Economic analysis: Reduction in the traveler’s dollar rate pushes Iraqis to the black market

Economic expert Mohammed Al-Hassani suggested on Tuesday that the decision by the Central Bank of Iraq to reduce the amount allocated for air travelers from $3,000 to $2,000 will lead to an increase in demand for dollars in the parallel market during the first phase, with some travelers resorting to buying the remaining amount from local markets.

Al-Hassani told Shafaq News Agency that reducing cash allowances will push a segment of travelers who need larger sums to cover travel expenses to compensate for the difference by buying dollars from the parallel market, which may increase the volume of demand and have an impact on the exchange rate if it is not met with an increase in supply.

He added that the impact will not necessarily be large or long-lasting, as it depends on the number of travelers and the actual size of demand, as well as the ability of bank cards to meet spending needs outside Iraq, which is what the Central Bank seeks to enhance within the policy of expanding electronic payment.

Al-Hassani pointed out that the Central Bank’s success in encouraging the use of bank cards outside Iraq may reduce pressure on the parallel market, noting that any rise in the dollar’s ​​price will be temporary if it is accompanied by regulatory and supervisory measures that ensure market stability and the availability of foreign currency.

An informed source reported earlier today that new directives were issued by the Central Bank of Iraq to reduce the share of foreign currency (dollars) for travelers to $2,000 instead of $3,000, as part of the approved mechanism to meet travel requests.

According to the source, who spoke to Shafaq News Agency, the decision will include Iraqi citizens departing through all airports and border crossings, whether they are heading for tourism, medical treatment, study, performing Hajj and Umrah rituals, as well as business trips.

The mechanism for delivering the funds will remain unchanged, through government and private banks and approved exchange companies, where the traveler receives his share after his passport is stamped and before the flight’s departure time.

According to the source, the new instructions included travelers whose circumstances require additional funds (for exceptional medical or commercial reasons) relying on electronic payment cards and loading them with additional balance, stressing that spending outside Iraq through these cards will be done according to the official exchange rate of 1320 dinars per dollar.

Shafaq.com

During June, Iraq exported one-fifth of its pre-war oil volume.

Data from Vortexa showed that Iraq exported about 780,000 barrels per day of crude oil during June, which is only about 20% of the quantities it exported before the war, making it one of the Gulf countries that has not recovered its previous levels of production and export. Arabs& Middle Easterners

In contrast, the United Arab Emirates raised its crude oil production to more than 3.8 million barrels per day during June, the highest level approaching the record since April 2020, after withdrawing from OPEC and OPEC+ on May 1, which allowed it to increase production outside the quota system.

According to informed sources, the UAE was the fastest among Gulf producers to restore its production, while Saudi Arabia, Kuwait and Iraq remain below pre-war levels, despite the gradual improvement in exports with the resumption of navigation through the Strait of Hormuz.

Shafaq.com

Shafaq News deciphers the “code” of the biggest threat to the Iraqi dinar

The Iraqi citizen may not directly feel the rise or fall of the Central Bank’s foreign currency reserves, but he feels its effects in the dollar exchange rate, commodity prices, the purchasing power of the dinar, and even in the state’s ability to cope with economic crises. Arabs& Middle Easterners

Foreign reserves are considered the “first line of defense” for the Iraqi economy, as they give the central bank the ability to protect the dinar’s exchange rate, finance import operations, and maintain confidence in the financial sector, especially in a country that depends almost entirely on oil revenues.

In recent years, the reserve has recorded a gradual decline, as it decreased from $111.6 billion at the end of 2023 to $100.2 billion in 2024, then to $97.4 billion at the end of 2025, before settling at $97.8 billion at the end of April 2026. Despite this decline, experts confirm that the reserve is still at safe levels, but it remains dependent on oil prices and the state’s financial management.

In this regard, the Prime Minister’s financial advisor, Mazhar Muhammad Saleh, said that the Central Bank’s reserves are still within reassuring limits according to international standards, as they cover Iraq’s imports for about 12 months, while the global standard is only three months.

Saleh confirmed to Shafaq News Agency that these levels give the Central Bank significant ability to intervene in the exchange market and maintain the stability of the dinar, explaining that the size of the reserves is one of the most important indicators of the strength of monetary policy. He pointed out that exchange rate stability does not depend on reserves alone, but is also linked to oil prices, government revenues, the efficiency of the banking sector, and the level of confidence in the economy.

For his part, economist Mohammed Al-Hassani believes that the central bank’s reserves are primarily fueled by oil revenues, while non-oil revenues remain of limited impact.

