Frank26 Update: Sudani Confirms the CBI Holds the Key to the Exchange Rate
Frank26 Iraq Boots-on-the-Ground Report: What Was Really Said
A recent televised appearance by Prime Minister Mohammed Shia al-Sudani has reignited discussion around Iraq’s monetary reform and exchange rate authority.
What makes this moment important is not what was explicitly said — but how it was said.
Sudani’s Statement: The Exchange Rate Is the CBI’s Responsibility
FIREFLY (Iraq Boots-on-the-Ground):
Sudani made it clear:
The government has reduced the gap between:
The official rate
The parallel (street) market rate
Solely the responsibility of the Central Bank of Iraq (CBI)
This distinction is critical.
The government can:
Stabilize markets
Implement fiscal discipline
Reduce currency spread
But it cannot legally announce or execute a rate change.
Why Sudani Is Speaking Now
FRANK26 Analysis:
This appears to be Sudani’s role in the process:
Preparing Iraqi citizens psychologically
“Massaging” monetary reform messaging
Softening the population for future value changes
Saying the obvious — without violating the constitution
Iraq’s constitution forbids officials from directly stating:
“We are about to raise the value of the currency.”
But they can:
Suggest it
Hint at it
Illustrate mechanisms
Discuss removing zeros to add value
Educate without announcing
This is expectation management, not coincidence.
The Importance of the “Three Zeros” Language
Sudani and CBI-linked messaging often refer to:
Removing the three zeros
Adding purchasing power
Improving currency efficiency
This language:
Normalizes the concept of value change
Reduces public shock
Builds acceptance before execution
In short:
👉 Education before activation
The 1310 Rate: Alaq’s Statement Under the Microscope
OMAR Reminder:
CBI Governor Alaq stated:
“1310 will be active until the end of December.”
He did not explicitly say what happens after.
FRANK26 Commentary (Opinion, Not Fact):
Frank offers a personal interpretation:
If something is only active until December 31st,
then logically it may not be active on January 1st.
Important clarification:
This is Frank’s opinion
This is not an official CBI statement
Misinterpretation online is common
Why Discipline Matters Right Now
Frank also issued an important warning:
Social media is filled with undisciplined speculation
Words are twisted into guarantees
Opinions become “facts” overnight
This is dangerous during sensitive monetary transitions.
Responsible analysis requires:
Separating statements from interpretation
Understanding constitutional limits
Respecting timing and process
Featured Snippet: Who Controls the Exchange Rate in Iraq?
Who has the authority to change Iraq’s exchange rate?
Only the Central Bank of Iraq (CBI). The government can stabilize markets and reduce the gap between official and parallel rates, but it cannot legally announce or implement a rate change.
Why This Messaging Matters Right Now
Sudani speaking publicly about:
Exchange rate responsibility
Market gap reduction
CBI authority
…is not accidental.
It signals:
Alignment between GOI and CBI
Confidence in reform progress
A need to educate citizens before change
Historically, this type of messaging appears late in the reform cycle, not early.
Q&A Section
Did Sudani announce an RV?
No. He cannot legally do so.
Does this confirm a rate change is coming?
It confirms preparation and authority, not timing.
Is 1310 ending on January 1st?
That is speculation, not official confirmation.
Why talk about removing zeros instead of “RV”?
Because it is constitutionally acceptable language that prepares citizens.
Key Takeaway
This update is not about hype.
It is about:
Who speaks
What they are allowed to say
Why they are saying it now
Sudani is doing his part.
The CBI will do theirs — when the system is ready.
No Rumors. No Guarantees. No Misquotes.
Facts, context, and disciplined analysis only.
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Frank26
[Iraq boots-on-the-ground report]
FIREFLY:Sudani was on TV yesterday...talking about it's the responsibility solely of the CBI to change the exchange rate. He said he government has...lowered the gap between the official rate and the parallel market rate. But to actually change the rate is the responsibility of the CBI.
