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Government program and economic policies revive the dinar

In its third year of implementation, the government program continues to make steady progress toward achieving its economic goals, despite the complex challenges posed by regional and international realities, particularly regarding the threat of war, fluctuations in energy markets, and volatile global economic cycles.

However, national growth indicators remain evident across various infrastructure sectors, supported by remarkable levels of economic stability, most notably the annual inflation rate remaining below the 3 percent mark. This indicates the ability of economic policy to absorb shocks and manage resources relatively efficiently.

qualitative transformations

In this context, Dr. Mazhar Mohammed Saleh, the Prime Minister’s financial advisor, told Al-Sabah that the parallel currency market has witnessed a qualitative transformation over the past period. Previously, it was governed by “noisy patterns” that generated sudden price fluctuations. Today, it has become more stable and is gradually being driven by the official market.

Saleh attributes this shift to the effective coordination between fiscal, monetary, and trade policies, which contributed to the flow of accurate and well-thought-out information signals, enabling the market to shift from a state of volatility and speculation to a calmer trading environment more in line with the country’s economic reality.

Integrated procedures

Saleh adds that this positive shift is the result of a series of integrated measures that have contributed to narrowing the gap between the official and parallel dollar rates, most notably the strict legal ban on dollar use in domestic transactions, particularly in the real estate market, which is one of the most sensitive sectors.

He added, “The transition to a mechanism for financing foreign trade through global correspondent banks, rather than relying exclusively on the central bank’s window, has contributed to reducing compliance risks and decreasing reliance on the informal market.”

Another factor that has contributed to enhanced market stability, the advisor said, is the entry of small importers into the official dollar financing network, without the need for money exchange companies. This has facilitated their access to foreign currency at direct official exchange rates, especially since their trade represents approximately 60 percent of the private sector’s foreign trade.

Administrative facilities

Dr. Saleh points out that this transformation was achieved through administrative facilitation provided by the government and the reduction of bureaucratic loopholes that previously hindered import financing and implementation.

The financial advisor emphasized that the expanding use of electronic payment cards in foreign currency, particularly among travelers, has been an additional factor in reducing pressure on the cash dollar, given the availability of cash allocations at the official exchange rate through banking outlets located throughout airports, and with flexible and organized compliance mechanisms.

He pointed to the role played by cooperative societies, food baskets, and construction goods, which are imported in dollars at the official exchange rate of 1,320 dinars, in supporting the price stability policy. This has enabled the government to use trade as a tool to achieve monetary stability, as part of an integrated strategy for economic policies in implementing the government program.

Fluctuations in the US economy

In contrast, financial and economic expert Dr. Safwan Qusay pointed out that the Iraqi dinar, despite its relative resilience, remains vulnerable to the effects of global markets and fluctuations in the US economy. Speaking to Al-Sabah, he pointed out that the new customs restrictions imposed by the US administration on some imports have weakened exports from key countries such as China, Japan, the European Union, and Canada. This has led to a relative decline in the value of the US dollar globally, which opens the way for the Federal Reserve to consider reducing interest rates, which could negatively impact the dollar’s attractiveness as a reserve currency.

Qusay believes that the Iraqi market is often subsequently affected by these shifts, which may partly explain the recent decline in the dollar’s price in the informal market, due to the potential entry of cash dollars into Iraq via neighboring countries amid these changes.

strong bumpers

Qusay warns that the continued decline in the value of the dollar could pose future risks to the central bank’s reserves, especially with an increasing number of countries diversifying their reserves away from the US dollar and resorting to gold or other currencies. However, Qusay emphasized that Iraq still possesses strong buffers that protect it from these risks, most notably its massive dollar reserves at the central bank and its possession of more than 116 tons of gold, which is also witnessing a rise in value globally. He also points out that current oil prices remain at levels sufficient to ensure the stability of the dinar in the long term.

near.

Qusay believes that maintaining this stability requires the Central Bank to review its reserve management strategies and ensure they are not affected by dollar fluctuations. He also believes that it is necessary to accelerate steps to diversify the economy and control revenues and expenditures to avoid any potential repercussions of the dollar’s decline on the value of the Iraqi dinar.

Alsabaah.iq

10 Reasons Behind the Decline in the US Dollar Against the Iraqi Dinar

The exchange rate of the dollar against the Iraqi dinar has witnessed a significant decline recently. This decline is due to a group of intertwined economic and procedural factors, which vary in their level of influence but, together, have contributed to strengthening the dinar, according to the economic expert .Manar Al-Abidi.