Al-Hassani told Shafaq News Agency that the Central Bank does not use these funds to finance the budget, but rather to maintain monetary stability, support the dinar’s exchange rate, secure the necessary dollars for imports, and bolster investor confidence in the Iraqi economy. He noted that a portion of the reserves is invested in safe and highly liquid financial instruments with international institutions, thus preserving their value and ensuring their availability when needed.

Mahmoud Dagher, the former general manager of the Central Bank, believes that the impact of the reserve on the citizen is indirect, explaining that its real impact appears when speculation on the dollar increases or confidence in the market declines.

Dagher told Shafaq News Agency that news and rumors about the economy or oil exports are driving some citizens and merchants to buy dollars, increasing demand and driving up its price on the parallel market. Since Iraq relies heavily on imports, any rise in the dollar’s value inevitably leads to higher prices for imported goods and a decline in the dinar’s purchasing power, according to Dagher.

For his part, Najm Abdul Tarish, a professor of political science at Dhi Qar University, pointed out that the continued decline in oil prices to levels ranging between $55 and $60 per barrel may put pressure on reserves, if it coincides with continued high government spending.

Abdul Tarish explained that the reserves will not decline sharply in the near term, but they could gradually erode if oil revenues continue to fall without genuine economic reforms. He stated that protecting the reserves cannot be achieved by relying solely on oil, but rather through economic diversification, increasing non-oil revenues, and encouraging investment and domestic production.

What does this mean for the citizen?

According to experts, keeping the reserves at their current levels reassures the markets and strengthens the stability of the dinar’s exchange rate, while a prolonged decline in reserves could reduce the central bank’s ability to intervene, negatively impacting the prices of the dollar and imported goods.

Thus, the central bank’s reserves are not just a number in financial reports, but one of the most important guarantees for the stability of the Iraqi economy, and largely determine the state’s ability to protect the dinar, confront crises, and maintain the purchasing power of citizens.

Shafaq.com

The government’s financial advisor reveals the fate of funds recovered from corrupt individuals.

The Prime Minister’s financial advisor, Mazhar Muhammad Salih, confirmed on Tuesday that the funds recovered from corrupt individuals represent exceptional revenues that cannot be relied upon in preparing public budgets. He indicated that these funds will contribute to reducing the deficit gap and financing projects. Salih told the official news agency, “The funds recovered from corrupt individuals are important and non-recurring exceptional revenues, as they cannot necessarily and permanently be relied upon in preparing public budgets. However, they constitute an important source of revenue in financial planning.”

He continued, “These funds are often directed towards bridging the deficit gap or financing specific projects that directly affect people’s lives, or strengthening the country’s financial reserves, and not towards building the annual budget within a long-term financial policy, because that is linked to the ceilings and capabilities of financial policy within the framework of preparing and implementing public budgets.”

He also stressed that “recovering corruption funds is important because it reduces financial waste, supports the public treasury, and enhances the confidence of citizens, investors, and the international financial community in the country’s economic system,” noting that “funds recovered from corrupt individuals represent an important support tool for the national economy, but they are not necessarily a complete replacement for the general budget, as this depends on the size and ceilings of public spending.” Corporate& Financial Crime

Burathanews.com

A corruption deal in the Ministry of Defense has been uncovered, with victims amounting to 1.6 trillion dinars.

The head of the Victorious parliamentary bloc, Faleh al-Khazali, announced on Tuesday a corruption deal in the Ministry of Defense that cost 1.6 trillion dinars, and called on Prime Minister Ali al-Zidi to investigate the matter. Corporate& Financial Crime

Al-Khazali said in a press conference, “While we support the government’s measures to address and confront corruption, we submitted an official letter to Prime Minister Ali al-Zaidi regarding corruption in the Ministry of Defense within a deal to sell scrap metal,” indicating that “the quantity is no less than 4 million tons of iron and may increase.”

He added, “According to the appraisal committee and in accordance with the State Property Sale and Lease Law No. 21 of 2013, the approximate sale was at 600,000 dinars per ton, and therefore, when this number is added, the amount is 2 trillion and 400 billion Iraqi dinars,” explaining that “by skipping over the law and through exceptional procedures, the sale was made at a price of 200,000 dinars per ton, and therefore the waste in this file is 1 trillion and 600 billion Iraqi dinars.”

He stressed that “this is not imagination or analysis, but real information,” noting that “I am directing my words to the Prime Minister regarding the waste in this file amounting to no less than 1 trillion and 600 billion Iraqi dinars.”

