Iraq 2035: How Iraq Is Already Entering the First Phases of Strengthening the Iraqi Dinar
For years, many people have asked the same question:
Is Iraq truly preparing to strengthen the Iraqi dinar (IQD)?
Today, the evidence suggests that Iraq is no longer just talking about reform — the country is actively implementing the first phases of a long-term national transformation designed to strengthen its economy, modernize its financial system, reduce dependence on the U.S. dollar, and ultimately support a stronger and more stable Iraqi dinar.
The key to understanding this process is Iraq’s long-term strategic vision known as “Iraq 2035”.
This is not simply an economic plan.
It is a complete restructuring of how Iraq wants to operate financially, commercially, industrially, and monetarily over the next decade.
And importantly — many of the first phases are already happening right now.
The First Phases of IQD Strengthening Are Already Visible
One of the biggest misconceptions in the IQD community is that currency strengthening only means an overnight revaluation.
But historically, nations strengthen currencies in stages.
Before a currency gains long-term value and international confidence, the country must first build:
- economic stability,
- banking credibility,
- reserves,
- investment confidence,
- productive industries,
- and reduced dependency on foreign currencies.
That is exactly what Iraq is doing today.
Iraq Is Actively Reducing Dependence on the U.S. Dollar
One of the clearest signs of the early strengthening phase of the IQD is Iraq’s ongoing effort to reduce internal dollarization.
For years, Iraq heavily relied on physical U.S. dollars for:
- trade,
- savings,
- real estate,
- commercial transactions,
- and even everyday business operations.
But Iraq now understands that a sovereign economy cannot fully depend on another nation’s currency.
That is why the Central Bank of Iraq has already implemented major measures including:
- restricting unauthorized dollar transactions,
- tightening controls on the parallel dollar market,
- increasing electronic payment systems,
- expanding digital banking,
- encouraging domestic IQD usage,
- modernizing SWIFT banking systems,
- improving anti-money laundering compliance,
- and pushing businesses toward dinar-based transactions.
These are not random policies.
These are foundational monetary reform measures.
And they represent the first structural stages of strengthening confidence in the Iraqi dinar.
Iraq 2035 Is Designed to Build a Stronger National Currency
The Iraq 2035 vision aims to transform Iraq from an oil-dependent economy into a diversified economic power.
Why is this important for the IQD?
Because currencies become stronger when they are supported by:
- productive economies,
- diversified revenues,
- industrial output,
- investment flows,
- and strong financial systems.
Right now, Iraq still depends on oil for nearly 90% of government revenues.
That creates vulnerability.
If oil prices fall:
- government revenues collapse,
- deficits rise,
- pressure increases on foreign reserves,
- and the national currency becomes weaker.
Iraq 2035 is specifically designed to solve this problem.
Iraq Plans to Diversify Beyond Oil
Under Iraq 2035, the government plans to massively expand non-oil sectors including:
Infrastructure
- highways,
- railways,
- logistics corridors,
- ports,
- fiber optics,
- and transportation systems.
Industry
- petrochemicals,
- fertilizers,
- manufacturing,
- building materials,
- processing industries,
- and industrial zones.
Agriculture
- food production,
- irrigation modernization,
- agricultural technology,
- and food security projects.
Energy
- solar energy,
- gas capture,
- electricity modernization,
- and energy independence.
Private Sector Expansion
- foreign investment,
- private enterprise,
- entrepreneurship,
- banking expansion,
- and financial markets.
The more Iraq produces internally, the stronger its economic foundation becomes.
And stronger economies usually support stronger currencies.
The Development Road Project Could Transform Iraq Financially
One of the most important parts of Iraq 2035 is the Development Road Project and the expansion of the Grand Port of Al-Faw.
This project aims to turn Iraq into a global commercial corridor connecting:
- Asia,
- Europe,
- Turkey,
- the Gulf,
- and the Mediterranean.
If successful, Iraq could generate billions in:
- transit fees,
- logistics services,
- trade revenues,
- transportation income,
- and regional commerce.
This matters tremendously for the IQD because it creates:
- non-oil revenue,
- foreign investment,
- economic activity,
- and long-term financial stability.
Iraq Is Also Modernizing Its Banking System
A weak banking system weakens a currency.
Iraq knows this.
That is why the country is aggressively modernizing:
- banking infrastructure,
- electronic payment systems,
- digital finance,
- international banking compliance,
- and monetary controls.
The government is also attempting to reduce the cash economy and improve financial transparency.
This is extremely important because:
- modern financial systems increase confidence,
- attract international capital,
- reduce corruption,
- and strengthen monetary control.
