Multiple exchange rates

In the heart of Baghdad, amidst the constant monitoring of currency exchange rates, the Iraqi economy breathes with every fluctuation in the dollar’s value. With each rise or fall, voices of anxiety rise, or the pulse of the markets slows, reflecting the fragility of an economic structure still reliant on a single resource. Today, with expectations of increased global oil supply and falling crude prices, crucial questions arise: How can Iraq safeguard its economy? And can a selective exchange rate policy be part of the solution?

Expert readings indicate that this policy, if implemented as part of a comprehensive reform package, could constitute a smart mechanism for adapting to international storms and protecting the citizen at the same time.

The Iraqi currency market is currently experiencing relative stability, with the dinar’s exchange rate against the dollar recently rising in the parallel market. In Baghdad, it reached 1420 dinars for selling and 1415 dinars for buying. Experts attribute this stability to several factors, most notably the trend of traders using the official Central Bank platform to purchase dollars, improved confidence resulting from relative security and the success of the recent elections, and the effectiveness of the Central Bank’s oversight measures in curbing smuggling.

However, this calm may be temporary. The international landscape suggests the possibility of an oil crisis with the potential return of oil supplies from countries like Iran, Venezuela, and Russia should geopolitical conditions shift. Such a scenario, while hypothetical in the short term, could lead to an unprecedented global oversupply and a sharp drop in prices, placing the Iraqi economy, which relies on oil for approximately 90% of its budget, on the brink of an existential crisis.

In the face of these challenges, the idea of ​​adopting a selective or multi-level exchange rate system emerges. This idea is based on a simple but profound economic principle of directing the state’s limited resources to protect the citizen and stimulate local production, instead of paying the bill for importing luxuries.

How does this policy work?

A subsidized exchange rate is granted for the import of basic and vital goods that are part of the citizen’s daily life, such as wheat, medicines, raw materials for local production, and agricultural machinery.

• An intermediary exchange rate may be applied to intermediate sectors or to specific strategic sectors that need reconstruction.

A free or high exchange rate is applied to the import of luxury goods, such as luxury cars, modern electronics, perfumes and luxury products.

• Potential benefits:

Protecting the poor and middle class by securing basic goods at reasonable prices, thus limiting imported inflation in essential goods.

Encouraging local production makes importing raw materials for production cheaper, while imported luxury goods become expensive, thus stimulating demand for local products.

Rationalizing government spending and hard currency: Directing precious oil dollar reserves towards what is truly necessary for the economy and the citizen.

• Increased government revenues: through the price difference achieved from selling dollars to import luxury goods at a higher price.

However, many economists warn against viewing any exchange rate adjustment, including multiple exchange rates, as a magic bullet or a one-off solution. Economist Mahmoud Dagher emphasizes that “changing the exchange rate cannot be the sole cure for the crisis, as long as it is not accompanied by a set of complementary measures.”

The idea of ​​multiple exchange rates in Iraq is not mere economic fantasy; it is a difficult strategic choice that requires political courage and administrative acumen. It is not a magic wand to rescue an economy suffering from chronic structural problems, but it could be a smart defense mechanism that protects vulnerable segments of society and preserves the country’s resources in the lean years that may lie ahead. The decision now is one of will: Will Iraq begin, now, to build a productive and resilient economy, or will it remain captive to rent-seeking and the dominance of a single revenue stream? The answer will be determined by the decisive measures the next government takes on the path to genuine and comprehensive reform.

Alsabaah.iq

Advisor to the Prime Minister: Iraq’s reserves protect the dinar from current fluctuations

Iraqi Dinar-Dollar auctionsThe economic advisor to the Prime Minister, Mazhar Muhammad Saleh, confirmed that there is no direct link in the short term between current financial developments and monetary stability.

Saleh told Al-Furat News Agency that: “The monetary authority still has sufficient foreign reserves that enable it to protect macroeconomic stability and finance the deficit in the current account of the balance of payments.”

He added, “These reserves have high efficiency standards that ensure the Central Bank’s continued ability to enforce discipline in the money market, particularly in the exchange market, in order to maintain the stability of the currency’s value and the movement of external liquidity.”

Saleh affirmed that “the monetary fundamentals remain strong and capable of absorbing any potential fluctuations.”

Alforatnews.iq

Branches of Rafidain Bank outside Iraq face the risk of closure due to “financial problems and violations”.

