Iraq Dinar Update: “Things Can Change on a Dime”
Mnt Goat’s latest commentary emphasizes urgency: “Things can change on a dime. Wait and watch.”
According to her view, multiple indicators suggest Iraq may be approaching a pivotal financial shift:
Parliament waiting on the federal budget
Anticipated movement on the Oil and Gas Law
Political reshuffling
Clarification on the Central Bank’s authority over exchange rates
Renewed discussion of a potential FOREX return
Let’s unpack each component carefully.
🏛 Parliament, Budget & Oil and Gas Law
Iraq’s legislative agenda remains central to monetary reform discussions.
1️⃣ The Federal Budget
Parliament is reportedly waiting for budget clarity. In Iraq, the annual budget defines:
Oil revenue projections
Spending allocations
Currency assumptions
Fiscal stability metrics
Budget finalization often precedes major economic adjustments.
2️⃣ The Oil and Gas Law
The long-awaited Hydrocarbon Law (HCL), commonly referred to as the Oil and Gas Law, would clarify:
Revenue sharing between Baghdad and regions
Authority over oil exports
Payment mechanisms to provinces
Long-term investor confidence
For years, this legislation has been viewed as foundational for broader economic reform.
🇮🇶 Political Landscape: Fading Iranian Influence?
Mnt Goat suggests that Iranian influence inside Iraq is weakening, with political momentum shifting.
Key figures mentioned:
Nouri al-Maliki – described by critics as politically weakened
Mohammed Shia' Al-Sudani – expected by supporters to solidify leadership
Regional power shifts often influence financial stability. However, monetary decisions ultimately fall under the authority of the central bank, not political factions alone.
🏦 CBI Independence & The “Two Rate” Confusion
One of the most important clarifications in this discussion involves the difference between:
The Program Rate
The FOREX Rate
The governing authority is the Central Bank of Iraq (CBI).
💵 What Is the Program Rate?
The “program rate” refers to the managed exchange rate Iraq currently uses domestically. It operates under a de facto peg structure — historically aligned closely to the U.S. dollar.
Key characteristics:
Controlled by the CBI
Adjusted administratively
Used for internal accounting and official transactions
Can technically be modified upward or downward
This does not automatically mean international tradability.
🌍 What Is the FOREX Rate?
A FOREX rate applies when a currency is:
Fully tradable on global currency markets
Actively exchanged internationally
Priced dynamically through supply and demand
Integrated into global banking systems
Mnt Goat emphasizes that returning to FOREX would require:
Re-pegging (potentially to a basket or new structure)
Removal of sole reliance on a dollar peg
Rollout of lower denominations
Structural reform completion
🍎 Apples and Oranges: Why These Rates Are Not the Same
A critical point:
There cannot be two official exchange rates simultaneously — one for inside Iraq and one for FOREX — under normal monetary practice.
When (and if) the dinar returns to FOREX:
The domestic program rate would transition to the internationally recognized rate
The temporary program structure would cease
One unified official rate would exist
This distinction is often misunderstood in dinar discussions.
💰 Why Lower Denominations Matter
If Iraq were to support a stronger exchange rate environment:
Smaller denomination notes would be necessary for daily transactions
Large “three-zero” notes would likely be phased gradually
Public purchasing power would need recalibration
Currency restructuring must align with practical economic function — not just exchange value.
🔎 Featured Snippets
What is the difference between Iraq’s program rate and FOREX rate?
The program rate is a domestically managed exchange rate set by the Central Bank of Iraq. A FOREX rate applies when the currency is fully tradable on international markets.
Can the Central Bank of Iraq change the rate anytime?
The CBI can adjust the domestic program rate. However, restoring full FOREX participation involves broader structural and international considerations.
Can Iraq have two official exchange rates?
No. A currency typically operates under one official exchange rate. When internationally tradable, the domestic rate aligns with the global rate.
📊 Signs Often Watched by Analysts
Observers monitoring a potential shift typically watch for:
Budget completion
Oil and Gas Law movement
Political stabilization
Banking compliance reforms
Lower denomination announcements
Official CBI policy statements
Until confirmed by official channels, all expectations remain speculative.
❓ Q&A Section
Q: Is Iraq officially returning to FOREX?
No official announcement has been made confirming a FOREX return.
Q: Does adjusting the program rate equal a revaluation?
Not necessarily. A domestic rate adjustment is different from restoring full international tradability.
Q: Why is the Oil and Gas Law important?
It provides long-term revenue clarity and investor confidence — key elements in economic reform.
Q: Is political change required before monetary reform?
Political stability helps, but currency policy decisions are made by the Central Bank of Iraq.
📌 Key Takeaways
Budget and Oil & Gas Law remain central
Political shifts may influence reform momentum
The program rate and FOREX rate are fundamentally different
Only one official rate can exist at a time
No confirmed date for FOREX return has been announced
As Mnt Goat says: “Wait and watch.”
Major financial transitions often appear sudden — but they are usually built on years of structural groundwork.
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Mnt Goat
I assure you things can change on a dime. Wait and watch! There are already too many signs we are very near. Parliament is waiting for the budget and will soon address the Oil and Gas Law.
..Iranian influence over Iraq is fading as many are now believing (as we already do) that Maliki is a ‘sinking ship’...it is just a matter of time before al-Sudani is sworn in to form his cabinet as the next prime minister.
...my CBI contact...said we would hear all kinds of comments about the independence of the CBI and how they can adjust the rate anytime they want. Yes this may be true but...Some don’t even realize there are two types of rates, one is the program rate and the other the FOREX rate...the ‘program’ rate tied to the de facto peg can be changed upwards or downwards by the CBI any time. This does not mean allowing the dinar back on FOREX..
When the dinar goes back to FOREX it will be re-pegged and off the sole peg to the dollar and the program rate will go away. The newer lower denominations would have to first be rolled out. We are talking apples and oranges when we talk about these two rate types...The dinar can only have one ‘official’ rate. There is no such thing as an in-country rate and then a FOREX rate at the same time...When the dinar does go back to FOREX, the in-country rate (program rate) will change to the FOREX rate.