He stressed the need to “address this issue and invest the funds correctly,” explaining, “In our letter to the Prime Minister, we requested that this amount be allocated to support air defenses.”

He explained that “according to our information, the Ministry of Defense has a contract with South Korea to arm it with air defense systems for $2.7 billion, and the Iraqi government paid $500 million with the expectation that the batteries would be delivered in 2025. However, the lack of funding and allocation to the Ministry of Defense has affected the arming, so South Korea notified Iraq that the weapons would be sold to one of the countries that had submitted an offer to import them.”

He stressed “the need to invest this money in supporting the Ministry of Defense with air defense systems instead of these sums going into the pockets of corrupt people.”

Burathanews.com

The Integrity Commission and the Central Bank agree to uncover corruption crime networks and eliminate money laundering channels.

The head of the Federal Integrity Commission, Mohammed Ali Al-Lami, agreed today, Thursday, with the governor of the Central Bank, Nizar Nasser Hussein, to dry up the avenues for smuggling money . Currencies& Foreign Exchange

The commission said in a statement received by Mail that “the head of the Federal Integrity Commission, Muhammad Ali Al-Lami, stressed during his meeting with the governor of the Central Bank, Nizar Nasser Hussein, the importance of adopting parallel financial investigations as an effective tool in tracking the proceeds of corruption crimes and revealing their paths.”

He added that “Al-Lami also discussed, during his meeting with the Governor of the Central Bank, ways to enhance cooperation and coordination between the two sides, in order to support national efforts aimed at protecting the financial system, consolidating the principles of transparency and integrity, and mutual support in implementing procedures that would reduce corruption, money laundering, and financial violations.”

Al-Lami stressed “the need to tighten control and regulate the channels through which money is smuggled, in order to protect public funds and enhance integrity, through the integration of the efforts of the relevant institutions.”

For his part, the Governor of the Central Bank, Nizar Nasser, stressed “the importance of strengthening cooperation with regulatory bodies, given its impact on protecting public funds, reducing corruption and financial violations, enhancing confidence in the financial system, and establishing standards of transparency and integrity in line with best institutional practices.”

Miliq. news

Iraq at an economic crossroads: Fears of a rising dollar and debate over remaining in OPEC

Anxiety continues to grip a large segment of the Iraqi population, particularly those with limited incomes and low salaries, amidst economic instability and conflicting reports regarding the exchange rate of the dollar against the dinar. The Iraqi public is most concerned about market prices and their susceptibility to government decisions regarding the dinar-dollar exchange rate, as well as the future of Iraq’s membership in OPEC, its oil export volumes, and the implications of these factors for the country’s economic policy and how the government will address them.

Former MP Rasoul Radhi told Al-Maalomah that “the ongoing financial crisis, coupled with regional developments and the current difficulties in exporting oil, will lead to a significant rise in the dollar exchange rate in local markets.”

He added that “the current exchange rate exceeds 155,000 dinars per 100 dollars and may rise further in the coming days, especially since the government intends to raise the official exchange rate if the economic situation remains unchanged.”

He explained that “the measures the government may take in the coming days aim to compensate for the shortfall in oil export revenues, and the official exchange rate is likely to increase by 6,000 dinars from its current level.”

For his part, economist Abdul Rahman Al-Mashhadani told Al-Maalomah that “talking about Iraq leaving OPEC is not a simple matter at all, as Iraq cannot leave the organization because it would not be able to withstand any price war that might erupt.”
He added that “Iraq has already suffered greatly from the price war between Russia and Saudi Arabia, which prompted Riyadh to reduce the price of a barrel of oil by more than $7 while increasing production by about 500,000 barrels, leading to a drop in the price per barrel to about $18.”

He pointed out that “Iraq lacks the resources to withstand any price war, in addition to its lack of a sovereign wealth fund and diversification in exports and production. Therefore, any decrease in oil prices will significantly affect it.” He emphasized the importance of Iraq remaining within OPEC, while exerting pressure to adjust its export quota, based on its high production capacity and its status as the fifth largest country in the world in terms of oil reserves.

In a related context, Abdul Rahman al-Jazaeri, a member of the Coordination Framework, confirmed in a statement to Al-Maalomah that “Prime Minister Ali al-Zaidi is an expert in economic affairs and continues to work on finding solutions to the economic problems that Iraq is currently suffering from.”

He continued, “Al-Zaidi’s expertise in the economic field has driven him to take action to find ways out of the current crises facing the country, which may lead to an increase in the exchange rate of the dollar against the Iraqi dinar.”