All of these factors help support a stronger national currency over time.
Iraq Wants the Economy to Support the State — Not the Other Way Around
Prime Minister Ali Faleh al-Zaidi recently made a very important statement:
“We want the economy to run the state.”
This reflects a major philosophical shift inside Iraq.
For decades:
- the government controlled almost everything,
- public salaries dominated the economy,
- and oil revenues funded nearly all state activity.
But Iraq 2035 aims to create a productive private-sector economy capable of generating:
- jobs,
- investment,
- exports,
- tax revenues,
- and long-term sustainable growth.
Countries with strong private sectors generally develop stronger and more stable currencies.
Why Many Believe We Are Watching the Early Stages of IQD Strengthening
When people look only for an overnight exchange-rate event, they often miss the broader transformation already underway.
The truth is:
many of the early phases of strengthening the Iraqi dinar are already happening.
We are already seeing:
- de-dollarization efforts,
- banking modernization,
- digital payments,
- tighter monetary controls,
- economic diversification,
- infrastructure expansion,
- foreign investment initiatives,
- anti-corruption financial reforms,
- industrial development,
- and long-term strategic planning.
These are not short-term actions.
These are foundational nation-building reforms.
And they are exactly the types of policies countries implement before achieving stronger monetary stability and greater international financial credibility.
Final Thoughts
Iraq 2035 is ultimately about building a new Iraqi economy.
A stronger dinar cannot exist without:
- a stronger banking system,
- diversified revenues,
- productive industries,
- foreign investment,
- monetary discipline,
- and economic confidence.
That is why many analysts believe Iraq is already in the first operational stages of a long-term IQD strengthening process.
The transformation is not happening overnight.
But step by step, Iraq appears to be laying the financial, economic, and monetary foundation for a more powerful and globally respected Iraqi dinar in the years ahead.
Follow the reforms closely — because the foundation phase may already be underway.
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PM Al-Zaidi: Iraq Must Diversify Economy and Ensure Timely Salary Payouts
The Iraqi Prime Minister Ali Faleh al-Zaidi emphasized that the country "cannot continue to rely on oil alone" and stated that employee salaries must be disbursed punctually to prevent unnecessary public concern.
Al-Zaidi presided over a high-level meeting with Ministry of Finance officials on Saturday to evaluate the progress of ministerial, executive, service, and economic programs.
The Prime Minister’s Media Office stated that al-Zaidi underscored Iraq's critical 90% dependence on volatile oil revenues, emphasizing the urgent need to expand the non-oil economy and maintain absolute transparency with citizens regarding financial challenges.
He reviewed performance reports and highlighted that international developments have placed Iraq in a highly sensitive economic and financial position.
Economic Diversification and Strategic Use of Iraq’s Geopolitical Position
During the meeting, al-Zaidi indicated that the Ministry of Finance is tasked with outlining Iraq's fiscal policy as the government actively develops the Iraq 2035 strategic plan.
“The ministry must have a clear vision, and the budget should be a map for the future,” he added.
Al-Zaidi said that the country "cannot continue to rely on oil alone," adding that the budget must maximize revenue generation.
Regional conflict and the closure of the Strait of Hormuz have reduced Iraq’s oil production to 1.4 million barrels per day, forcing a shift toward domestic refining and northern export alternatives.
He underlined that Iraq serves as a global crossroads and stated the need to leverage its strategic geographic position to strengthen national resilience.
Shift Towards Private Sector Empowerment
The Prime Minister further said that to drive economic growth, the state is shifting away from traditional financial concepts that prioritize routine operational spending over actual national development.
Instead, he added, the government aims to adopt a regulatory and oversight role that actively empowers the private sector to spearhead long-term economic progress.
“There is a concept that the state runs the economy, but we want the economy to run the state. If the concepts are changed, we will not have to change people,” he remarked.
Timely Salary Payments and Calls for Federal-KRG Cooperation
Regarding the financial entitlements of public sector employees, al-Zaidi said that “employees' salaries should be released on time so there is no message of concern to the people, including the salaries of the Social Security Network.”
This statement comes as the salary issue remains one of the most critical points of contention in Erbil-Baghdad relations.
During their meeting in Baghdad today, Kurdistan Region Prime Minister Masrour Barzani and al-Zaidi stressed the need for a definitive, constitutionally based solution that fully respects the Kurdistan Region’s federal status.
Both parties “agreed on the importance of strengthening cooperation and coordination between the federal government and the KRG to resolve differences and overcome challenges.”
https://channel8.com/english/news/58551