A NEW FINANCIAL ROADMAP FOR IRAQ: THE SUDANESE GOVERNMENT BEGINS REFORMING SALARIES AND BENEFITS
A NEW FINANCIAL ROADMAP FOR IRAQ: THE SUDANESE GOVERNMENT BEGINS REFORMING SALARIES AND BENEFITS
In a move described as bold and unprecedented, the government of Prime Minister Mohammed Shia al-Sudani is moving towards redrawing the financial map of Iraq by opening one of the most sensitive and complex files: the file of salaries and senior privileges in the state.
The government is putting forward a reform vision aimed at streamlining spending and controlling operational expenses, with a focus on ending special privileges for presidencies and senior ranks, in an attempt to achieve financial justice, protect social stability, and ensure the sustainability of the general budget in light of internal challenges and accelerating global economic fluctuations.
On Monday, Prime Minister Mohammed Shia al-Sudani chaired an extraordinary meeting of the Ministerial Council for the Economy, during which a number of important decisions were made aimed at rationalizing expenditures and maximizing the state’s financial resources.
Regarding spending reduction measures, the Council discussed the allocations and salaries of the three presidencies, and the Prime Minister directed that an urgent review of this file be conducted, and that work be done to equalize the salaries and allowances of all employees of the Presidency of the Republic and the Presidency of the House of Representatives with the employees of the Presidency of the Council of Ministers, in a step aimed at achieving job fairness and reducing financial disparities.
Al-Sudani also directed the relevant committee in the Ministry of Planning to make the necessary update to the report on unifying the salary scale for all state employees, and to take into account the recommendations submitted in this regard.
The council decided to reduce the allocations for state employees’ travel by 90%, and to prohibit it except in cases of extreme necessity and with the approval of the relevant minister, in addition to reducing the rates of supervision and monitoring of new projects.
As part of reforming the social support system, the Council tasked the Minister of Trade with reviewing the ration card and reforming its mechanisms to ensure that it is directed to its actual beneficiaries from the vulnerable classes.
As for the procedures for maximizing revenues, the Prime Minister directed the ministerial committee formed under Cabinet Resolution No. (550) to reconsider the calculation of non-oil revenues in the Kurdistan Region of Iraq, which are currently deposited as a lump sum into the Ministry of Finance’s account, in coordination with the regional government.
The Council also stressed the need to support and enhance the implementation of the pre-declaration system in the Customs Authority in coordination with the Central Bank of Iraq, to strengthen electricity collection, to review the current tariff, and to adopt automation and electronic payment exclusively in all collection operations, especially in the electricity sector, the Baghdad Municipality, and municipalities throughout the country.
A clear roadmap for financial reform
In this regard, the Prime Minister’s Advisor for Financial Affairs, Mazhar Muhammad Salih, affirmed that the meeting of the Ministerial Council for the Economy with Prime Minister Muhammad Shia’ al-Sudani constituted a strategic milestone for setting a clear roadmap for financial reform, confronting the challenges of fluctuating oil prices, and reducing dependence on oil revenues.
Saleh told Al-Eqtisad News in a special statement that the meeting was dedicated to reviewing the reality of fiscal policy in Iraq, and the concept of fiscal consolidation as a tool to address the deficit and reduce the debt gap, especially internal debt, through re-engineering costs and controlling public spending, without resorting to shock measures or harsh economic surgeries, and in a way that preserves social stability.
He added that the Iraqi economy cannot remain dependent on oil revenues in light of global geopolitical fluctuations, noting that operational expenses constitute approximately 70% of total public spending, which necessitates a review of them according to clear and well-thought-out priorities.
Shocking figures
Iraq spends about 100 trillion dinars annually on salaries for employees and retirees, at least 40 trillion of which goes to senior officials.
The 2024 budget amounted to more than 144 trillion dinars, with a deficit exceeding 63 trillion dinars.
In Iraq, there are approximately 6,000 employees out of roughly 4 million who are classified as “special grades,” and this group receives the lion’s share of salaries. Parliament and previous governments attempted to “streamline spending” and establish a “salary scale,” but these efforts failed due to resistance from those holding “high salaries.”