He added that “Iraq is moving towards a new economic program that may include raising the value of the dollar against the dinar, due to the economic hardship and problems facing the country, which the Prime Minister is working to address according to an economic vision aimed at enabling Iraq to overcome its crisis.” Arabs& Middle Easterners

Almaalomah.me

Analysis: Iraq races to maximize its oil revenues before global demand declines

Reuters highlighted Iraq’s move to increase its oil production and maximize the benefit from its reserves, noting that Baghdad, along with the UAE, is racing against time to convert its reserves into revenues before the global shift in the energy sector leads to a decline in oil demand.

The agency stated, in an analysis published in its “Gulf Currents” bulletin, that Iraq and the UAE, despite their different economic circumstances, are adopting an approach based on the premise that postponing the exploitation of oil reserves may be more costly than accelerating their production at the present stage.

She pointed out that Iraq relies on oil for about 88% of government revenues, explaining that the recent war and the accompanying unrest prompted Baghdad to reduce its daily production from about 4.2 million barrels to less than 1.5 million barrels during May, which increased the need to raise production to compensate for lost revenues.

She added that new investments worth billions of dollars from BP, Total Energies and ExxonMobil have boosted expectations that Iraq can turn its large oil reserves into sustainable financial returns, but this trend coincides with concerns about a structural decline in global oil demand in the coming years.

She pointed out that the biggest challenge lies in the possibility that a number of producing countries will rush to increase supplies at the same time, which could lead to a glut in the market and a drop in prices, given expectations that global supply will rise by about eight million barrels per day during 2027, compared to slower growth in demand.

Reuters concluded that Iraq and the UAE’s gamble hinges on timing, amid questions about when global oil demand will permanently decline, and whether producers will be able to maximize returns from their reserves before that happens.

Iraqi Prime Minister Ali al-Zaidi had announced Iraq’s desire to raise crude oil production rates to about 7 million barrels per day, and indicated that American companies had been informed of this vision.

Shafaq.com

Central Bank of Iraq: Domestic currency issued rose to 112.9 trillion dinars by the end of April

Data from the Central Bank of Iraq, released on Thursday, showed that the volume of currency issued in the country rose to 112.896 trillion dinars from the beginning of 2025 until April 2026. News

According to data seen by Shafaq News Agency, the total currency issued during the past year amounted to 99.799 trillion dinars, and 13.097 trillion dinars were added to it during the first four months of this year.

The net currency traded outside banks rose to 104.542 trillion dinars, after reaching 92.560 trillion dinars at the end of 2025, registering an increase of 11.982 trillion dinars.

The currency held by banks also increased to 8.354 trillion dinars by the end of April 2026, compared to 7.239 trillion dinars at the end of 2025, an increase of 1.115 trillion dinars.

These indicators point to the growth in the volume of issued and circulating currency in the Iraqi economy during the first months of 2026, coinciding with an increase in circulating cash liquidity and a rise in the volume of cash held by the banking sector.

Shafaq.com

More than 8 million barrels of Iraqi oil are stuck on tankers despite the return of Gulf supplies.

More than 8 million barrels of Iraqi crude oil remain stuck on tankers, while more than 100 million barrels of crude oil and petroleum products that had accumulated in the Gulf have begun to gradually return to global markets, providing a temporary relief to supplies, according to data from Standard & Poor’s Global Commodity Insights.

The report stated that Iraq has emerged as one of the leading countries in the recovery of oil production in the Middle East, along with the Sultanate of Oman, while major refineries in Saudi Arabia, Bahrain and Kuwait still need several months to restore their full operational capacity.

According to the data, the accumulated quantities of crude oil amounted to about 90.5 million barrels, while the remaining quantities were distributed among various petroleum products, with more than 90 million barrels of crude oil on board tankers waiting to leave.

Estimates also showed that Iraq has about 8.3 million barrels of oil stuck on tankers, coming after Iran (31.7 million barrels), Saudi Arabia (18.7 million barrels), and the UAE (17 million barrels), while Kuwait recorded 8.1 million barrels, Qatar 4 million barrels, and Oman 2.2 million barrels.

The report indicated that most Gulf oil exports are destined for East Asian markets, meaning that the return of these supplies could affect the balance of global supply and demand, and be reflected in the movement of oil prices and the revenues of producing countries, at a time when global banks expect exports to return to pre-war levels during the current month of July, with continued concerns that the impact of these quantities will be temporary before the actual production in the region recovers.

Shafaq.com