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Government advisor: Three factors have stripped the parallel exchange market of its price influence and diversified our financial reserves.

 

  
7/7/2025
 

The Prime Minister's economic advisor, Mazhar Mohammed Salih, confirmed that the stability of the price structure and the decline in annual inflation rates in Iraq are the result of the success of three integrated economic policies that worked in a coordinated manner within the framework of the state's general economic policy.

 

Saleh told Al Furat News that "the fiscal policy has contributed significantly to supporting prices through the general budget, whose expenditures constitute more than 13% of the gross domestic product," noting that "this support has been reflected in expanding social safety nets through food baskets, fuel price subsidies, and support for farmers, in addition to providing wide-ranging government services."
He added, "Monetary policy, in turn, has achieved tangible success in maintaining the external value of the dinar by controlling domestic liquidity levels through the introduction of electronic payment systems and increasing demand for foreign currency at local banks via their correspondents abroad. This has contributed to reducing financial transfer times and implementing compliance rules related to money movement risks."
Saleh pointed out that "the third of these policies was price defense through the establishment of a hybrid market network, which provided a wide supply of goods at stable prices and directly impacted the local market by creating price competition that reduced opportunities for speculation. As a result of these three factors, the effects of the parallel exchange market (the black market) were neutralized, especially with regard to generating inflationary expectations, the effects of which gradually faded," he said.
He explained that "there are commodity stocks available to the state and the private sector, some of which have a shelf life of three to five years, particularly with regard to spare parts and durable goods, which enhances market stability in the medium term."

Regarding the increase in gold reserves, Saleh explained that "this is a successful monetary policy tool for diversifying Iraq's foreign reserves portfolio," noting that "gold represents a safe haven against fluctuations in global exchange rates and interest rates." He added that "this diversification, which includes various foreign currencies and monetary gold, is based on precise international standards to protect the country's assets from value fluctuations between currencies."

Regarding the impact of OPEC+ decisions, Saleh emphasized that "Iraq is part of the international consensus within the organization regarding oil production levels, and that the national oil policy enjoys significant flexibility that enables it to maintain export levels within Iraq's quota, thus mitigating the impact of lower oil prices on public revenues."

In this context, he noted that "Triennial Budget Law No. 13 of 2023 includes flexible financial tools to address any emergency gaps through the possibility of resorting to bridge borrowing from the local financial market, supported by a monetary policy that provides sustainable liquidity through open market instruments, in accordance with the provisions of the Central Bank of Iraq Law No. 56 of 2004."

The advisor concluded his remarks by emphasizing that "the economic stability Iraq is witnessing today is the result of the integration of fiscal, monetary, and pricing policies into a unified framework that promotes sustainable development and supports the implementation of the government's program and comprehensive economic reforms."

Raghad

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