Informed sources revealed on Monday that the branch of the Iraqi state-owned Rafidain Bank in the UAE capital, Abu Dhabi, is facing the risk of closure due to administrative and financial problems and violations that were detected during the past period.

The sources told Shafaq News Agency that “there are concerns about the repercussions of these continued violations on the bank’s operations and its external reputation.”

She added that the problems are not limited to the Abu Dhabi branch alone, but extend to a number of the bank’s branches abroad, which also suffer from varying administrative and financial violations.

The sources also indicated that regulatory authorities are required to open extensive investigations to determine the extent of the violations and hold those responsible accountable in order to protect the bank’s funds and prevent the exacerbation of financial and administrative crises in its foreign branches.

The Yemeni Minister of Information, Culture and Tourism, Muammar Al-Iryani, announced at the beginning of October 2025 the closure of the Iraqi state-owned Rafidain Bank branches in Sana’a.

Al-Iryani said in a post on the “X” website that “the decision by the Iraqi Rafidain Bank to close its branch in Sana’a and end its financial and banking activity is a step in the right direction, and a direct result of international efforts aimed at drying up the sources of funding for the Houthi group.”

He pointed out that this measure “reflects a positive response to governmental warnings and American and international pressure, and sends a clear message to the rest of the regional and international financial institutions, about the need to review their activities, and to ensure that they do not fall into the circle of exploitation or employment to serve the agendas of the Iranian regime and its terrorist arms in the region.”

Al-Iryani stressed that “the Houthis have turned the financial and banking institutions operating in the areas under their control into tools for plundering the money of Yemenis and financing their cross-border terrorist activities.”

Last August, US Congressman Joe Wilson accused the state-owned Rafidain Bank of conducting financial transactions with the Houthi group in Yemen, threatening to cut off US funding to Iraq as a result.

Wilson wrote in a post on the “X-formerly Twitter” platform that “the Iraqi state-owned Rafidain Bank is conducting financial transactions on behalf of the Houthis, a terrorist organization,” adding, “We have a name for these countries: state sponsors of terrorism.”

He added, “I will work to cut off funding to Iraq during the next appropriations legislation” in the United States budget.

Wilson also urged the US Treasury Department to “punish” Rafidain Bank.

Shafaq.com

The Federal Court receives the final election results for the purpose of ratifying them.

The Independent High Electoral Commission sent the final results of the sixth parliamentary elections to the Federal Supreme Court (the highest judicial authority in Iraq) on Monday for ratification.

This came according to what was announced by the Commission’s spokesperson, Jumana Al-Ghalai, in a brief audio statement that she circulated to the media, including Shafaq News Agency.

The Iraqi electoral judiciary resolved all 853 appeals against the election results on Sunday.

The political scene in Iraq has been in a state of anticipation for days, awaiting the Electoral Commission’s decision on the last appeals submitted regarding the results of the 2025 parliamentary elections.

The commission conducted the general and special voting on November 9 and 11, as part of the sixth Iraqi parliamentary session, within the framework of the political process that was formed after 2003. The Shiite lists won 187 seats, the Sunni lists won 77 seats, and the Kurdish lists won 56 seats.

The commission announced that the “Reconstruction and Development” alliance, led by Mohammed Shia al-Sudani, made significant progress, achieving 1,317,346 votes in 12 governorates, followed by the Progress Party, headed by Mohammed al-Halbousi, and then the State of Law coalition, led by Nouri al-Maliki.

Shafaq.com

Officially, Chevron is negotiating with Baghdad to fill the void left by Lukoil in the West Qurna 2 oil field.

On Monday, the Minister of Oil discussed the development of the oil sector with the American company Chevron, while an informed source revealed that the negotiations were for the company to take over the West Qurna 2 field instead of the Russian company.

The Ministry of Oil said in a statement received by Shafaq News Agency that “Deputy Prime Minister for Energy Affairs and Minister of Oil, Hayyan Abdul Ghani, received a delegation from the American company Chevron.”

She added, “During the meeting, topics related to the development of the gas and oil sectors were discussed.”

For its part, an informed source revealed to Shafaq News Agency that “the meeting witnessed negotiations between the ministry and the company, for the latter to take over the West Qurna 2 field instead of the Russian Lukoil.”

