Iraq Economic News and Points To Ponder Tuesday Evening 1-13-26
The Ministry Of Interior Is Pursuing Dollar Speculators
First 2026/01/14 Baghdad: Sorour Al-Ali The Ministry of Interior intensified its efforts to protect economic security and pursue those manipulating the dollar exchange rate, taking action against (91) accused persons, in parallel with strengthening traffic control and developing roads, which contributed to reducing accidents by (33%) and organizing data for more than (12) million cars through a modern national electronic database.
The Ministry's spokesman, Brigadier General Miqdad Miri, said in a joint press conference held yesterday, Tuesday, with the Director General of the Traffic Directorate, Lieutenant General Dr. Uday Samir: that the legal procedures to prosecute those manipulating the price of the dollar included (91) defendants in various governorates, in addition to monitoring (104) activities related to imported food items to ensure consumer protection and market control.
On the traffic front, the Ministry confirmed that the efforts of the General Directorate of Traffic contributed to a 33% decrease in accidents during 2025 compared to 2024, along with a reduction in traffic fatalities through monitoring common violations, most notably using a mobile phone while driving and inattentiveness. The measures included regulating traffic on internal and external roads through 473 traffic centers and 1,354 field vehicles, addressing accident black spots, and designating safer lanes.
As part of the digital transformation, information on more than (12) million vehicles was registered and standardized in the national database and linked to the national system, in addition to activating electronic booking and issuing license plates through (27) traffic sites, which contributed to improving discipline and facilitating procedures.
For The Citizens.
The Director General of Traffic, Lieutenant General Uday Samir, confirmed that all these steps aim to enhance economic and traffic security, raise awareness of the laws, and ensure the safety of citizens on the roads, while continuing to follow up on violators firmly. https://alsabaah.iq/126442-.html
Experts: The Rise In The Parallel Market Exchange Rate For The Dollar Is Temporary.
Economic 2026/01/07 Baghdad: Hussein Thagab and Anwar Ayed The parallel exchange market in Iraq witnessed a significant increase in the dollar exchange rate against the dinar in recent days, reaching around 149,000 dinars per 100 dollars, which had a "slight" impact on the prices of various goods and materials.
Despite the rise in “parallel exchange rates”, specialists confirm that these surges are “temporary” and do not pose any economic concerns at all, especially with the precautionary measures taken by the “monetary authority” to absorb the severity of the rise.
The Prime Minister’s financial advisor, Dr. Mazhar Muhammad Saleh, had previously described the fluctuation in the exchange rate as “temporary” and not reflecting a structural imbalance, especially since it had practically become detached from the level of income and consumption.
Structural Factors
Economic and financial expert, Dr. Nabil Al-Abadi, believes that this phenomenon is not a coincidence or the result of a single factor, but rather the result of a complex interaction between a number of structural and circumstantial factors, internal and external, which can be analyzed into three reasons: internal structural and institutional factors, market behaviors and speculation, and external restrictions and influences.
Al-Abadi explained in an interview with Al-Sabah that, with regard to internal structural and institutional factors, the Iraqi economy is a mono-type economy, as oil revenues constitute the main source of hard currency, noting that this framework makes the balance of payments and the exchange rate highly vulnerable to the fluctuations of global oil markets.
Single Economy
Al-Abadi added that, on the monetary front, policies aimed at de-dollarization, which are essential for long-term monetary sovereignty, are being implemented rapidly. However, this implementation has been accompanied by stricter controls on dollar sales and remittance channels, leading to a reduction in supply through semi-official channels and pushing a significant portion of demand towards the parallel market.
Furthermore, the weakness of the private productive sector, whether industrial or agricultural, means the absence of an alternative domestic source of foreign currency beyond oil revenues, depriving the economy of a crucial lever for exchange rate stability.
In addition, recent developments in the customs system, particularly the requirement for prior documentation under the ASYCUDA system to obtain dollars at the official rate, have disrupted normal trade flows. He explained that this complexity and delay have driven a number of traders, especially medium-sized ones, to resort to the parallel market to finance their urgent transactions, thus increasing actual demand there.
Market And Speculation
Al-Abadi added that, regarding market behavior and speculation, in the absence of attractive and effective regulatory investment channels, a portion of local liquidity tends to be used for exchange rate speculation as a means of achieving quick profits. He explained that this speculation is often fueled by information noise and rumors, which amplifies short-term volatility. Informal practices have also been observed within the parallel market itself, such as price discrimination between different denominations of the same US dollar, indicating distortions in the market's operational mechanisms.
Regarding the third factor, “external restrictions and influences,” the financial and economic expert said that currency transfers through official Iraqi banking channels are facing increasing difficulties, especially when it comes to neighboring countries subject to international sanctions regimes.
He noted that this reality pushes the commercial sector’s need to transfer through these channels to the parallel market, creating additional structural demand. Moreover, the impact of the general regional and international geopolitical climate cannot be ignored, as any tensions lead to an increase in demand for hard currencies as a safe haven, which is reflected in the markets of fragile countries.