Iraq faces several risks due to its economy’s dependence on “oil,” a commodity that is subject to political and security crises around the world.
The number of job grades for the positions of “Undersecretary” and “Director General” is estimated at more than 500 grades (A) and about 5030 grades (B), a number that exceeds what exists in Britain and America, according to experts.
Employees in Iraq are divided into 10 job grades, in addition to the special grade (A), and they are in positions such as: Undersecretary of a Ministry, Secretary or Advisor in the three presidencies, up to the grade of Ambassador.
The top grade (B) includes the functions of the general manager and senior supervisory tasks, and then the job grades are divided from the tenth sequence down to the first grade.
In addition, there are more than 20 ministers, and more than 300 deputies or undersecretaries, along with the three presidents (of the Republic – Parliament – Ministers), totaling more than 6,000 positions that consume nearly 40% of the state’s total salaries, divided into salaries, allowances, security protections, and travel allowances, according to experts.
Saleh returned to continue his speech, pointing out that “the principle of reform begins from within the state institutions, through reviewing the structure of salaries and privileges, especially in the higher presidencies, as it is a national and social message that confirms the state’s commitment to justice, and consideration of the conditions of the middle and poor classes.”
He explained that “the meeting addressed the existence of clear gaps in public spending and miscalculations in some areas of expenditure, in addition to unjustified support that constitutes a continuous burden on the budget, which requires adopting the principle of reviewing expenditures followed globally, through re-evaluating expenditure items, and deleting or reducing the items that lead to an unjustified expansion in expenditures.”
He explained that the decisions discussed were classified as either measures that could be implemented immediately, or others that required study and gradual implementation, in line with the state’s approach based on gradual reform and avoiding direct economic shocks.
Saleh added that this approach comes as part of early preparations to restructure the 2026 budget, in light of expectations that oil prices will fall to levels that may range between $50 and $60 per barrel, while emphasizing the need to ensure the provision of salaries, wages and pensions as a top priority, without compromising the requirements of development and services.
He stressed that the Iraqi economy has good cash flows, but it needs higher fiscal discipline and more efficient management of resources, to ensure that every dinar is spent in the right way, and to pave the way for a more stable and sustainable economy in the medium and long term.
Accurate financial data
In addition, financial expert Abdul Rahman Al-Sheikhli believes that the recent decisions came in response to accurate financial data aimed at strengthening the state’s financial stability, in light of a relative decline in public revenues compared to rising levels of spending.
He explained that public revenues in the first half of 2025 amounted to about 62 trillion Iraqi dinars, a decrease of nearly 6% compared to the same period of the previous year, with oil revenues declining by 3.4% and non-oil revenues by 14%, which necessitated a review of financial policies in line with these changes.
Al-Sheikhly explained that the Iraqi economy still relies heavily on oil as a primary source of revenue, with oil revenues reaching approximately 56.7 trillion dinars, equivalent to 91% of total revenues, compared to only about 6.2 trillion dinars from non-oil revenues during the first half of the year.
He stressed that these indicators highlight the importance of diversifying income sources and enhancing the flexibility of the general budget in the face of fluctuations in global oil prices.
The financial expert pointed out that the measures taken reflect a reformist approach to address a number of challenges, including high current spending, particularly salaries and wages which account for a large share of public expenditures, in addition to limited investment spending.
He pointed out that rebalancing operational and investment spending is an important step towards supporting sustainable economic growth and enhancing resource management efficiency.
Al-Sheikhli explained that these measures have potential positive effects, most notably improving public finance management and reducing the budget deficit by rationalizing unnecessary operational expenses and directing support to those who actually deserve it, especially with the development of the ration card system and support for the most needy groups.
He also stressed that strengthening electricity collection and expanding reliance on electronic payment systems will contribute to increasing local revenues and raising collection efficiency.
Sheikhly stressed the importance of implementing these steps wisely and with balance, ensuring the maintenance of public services and the continuation of investment projects, while simultaneously working to develop non-oil revenues and encourage investment in productive sectors. He emphasized that the success of these measures requires effective oversight and close cooperation among various state institutions to achieve the desired objectives without imposing additional burdens on citizens.