And as follows – according to: Al-Obaidi The most prominent of these reasons:

1- Economic contraction and declining consumer confidence.
The state of uncertainty facing the Iraqi market, as a result of the economic slowdown, has led to a decline in the confidence of individuals and institutions in spending, which has negatively impacted the volume of public demand, thus reducing the need for the dollar as a stimulus for trade.

2- Halting government investment spending
. The government’s focus on operating spending rather than investment spending has led to a decline in economic activity. Since the general budget is the primary driver of economic activity, reducing investment spending has reduced aggregate demand, including the demand for the dollar.

3- Tightening control over border crossings.
Government measures to limit smuggling and regulate relations with Kurdistan Region It contributed to reducing the phenomenon of inflated invoices, which reduced the unreal demand for dollars in the parallel market.

4- Traders’ shift to the formal banking system.
Markets witnessed the entry of a large segment of traders into the formal banking system, and their reliance on the official dollar exchange rate through approved platforms, which reduced the volume of trading in the parallel market and eased pressure on the dollar.

5- Decline in re-exports.
The decline in re-exports of goods to neighboring countries led to a reduction in demand for imported goods, which directly reflected a decline in the need for dollars to finance these trade operations.

6- Settling the dues of major companies in petroleum products instead of cash
. The government proceeded to settle a portion of the dues of foreign companies in black oil and naphtha instead of cash, which reduced reliance on dollars sold by the Central Bank and increased their supply in the market.

7- Preparations for the electoral process
. With the start of the election season, the volume of spending related to the election campaigns increased. This spending is often financed from cash reserves stored in dollars, which necessitated converting large amounts of these reserves into dinars to cover campaign expenses, thus increasing the supply of dollars.

8- The increase in the number of foreign visitors and arrivals
contributed to the increase in the number of arrivals to Iraq Introducing large quantities of foreign currency into the local market, which provided an additional source of hard currency outside the framework of central bank sales, and contributed to increasing the availability of dollars.

9- The cessation of illicit trade as a result of the closure of the borders with Syria
The closure of border crossings with Syria contributed to the reduction of smuggling and illegal trade, which had been heavily dependent on dollars on the parallel market. This led to a further decline in demand for the dollar.

10- The decline in the issued currency and the withdrawal of some of it from the market
.Central Bank of Iraq By withdrawing part of the dinar money supply from the market, this led to a double demand for the Iraqi dinar against the dollar. This balance in demand levels between the two currencies helped strengthen the value of the dinar and raise its exchange rate against the dollar in the parallel market.

Al-Obaidi stated that these are the main reasons that led to the decline in the exchange rate against the dinar. The question remains as to the extent to which each reason affects the official exchange rate, and there may be other reasons. I believe that the sequence of reasons above reflects the importance of each factor on the exchange rate in the parallel market.

Alsumaria.tv

Financial expert: “Economic uncertainty” behind the dollar’s decline in Iraq

Financial expert Mahmoud Dagher attributed the gradual decline in the US dollar exchange rate against the Iraqi dinar on Monday to “economic uncertainty,” weak government spending, and a stagnant market.

Dagher told Shafaq News Agency, “The reason behind the dollar’s decline against the Iraqi dinar is the state of uncertainty in the Iraqi economy, the recession resulting from the somewhat low price index, and the disproportion between the dinar and the volume of the dollar being transferred, as the volume of the dinar has begun to shrink in the face of a large supply of dollars.”

He added, “This is an issue with no clear economic variable or direct government decision, because the state is spending less, and when the pace of spending decreases, demand pressure decreases accordingly.”

Dagher pointed out that “the gap still exists, at approximately 8,000 dinars per note, which means we are still far from the target price, and speculation continues in the markets.”

The dollar exchange rate has been gradually declining since the beginning of this year, approaching the official rate adopted by the Central Bank of Iraq.

Ahafaq.com

Among them is an Arab figure… Trump uses his personal phone to communicate with world leaders.

Politico, the US newspaper, revealed on Monday that President Donald Trump had given his personal phone number to world leaders so they could communicate directly with him. The newspaper confirmed that one of the leaders was an Arab.

According to the newspaper, Trump’s tendency to engage in frequent, often informal, friendly conversations has become an integral part of his personality. For example, in early March, British Prime Minister Starmer used WhatsApp to write to Trump, asking him to revive his relationship with Zelensky and restore it to normal.

She added, “The list of leaders who have such close contact with President Trump also includes French President Emmanuel Macron, Saudi Crown Prince Mohammed bin Salman, and Israeli Prime Minister Benjamin Netanyahu.”

However, a source, according to the newspaper, indicated that Trump’s offer may have initially confused some, but now heads of state who want to maintain a good relationship with the US president are calling and texting him regularly.

