Tuesday Iraq News Posted by Tishwash at TNT 8-18-2026
TNT:
Tishwash: Prime Minister's Advisor: Digital Dinar a promising project to enhance the efficiency of monetary policy
The Prime Minister's advisor, Mazhar Muhammad Salih, confirmed on Monday that the digital dinar is a promising strategic project and not an independent solution to the liquidity crisis. While he pointed out that paying salaries digitally enhances the speed of payments and reduces cash transactions, he indicated that the success of the digital dinar depends on expanding banking services and infrastructure.
Saleh told the Iraqi News Agency (INA): “The proposal to launch the digital Iraqi dinar is one of the ideas that deserves to be studied within the framework of Iraq’s move towards digital transformation and the development of the financial system.
If the digital dinar is meant to be a digital currency issued by the Central Bank of Iraq and enjoys the same legal force as the paper dinar, then it could represent a modern tool to enhance the efficiency of monetary policy, improve liquidity management, and develop the government payments system, which is what most central banks in the world are working on today.”
He added that “a sovereign digital currency does not mean creating a new currency, but rather issuing a digital form of the Iraqi dinar, so that it becomes available for electronic trading through digital wallets and bank accounts, while its value remains equal to the paper dinar,” explaining that “the importance of the digital currency lies in reducing reliance on cash, lowering printing, transportation and protection costs, speeding up payment processes, enhancing financial inclusion, as well as reducing the unregulated cash economy and its associated tax evasion, money laundering and corruption.”
Saleh pointed out that “the digital dinar should not be blamed for addressing the cash liquidity crisis, as the crisis, if it exists, is primarily linked to structural economic and financial factors, including the structure of the general budget, the level of government spending, citizens’ confidence in the banking sector, the size of deposits, and monetary policy,” stressing that “the digital dinar is a means to improve the efficiency of cash management, and not an independent cure for macroeconomic imbalances.”
He continued: “The Central Bank of Iraq has made significant progress in the digital transformation process by expanding electronic payment systems, digital wallets, point-of-sale devices, and linking banks to modern settlement systems.” He pointed out that “these measures represent the foundation upon which future decisions can be made to issue a sovereign digital currency, but this requires completing the legal and legislative frameworks, strengthening cybersecurity, and providing a technological infrastructure capable of accommodating this transformation.”
He explained that “disbursing salaries to employees and retirees in digital form is technically possible, especially since a large segment of salaries are currently disbursed via bank cards linked to the localization of government salaries and pensions,” noting that “in the future, the possibility of depositing salaries directly into digital wallets or accounts linked to the digital dinar can be studied, which reduces the need for cash transactions, enhances the speed of payment execution, and limits the risks of transferring and handling money in cash.”
Saleh explained that "the success of this transformation depends on several requirements, most notably expanding the spread of banking services in all governorates, increasing the number of electronic payment devices and ATMs, improving the quality of communications and internet services, and raising the level of digital financial literacy among citizens, in order to ensure that society accepts these modern methods and uses them with confidence and security."
The Prime Minister’s advisor pointed out that “the launch of the digital Iraqi dinar represents a promising strategic project, but it is not a substitute for economic and financial reforms, rather it is part of them. Its success requires a more diversified economy, a more efficient banking sector, and disciplined financial policies, in addition to an integrated legal and technical framework. When these elements are available, the digital dinar can contribute to enhancing financial stability, improving liquidity management, and supporting the transition towards a more efficient and transparent digital economy, in line with modern global trends in managing monetary systems link
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Tishwash: Iraq to Drop Zeros From Its Currency as Dinar Redenomination Returns?
Iraq's Communications Minister Mustafa Sanad says Iraq has decided to remove zeros from the dinar and reprint the currency, but the Central Bank remains the country's monetary authority and has not publicly confirmed a timetable.
Is Iraq preparing to remove zeros from its currency after years of discussion over a possible dinar redenomination?
The question returned to the forefront Sunday after Communications Minister Mustafa Sanad said the decision had been made and that Iraq's currency would soon undergo changes and be reprinted.
"The decision to remove the zeros from the Iraqi currency has been made; the Iraqi currency will soon undergo changes and be reprinted," Sanad said in an interview with INews Iraq.
The statement would represent a major development in a monetary reform proposal discussed in Iraq for more than a decade.
But it also raises questions over timing and implementation because the Central Bank of Iraq (CBI), rather than the Communications Ministry, is the country's monetary authority.
The CBI has not, in the material reviewed for this report, announced a specific timetable for removing zeros. In June, the bank stressed its commitment to supporting the dinar and maintaining monetary and economic stability, while warning against inaccurate reporting about currency-related measures.