Last Monday, the Iraqi Ministry of Oil invited several American oil companies to enter into negotiations regarding control of the West Qurna-2 field, and to seek to transfer the operation of the field to one of the companies through competitive bids .

It is worth noting that the Russian company Lukoil declared force majeure at the West Qurna-2 field on November 19th, after its operations were disrupted due to Western sanctions imposed on it, as it sent an official letter to the Iraqi Ministry of Oil stating that there were force majeure circumstances preventing it from continuing operations .

The West Qurna 2 field is one of the huge oil fields in southern Iraq. It was discovered in 1973, and its operating agreement includes the Russian company Lukoil with a 75% stake and the Iraqi South Oil Company. The field forms a key pillar of the Iraqi economy through its contribution to increasing oil production.

Reuters revealed last week that ExxonMobil had contacted the Iraqi Oil Ministry to express its interest in buying the majority stake held by Russia’s Lukoil in the giant West Qurna-2 oil field.

Shafaq.com

The Iraqi government is surprised by the recent statements of the US envoy regarding the internal situation in Iraq.

The Iraqi government expressed surprise at the recent statements made by the US envoy regarding the internal situation in Iraq.

A statement from the Iraqi Ministry of Foreign Affairs said that “Deputy Prime Minister and Minister of Foreign Affairs, Fuad Hussein, met Sunday, December 7, 2025, with the US President’s Special Envoy for the Syrian file, Thomas Barak, on the sidelines of the Doha Forum. They reviewed the stages that Iraq went through to consolidate its democratic approach after 2003, and the complex challenges that accompanied these transformations, stressing that Iraq remains committed to its democratic choice and to building its institutions, and rejecting any form of dictatorship from which it suffered for decades.”

In a related context, the minister pointed to the challenges facing Syria, the efforts being made on the political track, and the role of the US envoy in this matter.

Fuad Hussein also expressed the Iraqi government’s “surprise at the recent statements of the US envoy regarding the internal situation in Iraq, explaining that it was important to clarify the vision in a different way and in a way that reflects the reality of what has been achieved in Iraq in terms of political development and relative stability, stressing that the choices of the Iraqi people are respected, and that democracy and the federal system are established in the constitution, and have become a firm path that has no alternative despite the challenges.”

The minister stressed “the importance of joint cooperation between Iraq and the United States of America, and strengthening the strategic partnership between the two countries, praising the role played by the United States within the international coalition to fight the terrorist organization ISIS.”

He also stressed “the need to represent all components of the Syrian people in the political process, and to begin a comprehensive national dialogue, while affirming the readiness of the Iraqi government to provide support and advice and to benefit from the Iraqi experience in dealing with political and security crises.”

For his part, Thomas Barrack expressed his “thanks and gratitude to the Minister for the historical and political vision he presented regarding Iraq and what it witnessed before 2003, stressing that the American administration views the Iraqi experience with respect and that what he stated pertains to the aspect of the American experience in Iraq.”

The US envoy also touched on “the current situation in Syria, stressing the importance of dealing fairly with all Syrian components and supporting efforts to find solutions to the situation, and this is a matter for the Syrian people to decide.”

The US special envoy to Syria, Tom Barrack, had criticized the policy pursued by previous US administrations in Iraq.

Barak said in an interview with The National that “Iran stepped in and filled the vacuum in Iraq because we created a crazy structure that gave Iranian militias more influence than the parliament.”

Barak considered Iraq a clear example of mistakes that the United States should not repeat, according to what Al Arabiya Net reported.

Burathanews.com

Sudani directs efforts to overcome obstacles to establishing “Rafidain First Bank”

Sudani directs efforts to overcome obstacles to establishing Rafidain First BankPrime Minister Mohammed Shia al-Sudani directed on Wednesday that obstacles be removed regarding the establishment of the new “Rafidain First Bank” project, stressing the importance of restructuring Iraqi state-owned banks.

The Prime Minister’s Media Office stated in a statement that Al-Sudani chaired a meeting yesterday to follow up on the restructuring of Al-Rafidain Bank and the establishment of the new (First Al-Rafidain Bank), in the presence of representatives of the Ernst & Young consulting firm.

The statement added that Al-Sudani listened to a detailed explanation of the latest work steps completed, all the requirements of the founding contract, laws and instructions that must be available, in addition to determining the technical and founding committee for the new bank, determining the bank’s shareholders, and all the legal aspects and the required trademark.

