Showing posts with label #Iraq #IraqiDinar #CBI #BankingReform #ForexNews #MiddleEastEconomy #DinarRevaluation #FinancialReform #GlobalMarkets #CurrencyUpdate. Show all posts

Sunday, February 15, 2026

Three months after Iraq’s parliamentary elections, the country remains unable to elect a president. This constitutional step is the gateway to appointing a new prime minister and forming a fully empowered government. The situation started with a dispute among political blocs and has evolved into a broader test of Iraq’s post-2003 power-sharing system, exposing institutional weaknesses and renewed regional pressures.

Under Iraq’s constitution, parliament must elect a president by a two-thirds quorum. Only after that vote can the president task the largest parliamentary bloc, currently the Shiite Coordination Framework, with forming a government. In practice, the quorum requirement has repeatedly enabled political factions to block sessions by withholding attendance —a tactic that now defines the current impasse.

The International Crisis Group has described Iraq’s post-2003 political order as an ethno-sectarian power-sharing system in which elite bargaining often overrides institutional functionality. The current deadlock appears to reflect precisely that dynamic.

Raad al-Dahlaki, a member of the Al-Azm Alliance, led by Muthanna Al-Samarrai told Shafaq News that the failure to hold a presidential election session is not tied to agreement or disagreement between Kurdish parties, but rather to political conflicts among the blocs that are obstructing the session. He added that disputes within the Coordination Framework and with other blocs over the prime ministerial nominee have effectively “led to political blockage and a breach of the constitution.”

Although tensions between the Kurdistan Democratic Party and the Patriotic Union of Kurdistan have drawn attention, many observers point to divisions within the Shiite-led Framework as the primary obstacle.

The group, which holds a parliamentary majority of about 185 seats, remains internally divided over the nomination of former Prime Minister Nouri al-Maliki. While some factions support his candidacy including his State of Law Coalition and Badr Organization led by Hadi Al-Ameri and the Reconstruction and Development headed by Mohammad Shia Al-Sudani, others such as Qais al-Khazali and Ammar al-Hakim fear it could deepen domestic polarization and provoke external backlash.

Political analyst Muhannad al-Rawi told Shafaq News that early elections would not resolve this crisis. “Even if new elections were held, the l Framework —numerically dominant yet internally divided— would remain as it is. The faces and blocs would not fundamentally change,” he said. “The problem is not in the ballot boxes, but in the mentality governing the political process, one driven by partisan interests and competition over high-revenue ministries.”

The crisis has also reignited debate over parliamentary discipline. Former lawmaker Rahim al-Darraji warned that absenteeism has become a chronic problem, describing the lack of attendance controls as “one of the biggest flaws in the Council of Representatives.”

Both sessions to elect a president on January 27 and February 1 failed due to a lack of quorum and disagreements.

Political science professor Mohammed Daham echoed that concern, arguing that even legitimate absences effectively obstruct constitutional procedures, and “the failure to attend sessions constitutes a breach of national responsibility.”

Ahmad Ali, another member of parliament, urged the legislature’s leadership to resolve the presidential file and resume committees formation, noting that “the parliament is completely stalled, and the responsibility lies with the presidency of the Council.”

The normalization of such delays raises deeper questions about the durability of Iraq’s institutional framework. The two-thirds quorum rule, intended to ensure broad consensus, has instead become a leverage tool in zero-sum bargaining.

The domestic stalemate unfolds amid renewed regional sensitivities. Washington has signaled opposition to backing any government led by al-Maliki, reflecting lingering concerns over his previous tenure, which ended in 2014 amid security collapse and political fragmentation. While no formal sanctions have been imposed in this context, US policymakers have consistently framed Iraq’s stability as linked to inclusive governance and balanced foreign policy.

Tehran, meanwhile, has emphasized maintaining unity within Shiite ranks. Iran’s strategic interest lies in preserving a cohesive Shiite political front capable of sustaining Iraq’s alignment within the so-called “Axis of Resistance,” while avoiding overt fragmentation that could weaken its influence.

This dual pressure places Iraqi factions in a delicate position. Any prime ministerial nominee must navigate domestic coalition arithmetic while avoiding confrontation with either Washington or Tehran.

Several Iraqi analysts who spoke to Shafaq News argue that calls for early elections amount to a procedural reset without structural reform. Iraq’s proportional representation system, revised in recent years, continues to favor established blocs with entrenched networks.

Without changes in political behavior or coalition-building logic, a new vote could reproduce similar parliamentary fragmentation. The fundamental issue, as Daham suggested, lies not in electoral mechanics but in “institutional maturity and political commitment.”

If the impasse continues, Iraq risks operating under an extended caretaker government with limited authority. Such a scenario could delay budgetary reforms, stall economic planning, and complicate security coordination at a time when Iraq faces fluctuating oil revenues and evolving regional security dynamics.

Written and edited by Shafaq News staff.

MNT GOAT: Iraq’s Huge Plan to Transform the Banking Sector: CBI Breaks the Parallel Market “For Good”

The financial landscape of Iraq is undergoing one of the most significant transformations in its modern history. According to recent developments and commentary from Mnt Goat, the independent Central Bank of Iraq (CBI) is aggressively advancing reforms—even amid political deadlock and election tensions.

Two powerful headlines signal a turning point:

“IRAQ HAS ‘HUGE PLAN’ TO TRANSFORM BANKING SECTOR, SAYS CBI GOVERNOR”
“MASROUR BARZANI PRAISES AL-ALAQ’S MEASURES TO IMPROVE THE BANKING SYSTEM IN IRAQ”

Let’s break down what this means for Iraq’s economy, the dinar, and the long-term monetary reform plan.