Al-Sheikhli concluded his remarks by emphasizing that proceeding with these financial reforms has become an urgent necessity to strengthen the resilience of public finances and reduce the deficit gap, noting that these measures represent a real opportunity to lay more stable and sustainable foundations for the general budget, and reduce its vulnerability to fluctuations in oil prices and changes in production and exports.
No previous government has dared to amend the salaries of the three presidencies, not due to a lack of conviction in the necessity of doing so, but rather because of the political complexities and high sensitivity surrounding this issue. Such attempts were typically met with unspoken resistance and behind-the-scenes political pressure exerted by influential forces.
Any move in this direction would be fraught with political risks and could open the door to conflict between influential blocs and parties.
This issue was also viewed as a “red line” that was difficult to approach, for fear of it being exploited politically or interpreted as targeting a particular site or institution. This prompted successive governments to avoid getting involved in it, and to be content with talking about reform without translating that into practical decisions.
However, raising this issue today reflects a shift in the reform discourse, an attempt to break the deadlock in files that have remained unresolved for many years, and to convey the message that financial reform must begin from the top before the base, in a way that enhances public confidence and affirms the principle of fairness in the distribution of burdens, especially in light of the current economic challenges.
MNT GOAT: NOW IN CRISIS MODE: Are the Smaller Denominations Finally Coming?
NOW IN CRISIS MODE: What Is the CBI Waiting For?
A critical question must now be asked:
What exactly is the Central Bank of Iraq (CBI) waiting for?
This is no longer speculation. The evidence has been building steadily for months, and the situation has now escalated into a public cash crisis.
Let’s connect the dots.
Citizens Don’t Trust Banks… But That’s Not the Whole Story
In the November 4th Newsletter, an article titled
“FINANCIAL EXPERT: PEOPLE DO NOT TRUST BANKS AND ARE STORING THEIR MONEY AT HOME”
highlighted a growing problem: massive amounts of cash being stashed inside citizens’ homes.
At the time, mistrust in banks was cited as the primary reason.
But today, we know that explanation is only part of the truth.
The December 1st Currency Mechanism That Never Launched
Fast forward to the
“IRAQ IS SET TO IMPLEMENT A NEW CURRENCY MECHANISM ON DECEMBER 1, 2025.”
That mechanism was not implemented.
Why?
National elections
Security instability
Ongoing issues with Iranian-backed militias
Financial systems not fully aligned
Once this mechanism is activated, there is no turning back.
According to a direct CBI contact, this implementation has now been moved to January 1, 2026 — a logical delay given the magnitude of the change.
The Cash Problem: Officially Acknowledged by the CBI
In the December 2nd Newsletter, another critical article appeared:
“THE CENTRAL BANK WANTS TO SOLVE THE CASH PROBLEM.”
Key admissions by the CBI:
Certain denominations are not accepted by banks
Notes under 10,000 IQD are frequently rejected
250, 500, and 1,000 dinar notes are least traded
Damaged and worn bills are accumulating among citizens
Approximately 15 trillion dinars are withheld in homes
Banks and dealers were instructed to:
Accept all denominations
Accept torn or damaged bills
Stop discounting damaged notes
Yet… the problem persists.
Today’s Reality: This Is Now a Public Crisis
A recent article confirms escalation:
“THE WORN-OUT CURRENCY IS A PROBLEM THAT IS WORSENING WITHOUT SOLUTIONS.”
Citizens are openly complaining.
“No one will take it from me,” said Zainab al-Khafaji, holding a torn 5,000 dinar note.
“I don’t know who gave it to me… everyone refused it.”
This is no longer isolated.
This is systemic failure.
Why This Matters: 80% of Cash Is Out of Circulation
Estimates suggest that nearly 80% of Iraq’s physical currency is sitting:
In homes
In drawers
In bags
Completely outside the banking system
This has consequences:
Banks lack liquidity for loans
Cash flow stalls
Inflation appears artificially low
Commerce slows at street level
In short:
👉 Money exists, but it’s frozen.
