A new statement from Iraqi MP Majid Al-Shankali has ignited controversy across Iraq’s financial and political landscape.
According to the MP, Iraq’s government has “no real options” to address its growing financial pressures other than:
Raising the dollar exchange rate
ORReducing government salaries
He further claimed that influential leaders have agreed to adjust the exchange rate to a range between 160–180 dinars per dollar.
Let’s break this down carefully — because the implications are massive.
What Exactly Did MP Majid Al-Shankali Say?
In a televised interview followed by Al-Sa’a Network, Majid Al-Shankali stated:
Iraq has approximately 7 million salary recipients (employees, retirees, welfare recipients, Martyrs Foundation beneficiaries).
With families included, this affects over 40% of Iraq’s population.
Monthly salary obligations total around 8 trillion dinars.
Annual salary-related obligations exceed 100 trillion dinars.
Oil revenues (estimated at $70 billion annually) are insufficient to cover all state expenses.
The “real” dollar value should range between 160–170 dinars, possibly reaching 180 dinars per dollar.
There is reportedly an agreement among important leaders to keep the rate within that range.
He criticized the earlier decision to restore the exchange rate to 1,300 dinars and claimed Iraq lost between 30–40 trillion dinars during the government of Mohammed Shia' Al Sudani.
Current Official Exchange Rate
The official exchange rate is set by the Central Bank of Iraq.
In recent years:
The rate was adjusted to 1,450 IQD per USD.
Later restored to 1,300 IQD per USD.
The CBI has repeatedly emphasized:
Monetary stability
Inflation control
Reducing dollarization
Strengthening the dinar internally
A move toward 160–180 dinars per dollar would represent an extreme and unprecedented shift from current policy — and would fundamentally contradict CBI stabilization efforts.
Why This Proposal Is So Controversial
If interpreted literally, raising the rate to 160–180 dinars per dollar would mean one of two things:
A massive redenomination scenario (very unlikely without major reforms)
Severe misstatement or political positioning
Such a drastic change would:
Increase domestic inflation pressure
Expand black market activity
Undermine confidence in the dinar
Strengthen dollar dominance
Benefit currency exchangers holding USD
This runs counter to the CBI’s recent efforts to reduce reliance on the dollar.
The Political Dimension
The debate cannot be separated from Iraq’s internal political factions.
Some analysts argue that certain groups within the Iranian-backed Coordination Framework prefer policies that weaken monetary reform progress.
However, monetary authority in Iraq lies primarily with the Central Bank of Iraq, not individual MPs.
Prime Minister Mohammed Shia' Al Sudani has previously stated that exchange rate decisions are the responsibility of the CBI.
Iraq’s Financial Reality
Here are the numbers presented:
$70 billion estimated annual oil revenue
Equivalent to approximately 91 trillion dinars
Government obligations exceed 100 trillion dinars annually
Monthly payroll around 8 trillion dinars
If accurate, Iraq faces:
Budget deficits
Heavy public-sector burden
Limited diversification of non-oil revenue
But historically, currency devaluation alone does not solve structural fiscal problems.
Q&A Section
❓ Did Iraq officially raise the dollar exchange rate to 180 dinars?
No. There has been no official announcement from the Central Bank of Iraq confirming such a change.
❓ Who controls Iraq’s exchange rate policy?
The Central Bank of Iraq is responsible for setting and managing Iraq’s official exchange rate.
❓ Why would raising the dollar rate be considered?
Supporters argue it could:
Increase dinar liquidity
Cover salary obligations
Address budget deficits
Critics argue it would:
Trigger inflation
Hurt citizens’ purchasing power
Strengthen dollar dependency
❓ Is this a sign of an impending devaluation?
Not necessarily. Political discussions do not equal official monetary action.
Featured Snippet Summary
Iraqi MP Majid Al-Shankali claims leaders agreed to raise the dollar exchange rate to 160–180 dinars.
Iraq faces over 100 trillion dinars in annual salary and obligation expenses.
Oil revenues alone may not cover total spending.
No confirmation has been issued by the Central Bank of Iraq.
The proposal contradicts recent monetary stabilization efforts.
Key Takeaways for Dinar Holders
This is a political statement, not a Central Bank decision.
Exchange rate authority rests with the CBI.
Sudden extreme devaluations are highly destabilizing.
Iraq’s financial challenge is structural — not purely exchange rate driven.
Investors should monitor official releases from:
The Central Bank of Iraq
Iraq’s Ministry of Finance
Parliamentary economic committees
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Final Analysis
The suggestion to move toward 160–180 dinars per dollar is one of the most controversial exchange rate discussions in recent memory.
But until the Central Bank of Iraq issues formal policy changes, this remains political rhetoric — not monetary action.
In Iraq, exchange rate stability is not just economic policy — it’s national stability.
Stay alert. Stay analytical. Stay grounded.
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