Political Deadlock vs. Financial Reform: Two Separate Tracks

While Iraq’s political scene has faced ongoing gridlock, the CBI has remained structurally independent. This independence is critical.

Even during election disputes and government formation challenges, the CBI has:

Continued restructuring banking compliance
Tightened anti-money laundering enforcement
Implemented global trade validation systems
Reduced reliance on the old currency auction mechanism

The reforms are moving forward in the background—quietly but strategically.

The “Huge Plan” to Transform Iraq’s Banking Sector

CBI Governor Ali Mohsen Al-Alaq has outlined a comprehensive modernization roadmap designed to:

1. Digitize and Formalize the Banking System

Iraq is shifting from cash-heavy practices to regulated, traceable, and internationally compliant banking operations.

2. End Abuse of the Currency Auction System

For years, the currency auction allowed certain merchants to manipulate paperwork—claiming fake imports to extract U.S. dollars from the CBI.

This created:

A massive parallel (black) market
Artificial dollar shortages
Capital flight
Funds flowing illegally across borders

That era is ending.

ASYCUDA: The Game-Changer Crushing the Parallel Market

The full implementation of ASYCUDA (Automated System for Customs Data)

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marks a turning point.

This system:

Verifies legitimate trade transactions
Digitally tracks imports and exports
Cross-checks documentation in real time
Blocks fraudulent dollar requests

Under the old auction model, importers could falsify invoices. With ASYCUDA fully operational, that loophole has effectively been sealed.

Why This Matters

Fake import claims are being rejected
Illegitimate dollar demand is collapsing
Money changers operating in the parallel market are shutting down
Dollar outflows—especially to sanctioned destinations—are drying up

This isn’t a temporary measure. The tightening is structural and systemic.

Breaking the Parallel Market — “This Time For Good”

The parallel market has long distorted Iraq’s exchange rate environment. But now:

Real trade must be documented
Dollar access requires verification
Compliance standards match global norms
Informal operators are being pushed out

For the first time, the CBI appears positioned to break the black-market cycle permanently.

Masrour Barzani Backs the Reforms

Prime Minister of the Kurdistan Region, Masrour Barzani, publicly praised Al-Alaq’s measures to strengthen the banking system.

This is significant because:

It signals federal-regional alignment
It reinforces confidence in the reform path
It shows political recognition of financial modernization

When regional and federal leaders align on banking reform, investor confidence rises.

Drying Up Illicit Dollar Flows

One of the most important developments is the reported reduction of dollar flows leaving Iraq through unofficial channels.

As compliance tightens:

Illicit cross-border transfers shrink
Sanctions exposure risk decreases
International credibility improves
Iraq’s integration into global banking strengthens

This supports long-term monetary stability and potential exchange rate reform.

What This Means for the Iraqi Dinar

While exchange rate changes are speculative and timing remains unknown, the structural pieces are falling into place:

✔️ Controlled dollar supply
✔️ Reduced black market spread
✔️ Verified trade flows
✔️ Stronger compliance
✔️ Digital oversight

These are prerequisites for any serious monetary reform.

The CBI is building the foundation before making any major currency moves.

Key Takeaways (Featured Snippet Ready)

What is Iraq’s banking reform plan?
Iraq’s Central Bank is implementing a large-scale modernization strategy that includes digital trade verification (ASYCUDA), anti-money laundering enforcement, and the dismantling of the parallel dollar market.

How does ASYCUDA impact the currency market?
ASYCUDA prevents fraudulent import documentation, blocks fake dollar requests, and significantly reduces black-market currency activity.

Is the parallel market ending?
Current reforms suggest the CBI is structurally eliminating the mechanisms that allowed the parallel market to thrive.

Q&A Section

Q1: What is ASYCUDA?

ASYCUDA (Automated System for Customs Data) is a digital customs management platform that verifies trade transactions and prevents fraudulent import claims.

Q2: Why was the currency auction system problematic?

It allowed certain merchants to falsify documents to obtain U.S. dollars, fueling the parallel market and capital flight.

Q3: Is the CBI independent from political disputes?

Yes. The Central Bank of Iraq operates independently and continues reforms despite political instability.

Q4: Are funds to Iran being affected?

Reports suggest illicit dollar flows are significantly reduced due to tighter compliance and trade verification.

Q5: Does this guarantee a dinar revaluation?

No timeline or guarantee exists. However, structural reforms are necessary groundwork for any future currency adjustment.

Final Thoughts

The reforms underway are not cosmetic. They are foundational.

Despite political uncertainty, the CBI is executing a coordinated strategy to:

Clean up the banking sector
End manipulation of the dollar system
Strengthen international compliance
Stabilize the monetary environment

If sustained, these measures could represent the most serious financial restructuring Iraq has seen in decades.

The parallel market may finally be facing its true end.

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Mnt Goat

Articles: “IRAQ HAS ‘HUGE PLAN’ TO TRANSFORM BANKING SECTOR, SAYS CBI GOVERNOR”; “

MASROUR BARZANI PRAISES AL-ALAQ’S MEASURES TO IMPROVE THE BANKING SYSTEM IN IRAQ”

...We all should know that even during the election deadlock and amidst all the ongoing saga associated with it,the independent Central Bank is still moving forward with reforms in the background.

The CBI is finally breaking the parallel market and this time ‘for good’. As we all know the “ASYCUDA” system was implemented in full swing recently. This system forces legitimacy of trade transactions. Remember that under the currency auctions merchants could lie and falsify papers of purchasing fake goods in order to get dollars out of the CBI. With ASYCUDA this just tightened the noose even more on the parallel market to the point where these money changes are going out of business. Funds going to Iran are also drying up.

DINAR REVALUATION