Shafaq.com

Ministry of Transport: The development path will change the economic landscape and make Iraq a hub for global trade.

The Ministry of Transport announced on Monday that the development road will change the economic map and make Iraq a center for global trade, while indicating that the road will provide job opportunities for more than 100,000 Iraqi workers. The spokesman for the Ministry of Transport, Maitham Al-Safi, told the official agency, “The development road project is not just a transit corridor or a transit station, but rather a comprehensive economic development project, with strategic dimensions that will change the map of the Iraqi economy and make Iraq a pivotal center in global trade between East and West.”

Al-Safi explained that “the project consists of several key pillars, most notably the Grand Faw Port, which will transform into an advanced maritime destination, receiving and handling the largest ships, along with the attached economic city, giving Iraq a truly competitive edge in the field of maritime transport and logistics services.”

He also added that “the railway and road accompanying the project will include more than 12 stations distributed among the governorates, providing local governments and other ministries with unique investment opportunities in the fields of agriculture, industry, and manufacturing, in addition to the possibility of establishing modern residential, industrial, and economic complexes.”

He also pointed out that “among the most prominent elements of the project are the establishment of industrial zones and linking them to the new infrastructure, in addition to the project’s integration with Iraqi airports,” stressing that “the idea of linking airports to the development road project is a pivotal step, as it will benefit from currently operating airports, such as: Baghdad Airport, Najaf Airport, Basra Airport, and Mosul Airport, in addition to airports that will enter service soon, such as: Karbala and Nasiriyah. These airports will not be merely travel gateways, but will constitute transit stations capable of accommodating international air traffic.”

He emphasized that “the Development Road Project will provide job opportunities for more than 100,000 Iraqi workers and will create a series of regional and international economic partnerships, which will lead to a significant increase in the gross domestic product and enhance economic integration not only within Iraq but also with all countries in the region, thus consolidating Iraq’s position as the beating heart of future development projects.”

Burathanews.com

“With a unique experience,” a government advisor reveals the features of the 2026 budget.

The Prime Minister’s financial advisor, Mazhar Muhammad Salih, revealed the outlines of the draft general budget law for next year, 2026, as the 2025 fiscal year draws to a close and the countdown to the conclusion of the current parliamentary session begins.

Saleh said in a press statement that the 2026 budget “will involve a unique financial experience, characterized by precision and the ability to manage economic activity. It will witness an expansion of the fiscal space, which means a greater ability to collect non-oil revenues.”

He explained that, “According to the current Federal Financial Management Law No. 6 of 2019, as amended, the financial authority, in cooperation with the Ministry of Planning, is currently working to prepare the broad outlines of the 2026 budget, in preparation for presenting it to the Ministerial Council for the Economy next September.

It will then be referred to the government to discuss its constants and variables before submitting it to the House of Representatives in accordance with the constitutional process.”

Saleh explained that, “The draft 2026 budget law will involve a unique financial experience, characterized by precision and the ability to manage economic activity, especially since government spending constitutes nearly 50% of the gross domestic product.”

He added, “The upcoming budget will build on a previous successful experience in medium-term financial planning for a period of three years, in accordance with Federal General Budget Law No. 13 of 2023.”
The Prime Minister’s advisor explained

Alforatnews.iq

Through 5 factors, Iraq aims to bring the dollar exchange rate to “conformity”

Financial and economic advisor to the Prime Minister, Mohammed Shia al-Sudani, revealed on Tuesday five factors that could help narrow the gap between the official dollar exchange rate and its parallel market price, potentially leading to “convergence” between the two rates.

The official exchange rate of the dollar, approved by the Central Bank of Iraq, is 132,000 dinars per $100. Meanwhile, the parallel market exchange rate has approached 139,000 dinars over the past two days in Baghdad and the Kurdistan Region, representing a gap the government is seeking to bridge.

Mazhar Mohammed Saleh told Shafaq News Agency, “The decline in the value of the dollar on the parallel market, in favor of the Iraqi dinar, and its approach to the official rate, is due to several reasons and factors, the first of which is the ban on dealing in dollars domestically, especially in the real estate sector, which constituted a major deterrent to the phenomenon of dollarization.”

He added, “The second factor is the shift to a policy of foreign exchange bolstering through international correspondent banks, which handled foreign transfers after the Central Bank’s window ended at the beginning of this year, reducing the risk of resorting to high-cost informal financing.”

Saleh continued, “The entry of small importers into the formal financing system and their reliance on a fixed exchange rate for external transfers, which constitutes approximately 60% of total foreign trade, is the third factor in narrowing the gap.”