Al-Sudani emphasized the importance of restructuring Iraqi state-owned banks to revitalize the public banking sector, ensuring the new bank utilizes the latest digital and technological advancements to provide sophisticated financial and banking services. The Prime Minister directed officials to closely monitor the project’s progress, address any administrative or bureaucratic obstacles hindering its swift completion, and ensure the new bank becomes fully operational.

Alsabaah.iq

Al-Sudani: The Faw Port and Development Road project is a “dream” project to create a new Iraq

Outgoing Prime Minister Mohammed Shia al-Sudani affirmed on Thursday that Iraq is open to partnerships based on development, manufacturing, and services, considering the Faw Port project and the development road as a “dream” project for the country.

This came in a speech he delivered during his attendance at the Iraqi-British Business Council conference held in Basra Governorate.

In his speech, Al-Sudani said, “Our government has adopted a balanced policy and has invested in Iraq’s location to be a bridge between East and West, and part of a broader vision for stability and development in the region.”

He added that “Iraq’s strength lies in its oil and gas resources, as well as the Faw port, the development route, and its location as a corridor linking the Gulf, Asia, and Europe.”

Al-Sudani also expressed “technical and investment cooperation with experienced companies, including British companies and companies that are members of the Iraqi-British Business Council.”

He stressed the need to develop the logistics, ports, docks and maritime transport sector as it represents an important economic resource.

Al-Sudani also said, “We have achieved optimal use of oil and gas resources, and Iraq was losing $8-9 billion annually due to importing oil derivatives and burning gas,” noting that “during the 3 years of the government’s term, we have developed a clear vision to solve the problems related to oil and gas investment.”

He described the “Al-Faw Port and Development Road” project as a “dream” project to transform into a real economy and create a new Iraq, noting that “for the first time since the establishment of the Iraqi state, we have a sea view of the Gulf through the navigation channel, which is 20 meters deep and 23 kilometers long.”

Earlier this morning, Al-Sudani arrived in Basra Governorate, in the far south of the country, to inaugurate the first section of the Development Road (the road linking Faw and Umm Qasr, with a length of 62 km), and to participate in the Iraqi-British Business Council conference.

In April 2024, Iraq, Turkey, the UAE and Qatar signed a four-way agreement for the Iraq Development Road project, under the auspices of Iraqi Prime Minister Mohammed Shia al-Sudani and Turkish President Recep Tayyip Erdogan.

The project, which includes a 1,200-kilometer road and railway within Iraq, aims to promote economic integration between East and West, increase international trade, and facilitate the movement of goods.

The project’s investment budget is approximately $17 billion, divided between $6.5 billion for the highway and $10.5 billion for the electric railway. It will be implemented in three phases, ending in 2028, 2033, and 2050.

The project is expected to provide around 100,000 job opportunities in the first phase and one million job opportunities upon completion, and will promote economic growth and regional and international cooperation.

Shafaq.com

Maliki’s coalition calls on the framework for an urgent meeting and the removal of Hezbollah and the Houthis from the list of terrorist organizations.

The State of Law Coalition, led by Nouri al-Maliki, on Thursday called on outgoing Prime Minister Mohammed Shia al-Sudani to reverse the Iraqi government’s decision to classify the Lebanese Hezbollah and the Yemeni Ansar Allah movement as “terrorist” organizations, calling on the blocs of the Coordination Framework to raise this issue during their next meeting.

State of Law MP Ibtisam al-Hilali told Shafaq News Agency that “the Iraqi government, headed by caretaker Prime Minister Mohammed Shabaa al-Sudani, surprises us every day with wrong and incorrect decisions, the latest of which is classifying the Islamic resistance in Lebanon and Yemen as terrorist organizations and freezing their funds.”

She added that “the caretaker government took advantage of the end of the fifth session of the House of Representatives and the absence of the House’s oversight and legislative role, and began issuing wrong and incorrect decisions, such as nominating US President Donald Trump for the Nobel Peace Prize, and classifying the Islamic Resistance as terrorist organizations to please America and its allies.”

Al-Hilali stressed that “the caretaker government must immediately cancel this decision and remove the Islamic resistance in Lebanon and Yemen from the list of terrorism, and not give in to appease America and its allies.”

She stressed that “the leadership of the coordinating framework must discuss this matter at the next meeting and not remain silent about it. If the situation continues as it is, Iraq is heading towards the unknown, as the United States of America and its allies in the region want.”