Why Citizens Are Hoarding Cash (The Real Reason)
It’s not just mistrust.
It’s because:
Notes are damaged
Merchants refuse them
Banks historically rejected them
Citizens have nowhere to exchange them
So they do the only thing left:
stash it at home.
The Only Viable Solution: What Must Happen Next
The evidence points to urgent, unavoidable action.
The CBI has only a few viable options — and they must happen very soon:
1️⃣ Implement the Project to Delete the Zeros
Introduce modernized, durable notes
Restore confidence in physical currency
2️⃣ Retrieve the Hoarded Cash
Pull damaged three-zero notes back into banks
Absorb trillions sitting idle in homes
3️⃣ Roll Out Smaller Denominations
Enable daily transactions
Support post-revaluation pricing
Fix the change problem at street level
4️⃣ Launch the Digital Dinar
Introduced alongside, not instead of, cash
Gradual transition
Cash remains for years
The Inflation Balancing Act
According to CBI contacts, this process requires extreme precision.
When large three-zero notes are withdrawn:
Monetary mass must be reduced
Target balance: ~1/3 of current supply
Inflation must remain low
This is not improvisation.
This plan is fully designed and awaiting execution.
More Proof from the Streets
Another citizen complaint from the same article:
“I suffer from this problem every day,” said Omar Sami, a vegetable seller.
“Customers get angry when I refuse worn currency… ‘What am I supposed to do with it?’”
This is what currency dysfunction looks like.
Featured Snippet: Why Are Smaller Denominations Critical?
Why does Iraq need smaller denominations now?
Because worn-out large notes are being rejected, cash is hoarded at home, daily commerce is disrupted, and only a currency reform with modern lower denominations can restore circulation and confidence.
Why the CBI Cannot Delay Much Longer
The CBI has stated it will not issue replacement notes under the current system.
That makes one thing clear:
👉 The currency swap-out is no longer optional.
👉 The urgency is real.
👉 This situation cannot persist into 2026 without consequences.
This feels less like preparation…
and more like imminence.
Q&A Section
Is this cash problem real or exaggerated?
It is real, widespread, and now publicly acknowledged.
Are smaller denominations required before an RV?
Yes. Daily commerce cannot function post-RV without them.
Is this tied to the digital dinar?
Yes. Both are designed to roll out together.
Does this mean the RV is close?
It means the mechanics required for an RV are being forced into action.
Final Question for Readers
Having read the current RV Status, the cash crisis, and the CBI’s limited options…
👉 When do you think the RV will happen?
No Rumors. No Hype. No Opinions.
Just the FACTS.
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#IQD #CurrencyReform
#DigitalDinar #RVStatus
#IraqEconomy #MonetaryReform
NOW IN CRISIS MODE: ARE THE SMALLER DENOMINATIONS COMING?
What is the CBI waiting for?
Do you remember the article in my 11/4 Newsletter? It was titled “FINANCIAL EXPERT: PEOPLE DO NOT TRUST BANKS AND ARE STORING THEIR MONEY AT HOME.” We must tie in these articles to other articles from the recent past on this subject matter of stashed of currency in the homes. But is the ‘mistrust’ in the banking system the real cause of these stashes now at this time, or just part of issue? Let’s explore this today.
Then let’s tie this article to the article in my 11/20 Newsletter titled “IRAQ IS SET TO IMPLEMENT A NEW CURRENCY MECHANISM ON DECEMBER 1, 2025” . Do you remember it? Let’s take another look at now that we know much more since. But it did not get implemented on Dec 1st and so why? Could it be the elections and the issue with the Iranian militias? Remember once they implement this new currency mechanism there is no turning back. Everything must be in place for the financial entities to support it. My CBI contact has told me yesterday this date is now moved out until January 1, 2026. We should all understand why.
