Iraq Economic News and Points To Ponder Wednesday Afternoon 9-16-26
Exclusive | News of the dollar cutoff in Iraq fuels speculation and raises the exchange rate
September 16, 2026Last updated: September 16, 2026
The Independent - The Iraqi market has witnessed a new wave of increases in dollar exchange rates in recent days, coinciding with a significant increase in demand for the US currency, amid a state of anxiety fueled by news circulating about the possibility of imposing new restrictions on dollar flows to Iraq in the coming period.
An informed source told the Independent Press Agency that one of the main reasons behind the recent rise in the exchange rate is the news that has spread widely during the past hours and days regarding the possibility of cutting off or restricting the dollar to Iraq, which prompted a number of speculators and dealers to move quickly to buy the American currency.
According to the source, the market has witnessed unusually large withdrawals of dollars in recent days, amid concerns among some traders about a possible shortage in supply if the circulating news turns into actual actions.
He added that the state of anxiety opened the door for speculators to raise prices, as the increased demand in conjunction with the circulating news led to increased pressure on the parallel market and accelerated the movement of the exchange rate.
The source indicated that the mere spread of talk about the possibility of cutting the dollar or tightening restrictions on it was enough to push the market into a state of tension, even before any official decision was announced in this direction.
Conversely, official data published to date does not show any announcement from the Central Bank of Iraq regarding cutting off dollar supplies to Iraq. On the contrary, in June 2026, the Central Bank affirmed its commitment to meeting legitimate demand for dollars within established regulations, while its measures during the year included regulating access to foreign currency, tightening compliance requirements, and reforming the banking sector.
Furthermore, the officially announced restrictions focus on specific banks and companies barred from dealing in dollars, rather than a complete cutoff of dollars to Iraq. The Central Bank clarified in February that institutions on the restricted lists cannot participate in dollar transactions, either directly or indirectly.
These developments reveal the sensitivity of the Iraqi market to any news related to the dollar or the financial relationship with the United States, as unconfirmed news can quickly turn into an actual demand for the currency, and then into speculation that raises prices in the market.
The source believes that the current problem is not only related to the amount of dollars available, but also to the state of fear created by the news circulating about the next stage, which prompted some traders, citizens and speculators to hold onto dollars or increase their purchases in anticipation of any possible measures.
All eyes remain on the coming days to see if official bodies will issue clarifications regarding the circulating news, amid anticipation in the market for any stance that could reduce anxiety and lessen the pace of speculation.
Thus, it appears that news of the possibility of cutting off or restricting the dollar to Iraq has become, in itself, one of the main drivers of the recent jump in the
exchange rate, so far, rather than an official announcement confirming that the dollar has actually been cut off to the country.
https://mustaqila.com/خاص-أخبار-قطع-الدولار-عن-العراق-تشعل-ا/
In Detail... Al-Zaydi's Advisor Reveals To Shafaq News The Features And Challenges Of The 2027 Budget
2026-09-16 07:39 Shafaq News - Baghdad On Wednesday, the Prime Minister’s financial and economic advisor, Mazhar Muhammad Salih, revealed the most prominent features and challenges facing Iraq’s 2027 budget, stressing that its final form is not yet clear, pending the approval of the draft law by the Council of Ministers and its referral to the House of Representatives.
Saleh told Shafaq News Agency that "the full picture of Iraq's 2027 budget is not yet clear, unless the Council of Ministers finishes discussing and approving the draft federal general budget law and refers it to the House of Representatives."
He explained that “initial indicators alone are not sufficient to judge the trends of fiscal policy in the coming year, unless the estimates of revenues and the ceiling of spending, in its operational and investment aspects, and the priorities of programs and projects, especially investment ones, are definitively clarified, as well as the size of the planned deficit and the assumptions regarding the average price of a barrel of oil and the expected export quantities.”
Saleh added that these indicators are of exceptional importance in light of the economic and financial conditions that Iraq is going through, explaining that “any unrealistic estimate of revenues or expenditures can directly affect the size of the deficit and the need for financing, and the state’s ability to continue implementing its investment programs and fulfilling its operational obligations.”
Saleh pointed out that “the initial features indicate that the 2027 budget project was designed, to a large extent, on assumptions closer to the conditions of economic peace and stability, and that some of its indicators and constants mimic the trajectories of a fiscal base year that preceded the war and the Hormuz crisis that erupted on February 28 of this year, and the accompanying disturbances, losses and significant economic damages that Iraq suffered.”
He went on to say that the main challenge is whether a budget based on stability assumptions can accommodate an economy that is still dealing with the repercussions of war and regional unrest and their impact on trade, transport, energy, oil prices, import costs and supply chains.
