topics, especially those related to the local currency, its management and issuance mechanisms, and maintaining its value.
In this context, we emphasize that the Central Bank has daily procedures regarding currency management, and these procedures are largely consistent with the bank's ultimate goal of maintaining financial and economic stability.
Media Office - Baghdad, June 7, 2026 https://cbi.iq/news/view/3217
Al-Mashhadani: No New Currency Will Be Printed, And Liquidity Is Linked To Dollar Imports.
Time: 2026/06/07 19:23:14 {Economic: Al-Furat News} Economic expert Abdul Rahman Al-Mashhadani said that there is no printing of new currency, explaining that the Central Bank finances the government’s need for dinars within a financial mechanism that depends on the availability of dollars in the treasury.
Al-Mashhadani explained in a statement to Al-Furat News Agency that: “There is a three-way cycle that manages the movement of liquidity in the country, based on the government selling oil in dollars and transferring it to the Central Bank to finance the salaries of employees in Iraqi dinars, while the Central Bank works to sell dollars to traders to cover imports, which leads to the withdrawal of dinars from the market through commercial transactions, while citizens buy goods in dinars within the local market.”
He pointed out that "this cycle is disrupted when dollar flows resulting from oil exports decline or are interrupted, which prompts the central bank to compensate for the liquidity in dinars in exchange for treasury bonds, remittances, and government bonds," stressing that "this does not mean printing a new currency, but rather injecting liquidity within approved financial instruments."
Al-Mashhadani concluded by saying that "liquidity is still available at the Central Bank, and the monetary process is continuing," while warning of "a dangerous indicator represented by the decline in dollar imports, which may affect market stability if it continues."
Foreign Minister Fuad Hussein stated that the government was forced to print 25 trillion dinars to address the current financial crisis and cover employee salaries, warning of a financial catastrophe if the crisis continues.
The Central Bank of Iraq responded today, Sunday, in a statement clarifying the issue of currency printing, stressing that printing currency is prohibited by law and does not reflect the nature of ongoing operations.
The Central Bank confirmed in a statement that there is no new currency printing process, explaining that what is happening is related to discounting treasury bills as a government debt instrument that provides temporary liquidity that is recovered upon maturity, and it is an internationally recognized financial mechanism that central banks apply within their approved frameworks. To view the Central Bank's statement, click here.
https://alforatnews.iq/news/المشهداني-لا-طباعة-لعملة-جديدة-والسيولة-مرتبطة-بواردات-الدولار