What Would Removing Zeros Mean?
Removing zeros, commonly referred to as redenomination, would change the numerical denominations of Iraq's banknotes without necessarily changing the currency's real purchasing power.
For example, under a hypothetical three-zero adjustment, 1,000 old dinars could become one new dinar, with prices, wages, bank balances, contracts and other financial values adjusted proportionally.
The policy would therefore be fundamentally different from a devaluation or revaluation of the dinar.
Earlier discussions by the Central Bank have presented deleting zeros as a technical and administrative reform intended to simplify accounting, reduce the volume of cash in circulation and make financial transactions more efficient.
The CBI's broader reform agenda has also focused on strengthening the banking sector and expanding international banking relationships.
In July, Prime Minister Ali Falih al-Zaidi said seven Iraqi banks had been prepared to return to international correspondent-banking channels after meeting compliance and governance requirements.
Why Is the Idea Returning Now?
The proposal comes as Iraq attempts to modernize a heavily cash-dependent economy while managing significant fiscal and monetary pressures.
The country remains highly dependent on oil revenues, leaving government finances sensitive to fluctuations in crude prices and production.
At the same time, the amount of currency circulating in the economy has grown substantially, making the physical handling of large-denomination dinar payments increasingly cumbersome.
A redenomination could make everyday accounting and financial reporting more straightforward.
It could also complement efforts to move transactions into the formal banking system, particularly if the replacement of banknotes encourages citizens and businesses to deposit large cash holdings rather than keeping them outside financial institutions.
Not a Shortcut to a Stronger Dinar
A critical distinction is that removing zeros would not automatically make the dinar more valuable.
If the conversion were purely proportional, an item costing 50,000 old dinars could simply be priced at 50 new dinars after three zeros were removed.
Salaries and bank deposits would undergo the same mathematical adjustment.
The reform would therefore simplify the currency rather than instantly increase Iraqis' purchasing power.
The CBI has previously emphasized the importance of monetary stability, and in June it rejected misleading claims surrounding currency and state financing operations.
The bank said its strategy remained focused on supporting the dinar and maintaining financial and economic stability.
A Reform With Political and Practical Risks
Any decision to redenominate the currency would require extensive preparation.
The government and central bank would need to coordinate the printing of new notes, establish a conversion period, adjust accounting and payment systems, update contracts and financial records, and conduct a large public information campaign.
Businesses, banks and government institutions would also need sufficient time to adapt.
The transition could be particularly sensitive in Iraq because of the size of the informal cash economy.
Authorities would need to ensure that counterfeit notes, unregistered wealth and illicit funds do not enter the financial system during the exchange process.
At the same time, political agreement would be needed across Baghdad's fragmented political landscape, including coordination between the Central Bank, Finance Ministry, Parliament and other state institutions.
Banking Reform Moves in Parallel
The currency debate comes as Iraq's financial sector is already undergoing a broader reform process.
The CBI said in February that Iraqi commercial and Islamic banks and branches of foreign banks had completed a major stage of a comprehensive reform program, with institutions choosing among paths including remaining independent, merging or exiting the market.
The bank said further work would focus on addressing identified deficiencies and achieving full compliance.
The bank has also been working to expand the ability of compliant Iraqi banks to conduct international transactions in currencies including the euro, UAE dirham, Chinese yuan and Jordanian dinar.
Those reforms are relevant to a potential redenomination because changing the physical currency without strengthening the banking infrastructure would address only part of the problem.
What Happens Next?
Sanad's statement has revived a proposal that has circulated through Iraqi economic policy debates for years.
But the key question now is whether the statement represents a finalized government decision ready for implementation or a political announcement ahead of formal action by the country's monetary authorities.
The Central Bank will ultimately be central to determining how, and whether, the reform proceeds.
For Iraqis, the practical significance will depend less on the number of zeros printed on a banknote than on what accompanies the change: monetary stability, functioning banks, transparent conversion rules and confidence that the new currency will retain its purchasing power.
Until those elements are established, the prospect remains best framed as a major policy signal rather than an immediate change in the value of the Iraqi dinar. link
Tishwash: New changes in financial and development institutions... Al-Zaydi appoints new leaders
Prime Minister Ali Faleh al-Zaidi made new changes today, Tuesday, to a number of leadership positions within financial and development institutions, in a move that the government said comes within its directions to enhance efficiency and support the path of administrative and economic reform.