Saleh pointed out that adopting assumptions closer to peace economics may be understandable from the perspective of maintaining a stable financial path, but it requires, in return, providing financial safety margins to confront unexpected developments, especially since the Iraqi economy still depends to a large extent on oil revenues.
According to Saleh, the continued uncertainty should not lead to abandoning the policy of fiscal discipline, stressing that what is required is not to increase spending simply to confront the effects of the crisis, but rather to direct public spending towards priorities with the greatest economic and developmental impact.
He noted that "the oil assumption remains one of the most important keys to understanding the 2027 budget," explaining that the expected oil price and export volumes represent the basis upon which the budget's ability to finance public spending is built, indicating that the widening gap between the oil assumptions on which the budget was built and the actual reality of the markets increases the pressure on public finances.
According to the government advisor, excessive optimism about oil prices or export volumes may increase the risk of deficits, while excessive conservatism may restrict the financing of necessary spending and public investment, stressing the importance of adopting realistic and conservative oil assumptions, along with developing alternative scenarios to deal with lower prices, reduced export volumes, or higher unexpected expenditures.
He stressed that "the most important aspect of the 2027 budget is the investment spending priorities," explaining that the question is not only about the size of the investment spending, but also about the sectors and projects to which the resources will be directed and the expected economic and social return from them.
Saleh believes that the post-war and post-crisis phase requires directing resources towards sectors capable of restoring economic activity and promoting growth, while giving priority to projects that address the basic bottlenecks in energy, transportation, water, infrastructure and services, as well as projects that can contribute to stimulating the private sector and expanding the production base, noting the need to achieve a balance between investment and operational spending.
He warned that the continued expansion of operating expenses limits the resources available for investment, while an ill-considered reduction in operating spending could affect the ability of state institutions to provide basic services, adding that "the real challenge facing the 2027 budget lies not only in the size of the figures, but also in its ability to withstand changes."
He explained that the initial features of the 2027 budget "will remain subject to change until the Cabinet approves it in its final form," noting that a more accurate reading of its directions will be possible after its approval, by comparing the expected revenues with the spending ceiling, the size of the deficit, oil assumptions, the composition of operational and investment spending, and the priorities of programs and projects.
Saleh concluded by saying that the upcoming budget faces a "difficult equation" which is to maintain fiscal discipline, prevent waste, and provide funding for priority programs, while leaving financial space to address the repercussions of war and regional unrest. He explained that the success of the 2027 budget will not be measured only by the mathematical balance between revenues and expenditures, but also by its ability to manage risks, protect financial stability, and direct limited resources towards priority uses.
Earlier on Wednesday, economist Nabil Al-Marsoumi identified five major obstacles facing Iraq’s budget for next year, while also warning of a financial deficit that could exceed 60 trillion Iraqi dinars.
This statement comes as the Iraqi Ministry of Finance intends to send the draft general budget law for 2027 to the House of Representatives on October 15, according to what Jamal Kojar, a member of the parliamentary finance committee, told Shafaq News Agency on Monday.
The government’s commencement of preparing the 2027 budget comes after two years of the absence of an effective federal budget with approved schedules; as the 2025 budget schedules were not approved, nor was a budget law for 2026 approved, despite the House of Representatives approving the three-year budget law for the years 2023, 2024 and 2025.
The 2025 budget, in its updated form, could not be implemented after its schedules were not approved within the House of Representatives and the fiscal year ended, which prompted the Ministry of Finance to adopt a temporary disbursement mechanism at a rate of 1/12 based on the Financial Management Law to secure salaries and governing expenses.
The 2026 budget was also not approved due to political complexities and economic pressures resulting from regional tensions and energy market volatility, so Iraq continues to manage its spending according to the temporary spending mechanism while awaiting the new federal budget.
https://www.shafaq.com/ar/اقتصـاد/بالتفاصيل-مستشار-الزيدي-يكشف-لشفق-نيوز-ملامح-وتحديات-موازنة-2027
Vance: Traffic Through Strait of Hormuz Has Returned to More Than 50% of Capacity
Iraqi News Agency Wednesday, 9/16/2026 *Follow-up - INA - 9/16/2026 (Iraq Time)
U.S. Vice President J.D. Vance on Wednesday said that traffic through the Strait of Hormuz has returned to more than 50% of its capacity.
Vance told the New York Post, “I agree with the president that the war could end immediately after the midterm elections,” noting that “Iran will continue to lose control of the Strait of Hormuz until the elections.”
He added that “shipping traffic through the Strait of Hormuz has returned to more than 50% of normal levels.”