The impact of rumors
Al-Abadi added that in response to this analysis, official bodies are presenting a different narrative, focusing on the transient nature of this rise, as government officials describe it as “emergency and temporary,” and a result of rumors that can be contained, while emphasizing the stability of the official price at 1320 dinars to the dollar as a basic anchor. It is also believed that the reform measures in customs and the banking sector will soon begin to show their positive results.
He stressed that from a professional point of view, the official view, despite the necessary reassurance it provides, deals with the apparent symptoms more than it addresses the root causes, emphasizing that circumstantial factors such as new procedures and rumors play a stimulating role, but the roots of the crisis lie in that dangerous mix of a rentier, mono-economic economic structure, chronic weakness in domestic production, and the complexities of the geopolitical environment.
Repeated Cycles
He stated that without addressing this triad, the Iraqi economy and its currency exchange rate will remain vulnerable to repeated cycles of instability, with crises appearing intermittently and then temporarily disappearing before returning in other forms. He explained that the solution to the exchange rate dilemma does not lie in limited technical intervention to balance the parallel market or simply blaming speculators, despite the importance of these short-term measures.
The spokesperson stressed that a real and sustainable solution requires a comprehensive economic policy that aims to diversify sources of national income, stimulate the productive private sector through a supportive investment and legislative environment, and restructure the financial sector to be more efficient and inclusive.
He pointed out that these structural reforms are the only way to create an economy that is less dependent on the outside and more resistant to shocks, which in turn will reflect on the strength and stability of the national currency in the medium and long term.
Official Price Remains Stable
For his part, Haider Ghazi, the media officer of the Central Bank of Iraq, confirmed that there has been no change in the exchange rate of the dollar against the dinar, and it remains fixed at 1,320 dinars per dollar, explaining that what is being circulated as an exchange rate is only the demand of the unofficial market for dollars outside the system of banks licensed to work in foreign transfers through correspondent banks.
In an interview with Al-Sabah, Ghazi attributed the main reason for the rise in the parallel market to the customs duty due to demand outside the banking system, noting that the application of the prior customs duty for transfer purposes may have put significant pressure on those seeking cash dollars, and was behind the rise in demand for the dollar against the dinar in local markets.
He explained that traders are required to bring the customs declaration (customs statement) from the ASYCUDA system before the bank transfer is made to them, adding that on many occasions the Central Bank of Iraq stated that the ways to obtain dollars are through: First, external transfers through banks in a systematic and documented manner with all parties, and second, through the traveler's dollar after depositing an amount in Iraqi dinars with companies of categories A and B, and it is received through outlets inside Iraqi airports, as the bank set the traveler's share per month at $3,000.
Supply And Demand
In addition, a number of traders reported that the rise in the dollar price led to fluctuations in the price of goods, especially imported ones. While they indicated that some commercial activities witnessed a temporary slowdown while awaiting the stabilization of the exchange rate, money exchange shop owners explained that the demand for the dollar had increased during the past few days, compared to a relative decline in supply, which contributed to the rise in the price in the parallel market.
Iraq’s economy is mainly dependent on oil revenues, which represent the largest share of the general budget resources. The local market also depends largely on imports to secure basic goods, making exchange rates an influential factor in the cost of imports and the prices of materials in the market.
Government Procedures
On a related note, economist Mustafa Faraj believes that fluctuations in the dollar exchange rate directly impact the local market, given the nature of the Iraqi economy. He stressed the importance of taking regulatory measures when the exchange rate rises, including controlling the market and regulating trade, as well as ensuring the regular distribution of the food basket to reduce the impact of price changes in basic commodities.
Faraj added that oil prices and geopolitical factors in the region play a role in influencing economic performance, noting that the general budget was built on specific oil price estimates, and with any change in these prices, challenges arise in managing spending.
He suggested that the recent rise in the dollar's price was temporary, linked to the implementation of new mechanisms for regulating trade at the beginning of the year.
Trade Finance Mechanisms
For his part, Professor of International Economics, Nawar Al-Saadi, said that the recent rise in the price of the dollar in the parallel market reflects imbalances in the mechanisms for financing foreign trade and managing the demand for foreign currency, more than it is an indication of weakness in the country’s dollar resources.
Al-Saadi explained that part of the demand for the dollar is related to trade outside official banking channels, in addition to the impact of speculation and psychological factors in the market, stressing that the continued gap between the official price and the parallel market price limits the ability of monetary policies to achieve stability.
Meanwhile, economist Ahmed Eid believes that the rise in the dollar's price came as a result of the convergence of several factors at the same time, including increased commercial demand at the beginning of the year, in addition to psychological and hedging factors among some market participants.
Eid added that these developments do not currently indicate a structural monetary crisis, unless the pressures continue for a longer period or are accompanied by broader economic changes.
Given these circumstances, local market participants are awaiting government measures to control exchange rate activity, amid expectations that the dollar's price trajectory in the coming period will be determined by the balance of supply and demand and trade financing mechanisms.