🇮🇶 IRAQ SITUATIONAL REPORT
TUESDAY, NOVEMBER 3, 2026 | Political, Economic, Financial & Security Update
1. EXECUTIVE SUMMARY
Iraq is going through an important period of political, financial, and security restructuring. The country is attempting to stabilize its economy following the official exchange-rate adjustment, restore oil exports, and consolidate a government facing greater security responsibilities after the withdrawal of U.S. forces.
The five major developments as of November 3:
Government: Prime Minister Ali al-Zaidi's cabinet is complete, but faces political challenges and tensions with Washington.
Currency: The new official exchange-rate structure remains around 1,500–1,520 IQD per USD, depending on the transaction.
Oil: Iraq is working to restore exports and use alternative routes to transport crude oil.
Security: The U.S. withdrawal increases responsibility for Iraqi security forces and pressure on the government to control militias.
Reforms: Parliamentary progress on legislation regulating the Popular Mobilization Forces (PMF) remains pending.
2. POLITICAL SITUATION AND GOVERNMENT
The Iraqi Parliament completed the remaining ministerial appointments during October, consolidating the government of Prime Minister Ali al-Zaidi.
Key developments include:
Several ministerial and deputy prime minister positions have been filled.
The government has pledged to combat corruption.
Al-Zaidi has emphasized strengthening national sovereignty.
The U.S. military withdrawal and control of militias remain central issues.
However, a diplomatic complication has emerged: the appointment of Laith al-Khazali as deputy prime minister has raised concerns in Washington because of his background and U.S. sanctions.
This places the government in a difficult position: maintaining relations with the United States without disrupting its political and economic relationship with Iran.
3. MONETARY SITUATION: IRAQI DINAR AND CENTRAL BANK
This is one of the most important areas for those following Iraq's monetary reform and the possibility of a future dinar revaluation.
The exchange-rate adjustment announced in October established the following structure:
Transaction | Exchange rate |
|---|---|
Ministry of Finance purchases USD | 1,500 IQD |
Sales to banks | 1,510 IQD |
Sales to the public | 1,520 IQD |
This represents an official devaluation compared with the previous structure of approximately 1,300–1,320 dinars per dollar.
What is happening now?
The parallel market continues to trade above the official rate.
The gap between the official and parallel markets remains a problem.
The government is seeking to control speculation and illegal currency transactions.
Authorities have clarified that exchange-rate policy falls under the responsibility of financial institutions, particularly the Central Bank of Iraq (CBI).
An important distinction: devaluation is not revaluation. It is a move in the opposite direction, and its consequences are still unfolding.
CBI International Reserves
A particularly important report published on November 2 by Shafaq News states that the Central Bank's official reserves reached approximately:
113.991 trillion IQD
US$75 billion
Reported reserves as of October 15, 2026
Foreign investments: 77.925 trillion IQD.
Gold and Special Drawing Rights: 35.324 trillion IQD.
Cash held in vaults: 742 billion IQD.
My interpretation: Iraq maintains a significant reserve position, but the increase must be interpreted correctly. Part of the increase expressed in dinars results from the devaluation. Dollar-denominated reserves did not necessarily increase by the same proportion.
This is positive for the country's financial backing, but it does not, by itself, demonstrate that the CBI is preparing a revaluation.
4. OIL AND EXPORTS
One of the most important November 3 reports comes from Shafaq News.
Iraq increases oil exports through Turkey by approximately 43%.
Previous volume: 350,000 barrels per day.
Newly reported volume: 500,000 barrels per day.
Increase: 150,000 barrels per day.
The operation includes approximately 200,000 barrels per day of oil from Basra, transported by tanker trucks toward the northern pipeline system.
The remaining volume comes from Kirkuk and the Kurdistan Region of Iraq.
Why does this matter?
Iraq is attempting to reduce its dependence on exports passing through the Strait of Hormuz.
Total Iraqi oil exports in October were also reported at approximately 3.35 million barrels per day, approaching pre-crisis levels.
This is fundamental because oil provides most of the Iraqi government's revenue.
5. SECURITY AND U.S. MILITARY PRESENCE
The withdrawal of U.S. forces from their remaining bases in Iraq was completed on September 30, according to the agreed withdrawal timetable.
This marks the end of more than two decades of U.S. military presence in the country.
However, concerns remain:
Possible expansion of Iranian influence.
Greater responsibility for Iraqi security forces.
