🚨 The Central Bank of Iraq Moves to Solve the Cash Problem 💵🔥
(Iraq cash crisis • Iraqi dinar currency balance • CBI new guidelines)
Every week, articles about Iraq’s cash imbalance emerge — and this time, the Central Bank of Iraq (CBI) is taking direct action to fix the increasing problem of currency rejection, especially with small denominations.
This issue has become so severe that billions of dinars are accumulating in people’s homes, creating a distortion in the market and directly affecting liquidity, payments, and even the Iraq salary distribution system.
💡 What’s the Problem? Small Denominations Are Being Rejected
According to the latest reports, many banks, currency dealers, and shops are refusing small Iraqi dinar notes, including:
250 IQD
500 IQD
1,000 IQD
These lower denominations are the least traded and most rejected in the market, despite being fully recognized legal tender.
The result?
Millions of citizens now hoard small notes, worsening the cash imbalance and hurting local commerce.
🏦 CBI Responds: New Mandatory Currency Guidelines
To solve the liquidity distortion, the Central Bank of Iraq issued new, strict instructions requiring:
✔️ All banks
✔️ All private financial institutions
✔️ All licensed currency dealers
✔️ All government offices
to accept ALL Iraqi dinar denominations, even if:
worn
old
slightly torn
This reverses a long-standing practice where small notes were accepted at below face value when exchanged for dollars.
Now, under new CBI rules:
👉 Every note must be accepted at full face value — no exceptions.
📉 Why the CBI Is Taking Action Now
The CBI revealed several key issues:
🔸 1. Cash imbalance between denominations
Small notes are not circulating — causing severe currency distortion.
🔸 2. Cash shortage reported earlier by the CBI
The bank admitted it lacked balance among denominations in the market.
🔸 3. Citizens are withholding 15 trillion dinars
While Iraq spends 7 trillion IQD monthly on salaries, citizens are holding onto double that amount — keeping money out of circulation.
🔸 4. Salary payments are not returning to the market
Money distributed by the government is not flowing back into banks or commerce.
Economist Haider Sheikh confirmed:
“The central bank wants to solve the cash problem and eliminate the excuse of currency in transactions.”
🏛️ CBI’s Goal: Restore Full Cash Flow Before Digital Dinar Expansion
These measures are expected to:
✔️ Increase liquidity
✔️ Boost circulation of all denominations
✔️ Remove excuses from banks and dealers
✔️ Balance currency supply
✔️ Support upcoming digital transformation
This aligns with the broader CBI modernization strategy, including the Digital Dinar rollout, which aims to eliminate fraud and stabilize the market.
✨ Market Impact
Currency dealer Anwar Mousavi told Kurdistan24 that the market has no real shortage, and that all institutions can supply any needed denomination as long as they follow CBI guidelines.
The new mandatory acceptance rules should restore confidence in lower denominations and support smoother economic transactions.
🎯 Bottom Line
The Central Bank of Iraq is taking powerful steps to restore cash balance, forcing banks and dealers to respect every denomination.
This resolves:
✔️ liquidity shortages
✔️ market distortions
✔️ currency rejection issues
✔️ payment flow imbalances
It's a significant step toward financial stability — and preparation for Iraq’s wider monetary reform path.
🧠 Q&A
❓ Why is the Central Bank of Iraq enforcing new cash guidelines?
To fix the currency imbalance, force banks to accept all denominations, and restore liquidity.
❓ What denominations were being rejected in Iraq?
Small notes: 250, 500, and 1,000 IQD.
❓ How much cash is being held by Iraqi citizens?
Approximately 15 trillion dinars, double the monthly salary distribution.
❓ Will banks now accept old or worn notes?
Yes. Under new CBI orders, all notes must be accepted at full value.
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