CBI Official Statements on Currency Stability
Key points from recent announcements:
The dollar exchange rate at the Central Bank is fixed and will not change.
Fluctuations in the parallel market are caused by some traders seeking dollars outside official channels.
The CBI continues to inject dollars into the system to meet legitimate demand.
There is no official currency market outside the Central Bank; all other transactions are considered black market or unofficial.
Al-Alaq emphasized:
“The price set by the Central Bank for the US dollar is fixed and does not change, but the developments in import mechanisms have prompted some traders to turn to the black market to buy dollars. These traders will soon return to official channels.”
Why the Parallel Market Spikes Occur
MNT GOAT explains that temporary fluctuations are orchestrated “hiccups” rather than signs of systemic instability:
The CBI controls the exchange rate with a 2% allowable fluctuation around the official rate (e.g., 1320 ± 26 dinars).
Parallel market spikes are short-lived and often triggered by transitional CBI policies, not external shocks.
Policies are rolled out gradually to prevent sudden crashes or destabilization.
From Dollar to Dinar: Recent CBI Policy Shift
The CBI is slowly reducing reliance on the dollar, particularly in payments to contractors in the oil sector:
Payments to oil company contractors are being converted from USD to dinar.
This major policy change will have long-term ripple effects on the economy.
Short-term “hiccups” in the parallel market are expected and managed.
MNT GOAT reassures readers that ample reserves and gold backing exist to prevent crashes or devaluation during these transitions.
Iranian Influence & Devaluation Rumors
Some reports suggest Iran-backed political actors in Iraq are promoting devaluation to exploit financial loopholes.
MNT GOAT warns:
Attempts to push for a large devaluation are illogical and contrary to the CBI’s monetary policy.
Massive shifts in the currency rate could harm Iraq’s economic recovery rather than solve liquidity issues.
Knee-jerk reactions to minor market hiccups only fuel instability, benefiting black-market traders.
Q&A Section
❓ Is the Iraqi dinar being devalued?
No. The Central Bank of Iraq has confirmed that the official exchange rate remains fixed and stable.
❓ Why does the parallel market fluctuate?
Parallel market spikes are caused by traders bypassing official channels and are short-term, unofficial phenomena.
❓ Does the CBI have enough reserves?
Yes. The CBI has sufficient gold and foreign currency reserves to support the dinar and prevent market crashes.
❓ How is the CBI reducing reliance on the dollar?
Recent policies convert payments to contractors in the oil sector from USD to Iraqi dinars, gradually transitioning the economy while preventing destabilization.
Featured Snippet Summary (Google Discover Ready)
CBI Governor Ali Al-Alaq confirms no dinar devaluation.
Dollar exchange rate is fixed and stable.
Parallel market fluctuations are temporary and due to trader activity.
The CBI has ample reserves and gold backing the dinar.
Gradual policies transition Iraq from USD to dinar payments to strengthen the domestic currency.
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MNT GOAT
What does the CBI have to say about all this talk of a massive devaluation of the Iraqi dinar?
As this last article about the massive devaluation just was published, this next article came out quickly from the CBI and is titled “IMPORTANT CLARIFICATION FROM THE CENTRAL BANK OF IRAQ REGARDING THE DOLLAR”. The Governor of the Central Bank of Iraq, Ali Al-Alaq, confirmed on Tuesday that the exchange rate of the dollar is stable and will not change, noting that the Central Bank does not suffer from any problem with gold and foreign currency reserves, and that they are continuing to inject dollars .
Then another article to back up this first one titled “CENTRAL BANK GOVERNOR: THE DOLLAR EXCHANGE RATE IS FIXED AND WILL NOT CHANGE”. The Governor of the Central Bank of Iraq, Ali Al-Alaq, attributed the fluctuation of the “parallel market” and the rise in the dollar exchange rate to the dealings of some traders, stressing that the dollar exchange rate at the Central Bank is fixed and will not change.
Al-Alaq said regarding the fluctuation against the dinar: “The price set by the Central Bank for the US dollar is fixed and does not change, but the developments that have occurred in the import mechanisms have prompted some traders to turn to the black market to buy dollars.” Al-Alaq added: “These traders will soon return to the official channels to obtain currency, and thus the price will return to its normal level, especially since the Central Bank does not suffer from any problem with gold and foreign currency reserves, and continues to inject dollars, so we have not faced any obstacles in this regard.”
Then al-Alaq, the governor of the CBI said, “We do not have an official currency market (outside the Central Bank), there is only a black market, while the only source of dollars is the Central Bank. As for the dollars circulating in the markets, they are the surplus that is traded among citizens, because the Central Bank does not provide dollars for unofficial or illegal transactions”
I wanted to clarify this news of the suggested devaluation by the Iranian influencers in Iraq to show you just what measures they will go through to destroy Iraq. They will look at every hiccup to use as their excuse to burn-down the economy. This is the fight, the uphill battle to save the Iraqi economy. You cannot make such huge shifts in the currency rate when these hiccups occur, as these politicians suggest. It is not logical and will do more harm than good in the overall monetary policy.
These hiccups are predictable as the CBI is constantly, but slowly, moving away from the dollar to the dinar. Remember too what new policy the CBI just announced. (See my 02/10 Newsletter). In it I showed you the news titled “FROM DOLLAR TO DINAR… EXCHANGE RATE POLICY CONFUSES OIL COMPANIES AND THREATENS THEIR EMPLOYEES!” and how the Central Bank of Iraq’s decision to convert payments to contractors working with oil companies from US dollars to Iraqi dinars. Yes, this was a HUGE move and is going to have rippling effects but knee-jerk reactions are not necessary and things will settle down in time. WOW! WOW! WOW!
I need all my readers to realize that the CBI still is not fully in control of the exchange rate and as the parallel market does still exists, it has its own rate to circumvent the ‘official’ CBI rate. The CBI must control it within a 2% more or less fluctuation of the ‘official’ rate. It is needed and we have heard this from the IMF in many of the consultation sessions with Iraq. So 2% of 1320 is 26 thus 1294-1346 range.
The parallel market would have to operate ‘unofficially’ and illegally from 1294- 1346 range which is does in between orchestrated hiccups. The higher temporary spikes are caused by CBI policy and don’t just happen, get it?
These policies are being rolled out slowly as not to cause a sudden crash. Note that the CBI rolls out yet another policy to curb the parallel market even more then a short-lived spike. Then the CBI lets it settle down before the next stage. Since the CBI has told us the have plenty of reserves and even gold to back up the dinar there is no worry of a crash during these hiccups.