The changes included appointing Ali Abdul-Ridha Alwan as Chairman of the Trade Bank of Iraq (TBI), while Bilal Al-Hamdani was appointed Executive Director of the Iraq Development Fund, in a decision that places two new figures in front of important responsibilities in one of the most sensitive sectors of the Iraqi economy.
The importance of this step stems from the nature of the institutions that were included in the changes. The Iraqi Trade Bank is one of the most prominent government banking arms, while the Iraq Development Fund is linked to investment files, programs and development projects, which makes management efficiency a key factor in achieving the desired results.
According to official explanations, the aim of the changes is to raise the level of institutional performance and accelerate the implementation of development programs and plans, in addition to supporting administrative and economic reform.
But the success of this step will not be measured by simply changing names and positions, but rather by the tangible results that the new administrations will deliver, especially in light of the challenges facing the Iraqi economy and the banking sector, and the need for more efficient, transparent institutions capable of keeping pace with financial and digital transformations.
The new management of the Iraqi Trade Bank faces important issues, including developing banking services, strengthening governance, improving performance, and supporting confidence in the Iraqi banking system. Meanwhile, the Iraq Development Fund will have a greater responsibility to transform plans and allocations into real development projects that contribute to creating job opportunities and stimulating the economy.
In conclusion, the recent changes appear to be part of a governmental trend to restructure financial and development institutions, and the real test remains during the next phase: Will the new leadership succeed in transforming administrative change decisions into economic and developmental results that are felt by the citizen and the Iraqi economy? link
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Tishwash: Exclusive: Iraq nears agreement with German company to transport its oil through the Strait of Hormuz with Iranian approval
An Iraqi government source revealed on Monday that the State Oil Marketing Company (SOMO) is conducting intensive negotiations with American and German oil transport companies in an attempt to secure the passage of Iraqi crude through the Strait of Hormuz, taking advantage of Iranian approval for the passage of tankers flying the Iraqi flag amid the disruptions to shipping in the waterway.
The source told Shafaq News Agency that "Iraq is seeking to capitalize on Iran's approval for Iraqi-flagged oil tankers to cross the border to deliver crude oil to global markets," indicating that "SOMO has held talks with two companies specializing in global oil transport, one American and the other German."
He explained that "the American company refused to raise the Iraqi flag on its tankers, which is a basic condition set by Baghdad to ensure the safe passage of oil through the strait, and therefore no agreement has been reached with it so far."
According to the source, "the German company has agreed to raise the Iraqi flag on its tankers while transporting crude oil from Iraqi ports and passing through Hormuz to global markets," noting that "Iraqi oil will not be subject, according to understandings with the Iranian side, to any financial fees for passage."
However, the source pointed to another obstacle related to the American side, saying that Baghdad “needs American approval or authorization to complete the transit arrangements,” predicting that it would be obtained soon, in light of the American sanctions imposed on parties linked to Iranian navigation and insurance mechanisms in the Strait of Hormuz.
The United States imposed sanctions on July 29 on companies and tankers linked to Iran, including entities that Washington said were using insurance and shipping services to collect revenue from ships crossing the strait, further complicating insurance and financial transactions related to transit.
The government source pointed out that the deadline set by Prime Minister Ali Faleh al-Zaidi for the Ministry of Oil to find solutions to the crude oil export crisis "may be extended for a second week," explaining that reaching final arrangements with shipping companies "is not easy," as the companies are demanding higher transportation fees and additional insurance guarantees commensurate with the level of risks in the strait.
On Monday, Al-Zaidi gave the Ministry of Oil a week to show tangible results in addressing the export crisis, and directed it to contract with international companies to market and sell oil, and to develop alternative export outlets, in light of the decline in exports due to the Hormuz crisis.
The new negotiations come after an official Iraqi move towards Washington and Tehran to obtain arrangements that would ensure the continuous passage of oil tankers, while Iraq's exports in July amounted to about 49 million barrels, more than 30 million barrels of which passed through the Strait of Hormuz, according to data from the Ministry of Oil.
Security risks and high insurance costs remain major obstacles to restoring Iraqi exports to normal levels. Shipping companies have refrained from sending tankers to Basra ports despite the significant discounts offered by SOMO to buyers. Ship tracking data from earlier in August showed a sharp decline in shipping traffic through the Strait of Hormuz, as ship owners remained hesitant to enter the region due to the risk of being targeted.
In a sign of the difficult situation, Totsa, the trading arm of Total Energies, recently offered Basra crude for loading from locations outside the Strait of Hormuz, as buyers continue to be reluctant to send tankers to Iraq’s southern ports because of security risks. link