Risk that dormant ISIS cells could exploit security gaps.
Need to strengthen intelligence and surveillance capabilities.
Reuters has reported that Iraq could face difficulties replacing some of the intelligence, logistics, and surveillance capabilities previously provided by the United States.
The PMF Militia Law
Another pending issue is legislation concerning the Popular Mobilization Forces.
The proposed legislation, approved by the Council of Ministers on September 29, remains pending in Parliament. As of November 3, a first reading or voting date could not be independently confirmed.
This matter is important because it is directly connected to state authority, military organization, and the influence of armed groups backed by Iran.
6. CORRUPTION AND INSTITUTIONAL REFORM
Another relevant development is that Iraqi courts have handed down prison sentences to two politicians and a former oil-sector official in corruption-related cases involving public contracts.
Reported sentences include:
Muthanna al-Samarrai: six years.
Ziad al-Janabi: five years.
Hussein Talib, a former petroleum products distribution official: eight years.
The cases include obligations to return substantial amounts of money to the state.
This aligns with Prime Minister Al-Zaidi's pledge to combat corruption and improve public administration.
7. 2027 FEDERAL BUDGET
The 2027 budget is another development worth monitoring.
Estimates published during October point to:
Category | Estimate |
|---|---|
Government expenditures | 217 trillion IQD |
Oil revenues | 140 trillion IQD |
Estimated deficit | 45 trillion IQD |
These figures represent estimates concerning the proposed budget, not a finalized and approved budget.
The new exchange rate of 1,500 dinars per dollar is an important element of fiscal planning. Its incorporation into the budget would help consolidate the new monetary structure, but it does not mean there is a commitment to change the dinar's value again.
8. INTERNATIONAL SITUATION: UNITED STATES AND IRAN
The regional conflict remains one of the greatest risks facing Iraq.
The November 3 international news includes renewed increases in oil prices following reports of new U.S. attacks on Iran's Qeshm Island and difficulties reaching an agreement between Washington and Tehran.
International oil prices — November 3
Brent
$106.13
WTI
$97.91
Prices reported by Reuters at 10:43 GMT.
For Iraq, this has two consequences:
Higher oil prices can increase government revenue per exported barrel.
Regional instability can disrupt exports, increase logistical costs, and affect economic stability.
Iraq needs to maintain a balanced position between the United States, Iran, and its Gulf neighbors.
9. WHAT DOES ALL THIS MEAN FOR THE FUTURE OF THE IRAQI DINAR?
This is my assessment of the monetary situation as of November 3.
Monetary Reform Assessment
International Reserves
Oil Recovery
Exchange-Rate Stability
Institutional Reform
Dinar Revaluation
Five Indicators to Watch
CBI: New statements regarding monetary policy, reserves, exchange-rate stability, and banking modernization.
Parallel Market: A sustained reduction in the gap between the official and parallel dollar rates.
2027 Budget: Approval and confirmation of the exchange rate used in fiscal planning.
Banking Reforms: Digitalization, international compliance, transfers, and strengthening of the financial system.
Delete the Zeros: Any official CBI document confirming concrete progress on this project.
10. OVERALL CONCLUSION
Iraq: A Period of Economic and Monetary Transition
As of November 3, 2026, Iraq is showing important progress in three areas: recovery of oil exports, strengthening of international reserves, and consolidation of its new government.
However, three major challenges remain:
Stabilizing the foreign exchange market.
Resolving security tensions and militia influence.
Securing sufficient oil revenues to finance the national budget.
My conclusion for those waiting for Iraqi monetary reform:
Iraq is building economic and institutional conditions that could support a future monetary reform. The recovery of exports, international reserves, and banking modernization are all relevant developments.
However, we cannot yet conclude that the country is in the final phase of a revaluation. First, we need to see exchange-rate stability, fiscal discipline, verifiable progress by the CBI, and official decisions concerning the removal of zeros.
The direction of the reforms deserves close attention, but structural progress should not be confused with an RV announcement.
Main Sources Consulted
Note: This report distinguishes between news published on November 3 and recent developments that remain relevant. Market figures and estimates do not necessarily represent official government decisions.
🔗📢 FOLLOW & JOIN OUR COMMUNITY
📌 TELEGRAM: https://t.me/DINAREVALUATION
📌 X (TWITTER): https://x.com/DinarWatchTeam
📌 BLUESKY: https://bsky.app/profile/dinaresgurus.bsky.social