He pointed out that “the fourth factor is the expanding culture of using electronic payment cards in foreign currency among travelers, which has eased the pressure on demand for cash dollars, in addition to facilitating travelers’ access to their dollar share through airports, subject to clear controls.”

The fifth factor, according to Saleh, is “the price defense policy through the expansion of cooperatives for consumer goods and building materials, financed by imports calculated at the official exchange rate of 1,320 dinars per dollar, reflecting the integration of monetary, fiscal, and trade policies within the government program.”

The financial advisor concluded his statement by saying, “The fact that the difference between the official and parallel rates is approaching less than 4% indicates that we have entered the convergence phase, as this difference represents only the cost of transactions.”

Shafaq.com

Economist: Iraq plans to increase its oil exports to 6.5 million barrels per day.

Economic expert Safwan Qusay confirmed on Wednesday that the agreement for the oil pipeline between Iraq and Turkey via the Ceyhan port has not been canceled, but rather work is underway to develop it and expand the horizons of economic cooperation between the two countries to include broader areas and larger quantities of oil exports.

Qusay said in a statement to Al-Maalouma Agency, “The Ministry of Oil’s policy is directed towards gradually increasing oil exports to about 6.5 million barrels per day, with future plans to raise them by an additional three million barrels.”

He pointed out that “exports will not be limited to Turkey, but will also include European Union countries, the Baniyas port in Syria, in addition to reactivating the strategic pipeline with Saudi Arabia and the Aqaba port in Jordan.”

He explained that “expanding the export circle and diversifying its routes requires a renewed understanding with the Turkish side regarding the export quantities via the Ceyhan pipeline.”

He pointed out that “Turkey seeks to transform the agreement into a strategic partnership that includes the transport of no less than 2.2 million barrels of crude oil per day, with the possibility of including Iraqi and Qatari gas in the future, in addition to Basra crude.”

Qusay explained that “the Turkish economy is looking forward to integrating with the Iraqi economy through regional development projects,” stressing that “there is no cancellation of the agreement, but rather there are new paths to activate it in a way that achieves common interests, especially after the losses incurred by the Turkish side as a result of the pipeline’s shutdown, which amounted to more than $264 million due to maintenance work.”

Almaalomah.me

Al-Sudani’s office publishes new details of the phone call with the US Secretary of State.

The Iraqi government released new details on Wednesday regarding the phone call between Prime Minister Mohammed Shia al-Sudani and US Secretary of State Marco Rubio.

The office stated in a statement received by Shafaq News Agency that “Al-Sudani received a phone call from Rubio, during which they reviewed bilateral relations and the general situation in the region.”

According to the statement, Al-Sudani affirmed Iraq’s support for efforts to consolidate stability in the region, sustain ceasefire agreements, and halt aggression.

He pointed to “the recent attacks on vital oil facilities in the Kurdistan Region of Iraq and in the provinces of Salah al-Din and Kirkuk,” describing them as “targeting the Iraqi national economy.”

He added that “security services are monitoring the sources of the attacks with the international coalition to fight ISIS,” expressing his “surprise that these attacks coincided with the agreement of principles between the Ministry of Oil and American investment companies operating in the region to invest in a number of oil fields in Kirkuk and Salah al-Din.”

The call also touched on the Popular Mobilization Forces (PMF) law, according to the statement. Al-Sudani explained that “submitting this law to the House of Representatives is part of the government’s security reform process, and is part of the government program approved by the House of Representatives. This process has included the approval of similar laws for other agencies within our armed forces, such as the Intelligence and National Security Services.” He emphasized that “the PMF is an official Iraqi military institution operating under the authority of the Commander-in-Chief of the Armed Forces.”

He continued, saying that the Kurdistan Regional Government’s commitment to transferring oil production and non-oil revenues to the public treasury, through the recent Cabinet decision, within the framework of the provisions of the current budget law, and the relevant Federal Court ruling, has helped resolve financial and legal obstacles between the federal government and the regional government. He indicated that “the government’s national and constitutional commitment to Iraqi citizens is reflected in its actions in all areas.”

He reiterated Iraq’s economic vision, the importance of resuming oil exports through the Iraq-Turkey pipeline, and halting all forms of smuggling and illegal practices targeting oil resources.

Earlier today, State Department spokeswoman Tammy Bruce said that Rubio emphasized to al-Sudani the need to hold accountable those involved in recent attacks targeting energy infrastructure in the Kurdistan Region of Iraq, including those operated by US companies.

Rubio also highlighted, according to the spokeswoman, US concerns about the Popular Mobilization Forces (PMF) bill currently under discussion in the House of Representatives, stressing that “enacting this type of law would entrench Iranian influence and terrorist armed groups that undermine Iraq’s sovereignty.”

Shafaq.com