Here is the article again:
Also in my 12/2 Newsletter remember this article titled “THE CENTRAL BANK WANTS TO SOLVE THE CASH PROBLEM”? Central Bank of Iraq told us some types of currency, even less than 10,000 dinars, are not accepted from some banks, so the currency has accumulated among citizens. To solve this problem in the Central bank issued guidelines to private banks and currency dealers. The Central Bank of Iraq (CBI) has issued new guidelines and these institutions must deal with all types of Iraqi dinars, even worn out or damaged ones. Also the 250, 500 and 1000 Iraqi dinars are the least traded in the market, banks and currency dealers’ markets, and in some places are not accepted, so the small amount of money has accumulated among citizens. Today we also learn another reason why these notes are accumulating in their homes. It is because they are damaged and no one wants take the damaged notes.
The Central Bank of Iraq (CBI) had earlier said it had a shortage of cash, one of the reasons being the deterioration of the balance between the currencies, so they issued new guidelines and must deal with all types of Iraqi dinars. We were told about 15 trillion dinars are withheld by citizens. Economist Haider Sheikh said the central bank wants to solve the cash problem and eliminate the excuse of currency in transactions, so government offices and private banks have instructed to receive all kinds of money, because the money paid for salaries will not be in the market.
Previously, currency dealers and even some private banks accepted bills against the dollar at less than their value, but according to the new guidelines, bills will be accepted at the same value even if they are torn or old.
Okay, let’s keep going on this topic and tie in some more recent articles from the news this period of news.
In the following most recent article in today’s news, it becomes apparent that something is going to happen shortly to fix this issue or there is going to be more serious implications. Yes, it is now a crisis for the public. It is titled “THE WORN-OUT CURRENCY IS A PROBLEM THAT IS WORSENING WITHOUT SOLUTIONS.” We have read many articles about the stashes of cash in citizens homes and how this cash is needed in the banks for loans. This cash is nearly 80% of the currency mass in circulation. This could also be why Iraq is holding steady on inflation being so low, this cash is basically withdrawn from circulation. In this article we hear of complaints about the situation and I quote from it –
“No one will take it from me,” Zainab al-Khafaji (an employee) kept repeating as she wandered among the shops near Sayed al-Halib in the Mansour district, before we asked her: “What is it that no one will take from you?” She replied: “Five thousand dinars torn up and glued back together.” She added: “I don’t know who gave it to me when I was shopping, and I tried to buy something with it again, but everyone refused it.”
Do you see that this is a crisis situation now? Why else would there be so many articles on this subject matter in the few months if not a crisis? Did you read just a few of the complaints?
Okay, so if no one will take these worn-out notes then what do the citizens do with them? They stash them at home and soon they pile up, as they have done. It is obvious that newer modernized polymer notes are in order and will not wear out so much. But is this the direction the CBI is really going in the first place? Is the goal not to go digital? But remember too that the CBI told us that cash is not going completely away for many years after this move to digital. Oh…. but there are solutions! The citizens must feel comfortable in any change and this must be handled carefully. I see a few things that are going to happen in the VERY near future and have to happen VERY SOON:
- Implement the Project to Delete the Zeros and issue the newer modernized notes
- Suck in these damaged notes stashes from the homes back into the banks.
- Implement the digital dinar, said to occur at the same time as the newer lower denomination roll outs.
In doing these monetary operations my CBI contact told me there must be a balance necessary to keep inflation low. In other words, I was told that when they suck in the larger three zero notes, especially the damaged ones, they must balance them out so as to keep the monetary mass as 1/3 of what it is today. This is going to be tricky and will take much planning. This is however all planned out and just waiting for execution of the plan.
Here is yet another complaint from the article and I quote –
“Omar Sami (a vegetable seller) says: “I suffer from this problem every day, whether when taking money from customers or returning the change to them.He added that many shoppers get angry when he refuses to take or return worn currency, and the most common phrase is: “What am I going to do with it?” or “It’s not working, exchange it.”
These worn-out notes are becoming a crisis because the CBI has told us they are not going to issue newer notes and we all know why. This makes the urgency of the currency swap out imperative that it happen VERY SOON. I can even imminent.
________________________________________
Having read my RV Status for this period when do you think the RV will happen?
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