Iraq Economic News and Points To Ponder Wednesday Morning 8-26-26
Between Advantages And Repercussions... An Expert Reveals To "Baghdad Today" The Details Of Removing Zeros From The Dinar
Baghdad Today – Baghdad Professor of International Economics, Nawar Al-Saadi, revealed today (Tuesday, August 25 , 2026) the importance and repercussions of "removing zeros" from the Iraqi currency.
Al-Saadi told Baghdad Today that “the principle of removing zeros, if implemented in a scientific and well-thought-out manner, can contribute to simplifying monetary and accounting transactions, facilitating payment processes and digital transformation, and reducing the volume of banknotes in circulation, in addition to the possibility of using the process as part of a broader reform to bring cash funds outside the banking system back into the official financial cycle.”
He pointed out that "the danger does not lie in the removal of zeros itself, but rather in the way the operation is carried out," explaining that "if the removal of zeros is confused with changing the exchange rate, or if the operation is carried out in an environment suffering from weak confidence in banks and high cash transactions, negative effects may appear, the most important of which are confusion in the markets and some traders exploiting the conversion process to make price increases under the cover of currency change."
He added that “there is what is called in economics (price rounding); when prices move from large numbers to small numbers, some traders may round prices upwards, and this can generate a limited inflationary effect if there are no controls and clear mechanisms to stabilize prices during the transitional phase.
Therefore, removing zeros does not automatically generate inflation, but mismanagement and an unorganized transition can create inflationary pressures.”
Regarding the citizen’s purchasing power, Al-Saadi explained, “Here I think the most important message is that removing zeros is not a policy to raise the value of the dinar. If we remove three zeros, for example, 25,000 dinars will become 25 new dinars, but at the same time the commodity that was worth 25,000 dinars must be converted to 25 new dinars, and the salary that was one million dinars will become one thousand new dinars, and the deposit, loans and financial obligations will be recalculated at the same rate, and thus the citizen’s purchasing power will not change because of removing zeros alone.”
He continued, "Changing the exchange rate is a completely different matter, and I believe it is important not to link the two processes. Iraq needs monetary and price stability at the present stage, and the Central Bank itself confirmed in its recent statements its commitment to maintaining the stability of the exchange rate and denied that there is any intention to amend it."
He also stressed, "If Iraq wants to implement the removal of zeros, it must be within an integrated reform package that includes developing the banking system, expanding electronic payment, enhancing financial inclusion, combating money laundering, and regulating the process of replacing the old currency with the new one, with a clear transition period and broad awareness for citizens and merchants.
Most importantly, the process must be monetaryly neutral." He added, "There should be no additional printing of money to finance spending, no change to the exchange rate, and no use of the process as a tool to address the financial deficit.
The Central Bank has previously clarified that injecting new money without compensation leads to inflationary pressures and erosion of the currency's value, which is completely different from simply replacing the old currency with a new one at a fixed conversion rate."
The professor of international economics concluded by emphasizing, "Therefore, I believe that removing zeros can be an important regulatory reform for Iraq and not an economic risk in itself, provided that it remains merely a currency redundancy and does not turn into a change in the exchange rate or into a means of addressing financial imbalances
. The success of the process will not be measured by the number of zeros we remove, but rather by our ability to invest them in reforming the financial and banking system and rebuilding confidence in the dinar and banking institutions."
https://baghdadtoday.news/305217-.html
Tut: Approving The Salary Scale Is Difficult At The Moment.
25 Aug 18:04 Information/Baghdad... MP Yasser Watout earlier on Tuesday that proceeding with the approval of the salary scale at the present stage is extremely difficult and requires informing the public of all its details before taking the first steps.
Watout explained to Al-Maalouma that he "strongly supports proceeding with the approval of a fair and equitable salary scale for more than five million employees in the Iraqi state, but the matter cannot be done with the stroke of a pen, because many salaries and financial entitlements are based on laws."
He added that "the process of changing the course of salaries and bonuses must be carried out through amending those laws, and this requires legislation, in addition to the necessity of a national political consensus regarding any step in this direction."
Watout pointed out that "the nature of the current situation does not support the option of proceeding with the salary scale at the present time, due to the existence of many problems," stressing that "any step in this direction must be clear to the public in all its details, and the facts must be available so that everyone is aware of the nature of the measures taken."
He reiterated his emphasis that "the Iraqi state is in dire need of a fair and equitable salary scale, where experience and years of service are the basis for determining the salaries of all state employees." End/25
Will Iraqis Start Tightening Their Belts? There Are No Signs Of That On The Horizon, And Employees Are Asking: Where Are The Salaries?
25 Aug 19:30 Information / Special .. MP Hussein Al-Bayati, from the Ishraqa Kanoun bloc, revealed today, Tuesday, that there are doubts about securing the salaries of employees for the current month, despite the assurances of the Prime Minister, Ali Al-Zidi, during previous statements, that the salaries are secured for the coming months and will be disbursed on their scheduled dates.
Al-Bayati told Al-Maalouma that “the assurance regarding the timely disbursement of salaries is still lacking,” noting that “the days of the month are almost over, while the Ministry of Finance has not yet announced the release of funding for employee salaries.”
He added that "salaries during the past two months have been delayed in disbursement, and the government has not been able to release them within the specified timeframes, which has increased concerns about the possibility of a repeat of the delay during the current month."
Al-Bayati pointed out that "a number of MPs are moving to contact the Minister of Finance to ascertain the true financial situation and the extent to which employee salaries are secured, given that the ministry is the entity concerned with the financing and disbursement file."
He pointed out that "the Prime Minister has accurate information regarding the financial situation and the timing of salary payments, but there is still some uncertainty surrounding the date when employee salaries will be distributed."
Al-Bayati explained that "the financial crisis in the country exists and no party can deny it," indicating that "whoever denies its existence is out of touch, given the continued halt in oil exports, with the exception of limited quantities being exported via pipelines in the north of the country."
He explained that "the Iraqi budget depends almost entirely on oil revenues, meaning that any halt or decline in exports directly impacts the state's ability to meet its financial obligations, primarily paying employee salaries." (End of page 25)