The Iraqi government’s Committee for Freezing Terrorist Funds had listed the Lebanese Hezbollah and the “Ansar Allah-Houthi” group in Yemen on terrorism lists, in implementation of a package of Security Council resolutions on combating terrorism and its financing, according to what was stated in issue 4848 of the Iraqi Gazette issued on November 17, 2025.

The committee’s decisions are based on the Anti-Money Laundering and Counter-Terrorism Financing Law No. 39 of 2015, the Terrorists’ Funds Freezing System No. 6 of 2023, as well as UN resolutions relating to ISIS and Al-Qaeda and the entities and individuals associated with them, in addition to other relevant sanctions systems, which obligate member states to freeze the funds of persons and entities listed on international sanctions lists.

Under the decision, all banks, financial institutions and relevant authorities in Iraq are obligated to freeze the movable and immovable assets belonging to the names included, and to prevent financial or banking dealings with them directly or indirectly, until other decisions are issued that require lifting or amending the freeze, with the amendments to the lists being published in the Official Gazette and the website of the Anti-Money Laundering and Counter-Terrorism Financing Office.

In this regard, a government official told Shafaq News Agency that the measure comes within the framework of Baghdad’s efforts to align its legal and regulatory system with the requirements of the Financial Action Task Force (FATF) and Iraq’s international obligations in the field of combating terrorism and drying up its financial sources, while continuing to update the national lists according to the amendments received from the sanctions committees in the Security Council.

Shafaq.com

The collapse of the Iranian currency: a crisis that shakes markets and confounds Kurdistan’s traders.

The Iranian rial has been experiencing a sharp decline for days, the most severe in years, in a rapid downward wave that has cast a shadow over the markets of Iraqi Kurdistan, especially the banking sector, which relies heavily on the movement of the toman in daily buying and selling.

According to a Shafaq News Agency correspondent in Sulaymaniyah, the price of 100 US dollars reached about 12 million and 150 thousand Iranian Tomans, an unprecedented level that prompted many traders to recalculate their accounts.

Kawa Yahya, a currency trader in Sulaymaniyah, told Shafaq News that the recent decline was unexpected, stressing that demand for the dollar inside Iran rose exceptionally following the escalation of tensions between Tehran and both the United States and Israel, which put direct pressure on the local currency.

Yahya points out that what is happening today cannot be explained by economic standards alone, and in his opinion, “the political factor is the main driver of the current decline,” expressing surprise that a country with such broad local self-sufficiency as that achieved in Iran cannot prevent this decline in its currency.

He adds that many currency traders in the Kurdistan Region have suffered significant losses as a result of the rapid decline, especially those who had been holding large quantities of Toman during the past period.

In the context of a broader economic analysis, economist Ismail Mohammed reveals to Shafaq News Agency that the current crisis has complex roots, starting from the outside and not ending at the inside.

The expert confirms that the deterioration of relations between Iran and the United States and European countries has put the local currency under direct political pressure, saying that “any disturbance between a country and America or Europe is quickly reflected in the value of its currency, and the Iranian rial is no exception.”

But at the same time, he points to the existence of concurrent internal reasons, represented by a package of economic decisions that the Iranian government is preparing to implement at the beginning of next year, most notably raising fuel prices and increasing the prices of a number of local goods in exchange for government plans to raise employee salaries, which are measures that he believes will double the pressure on the currency and open the door to a new wave of inflation.

The agency’s correspondent reports that the currency exchange markets in Sulaymaniyah, Halabja and Garmian have witnessed a clear state of confusion over the past two days, as a number of traders have reduced their transactions in Toman while waiting for the market to stabilize, while others reported a decline in demand from customers who usually relied on the Iranian currency for daily transfers or for purchasing goods coming from the Iranian side.

This decline comes in the context of a long downward trend witnessed by the Iranian currency during 2025. According to a quick tracking, the year began with a price of approximately 4.8 million tomans per 100 dollars, then it rose to about 7.5 million tomans in the middle of the year following a new round of US sanctions. With the fall, and with the increase in regional tensions, the price exceeded 10 million tomans, reaching 11.15 million tomans in December, which is the lowest level in more than ten years.

Analysts agree that continued political tension and the absence of radical economic solutions could push the currency down further in the coming weeks unless Tehran intervenes with effective steps to curb the decline.

Shafaq.com