Between bonds and gold: An economic roadmap to protect Iraq’s funds from the shocks of regional conflict
Economic expert Mohammed Al-Hassani said on Tuesday that Iraq needs to reconsider the management of its foreign reserves, especially between US bonds and gold, in light of global economic fluctuations.
Al-Hassani told Shafaq News Agency that “US bonds remain an important liquidity tool and generate a steady return, but they are highly dependent on the decisions of the Federal Reserve and interest rates, which exposes the country’s holdings to the risk of devaluation if interest rates are raised.”
He added that “gold is a safe haven in times of crisis and inflation, and it preserves purchasing power, but it does not generate an annual return like bonds and does not solve the problem of daily liquidity for government spending or paying salaries.”
Al-Hassani pointed out that “the best strategy for Iraq lies in balancing the two, that is, keeping part of the reserves in US bonds to obtain liquidity and returns, and allocating part in gold to protect the reserves from economic or political risks.”
He stressed that this “step could help Iraq reduce its dependence on the dollar and protect its economy from any sudden fluctuations in global markets, while maintaining sufficient financial flexibility to support national projects and government spending.”
The war that broke out on February 28, 2026, between the United States and Israel on one side, and Iran on the other, caused an almost complete paralysis of traffic in the Strait of Hormuz, the passage through which about 4.5% of total annual global trade passes, leading to a decline in navigation to very low levels.
As a result of the disruption to shipping through the Strait of Hormuz, Iraqi oil production has declined sharply from 4.3 million barrels per day to 1.3 million barrels per day.
This decline has led to Iraqi exports falling to less than 800,000 barrels per day, and a loss of $128 million per day after oil production stopped, according to the “Eco Iraq” observatory.
Shafaq.com