Iraqi foreign reserves rise to a historic level, 4 APRIL

 Iraqi foreign reserves rise to a historic level

 The Financial Advisor to the Prime Minister, Mazhar Mohammed Saleh, confirmed on Wednesday that the foreign reserve is at its historical highest levels in achieving balance and economic stability for the country, while pointing out that the reserves still cover more than 100% of the issued currency in circulation.

Saleh said in a press statement: “The decline in the Central Bank’s slight reserves, which is estimated at 1% of the country’s total foreign reserves, is related to two things: First, the high level of reinforcements of the Iraqi banking system in foreign exchange with their correspondents abroad for the purposes of trade financing and external transfer,

 which led to a significant decline in the dollar exchange rate in the parallel market against the dinar and the rise in the value of the dinar in that parallel market.”

He explained that “control over local liquidity levels has become high and at large and influential levels in the face of the increasing external value of the dinar, which still indicates the decline in the effectiveness of the parallel or secondary market in the country, as well as a very clear decline in growth rates in the general level of prices and very high price stability that the country has not witnessed before from high stability.”

He added that “the other matter depends on the degree of growth of the amounts in which public finances exchanged monthly oil revenues in foreign currency in dinars for the benefit of total spending (which is the basis of foreign reserve) and converting them into Iraqi dinars,” pointing out that “this is also related to the degree of discipline and control of public expenditures on the one hand, and thus slowing down the liquidation of the government foreign currency proceeds to domestic liquidity that can be spent on the other hand through the general budget.”

He pointed out that “taking into account the cautions of the volatility of the average prices of exported oil of $70 or less per barrel in the energy markets, which has occurred in recent months, which means that the consensus between the level of nutrition of the foreign balances reserve (by collecting them by cash issuance), which may have become at a less rapid pace and growth by public finances, and between external transfers in foreign exchange in the interest of financing private sector trade by the monetary authority, which is still at a relatively high frequency, which caused this shortcoming or slight decline in foreign reserves.”

Saleh added that “the foreign reserve is still at its highest historical levels in achieving economic balance and stability of the country, and that the function of foreign reserves remains to defend price stability, but it is also wise for the Central Bank of Iraq to monitor the current account movement of the balance of payments accurately to maintain the stability of foreign reserves and monitor their growth safely.”

He stressed that “these foreign reserves still cover more than 100% of the issued currency in circulation, and enjoy high trade efficiency of more than 15 months of import, in accordance with the three-month global standard,” adding that “the monetary authority is the only entity that manages the country’s monetary policy at the internal and external levels, and with a high consensus in terms of balance and transparency to achieve and maintain economic stability.”

https://alforatnews.iq/news/الاحتياطي-الأجنبي-العراقي-يرتفع-الى-مستوى-تاريخي

AJ : Devaluation Vs. Revaluation, 4 APRIL

 AJ 

Devaluation Vs. Revaluation

I’ve put together a detailed chart showing the monthly movements of the Iraqi Dinar (IQD) against the U.S. Dollar (USD) on the ICE exchange the largest FX exchange, spanning from 2005 to 2025.

This chart highlights the all-time high and low of the IQD, along with key moments of revaluation and devaluation. Let’s break it down and clear up some common misconceptions about how the IQD’s value moves against the USD. The Chart: Key Levels and Movements All-Time High and Low: The chart shows the IQD’s all-time high at 1,086 IQD per USD (equivalent to $0.000996 in USD) and its all-time low at 1,476 IQD per USD (equivalent to $0.000676 in USD). 

At the current price, 1,309 IQD equals $0.000776 in USD. Counterintuitive movement, It might seem strange at first, but a lower number of IQD per USD (e.g., 1,086) means the Dinar is stronger (a revaluation), while a higher number (e.g., 1,476) means the Dinar is weaker (a devaluation). 

Think of it like a scale: the closer the exchange rate gets to 0, the stronger the IQD is against the USD. Down Arrow (Revaluation): Around 2010, you’ll notice a sharp downward move on the chart frome the high 1476 IQD to 1,186 IQD. This indicates the IQD revalued higher against the USD, meaning it took fewer Dinars to buy a dollar...a sign of the IQD gaining value. Up Arrow (Devaluation): Fast forward to 2020, during the COVID-19 pandemic, and you’ll see a sharp upward spike (from 1,186 IQD to 1,450 IQD). This was a devaluation of the IQD, meaning it took more Dinars to buy a dollar.

Why? The crude oil market crashed...CME Futures for crude oil even traded below zero (yes, I couldn’t believe it either!). Since Iraq’s economy heavily relies on oil exports, this crash forced Iraq to devalue its currency to stabilize its economy. Why Did Iraq Devalue in 2020? Iraq’s economy is deeply tied to oil, which makes up over 90% of its export revenue When oil prices plummeted in 2020 due to the global lockdown and oversupply, Iraq faced a severe financial crisis.

Devaluing the Dinar made their oil exports cheaper in USD terms, helping to boost demand and bring in more foreign currency to stabilize their economy. 

However, this meant the IQD lost value for Iraqis, as imports (like food and goods) became more expensive. A Common Misconception: Revaluation vs. Devaluation in Times of Trouble Some people speculate that if Iraq faces economic trouble, it will revalue its currency ( make the IQD stronger).

But history shows the opposite. As seen in 2020, when Iraq was in crisis, they devalued the Dinar (moving from 1,186 to 1,450 IQD per USD). A revaluation would make their exports more expensive, which is the last thing a struggling oil-dependent economy needs. So, if someone tells you Iraq will revalue its currency because they’re in trouble, take it with a grain of salt. 

Based on past patterns, a devaluation is far more likely in such scenarios. Current State and What to Watch As of April 2, 2025, the IQD is at 1,309 per USD ($0.000776). 

It’s weaker than its all-time high but stronger than its 2020 low. Iraq’s economy is still heavily tied to oil prices, so keep an eye on global oil markets and Iraq’s efforts to diversify its economy will also play a role in the IQD’s future value Non-Oil-Revenues. Converting Recent Amounts 1,086 IQD (the all-time high) = $0.000996 USD 1,476 IQD (the all-time low) = $0.000676 USD 1,309 IQD (current rate) = $0.000776 USD If you’re holding Dinar or following its value, understanding these dynamics is key. Let me know if that helped you understand currency markets betterAJ

9:28 PM · Apr 2, 2025

ARIEL : The revaluation of the Iraqi Dinar is for the 'New Republic'! @DINARREVALUATION #iraqidinar

 

Global economic fallout? Experts weigh US tariff impact on Iraq, 4 APRIL

Global economic fallout? Experts weigh US tariff impact on Iraq

Shafaq News/ Experts are divided on the impact of the US tariffs imposed by President Donald Trump, with some suggesting significant global economic disruptions, while others downplay the direct consequences for Iraq.

Speaking to Shafaq News, economic expert Abdul Rahman Al-Mashhadani warned that both Iraq and the United States would suffer from the tariffs. He explained that the new duties could trigger a global economic slowdown, leading to a drop in global oil demand and, consequently, lower oil prices. Since oil imports account for 95% of Iraq’s budget, Iraq would be significantly impacted by these price fluctuations.

“Iraq’s exports to the United States are limited to oil, ranging between 250,000 and 450,000 barrels per day. Imposing tariffs on Iraqi oil would raise prices for refined oil products in the US market, which could reduce demand if the US is able to secure oil from other countries at more favorable prices,” he said.

Meanwhile, economist Nabil Al-Marsoumi downplayed the direct impact of the tariffs on Iraq's oil revenues. “while Trump has levied tariffs on various imported goods, ranging from 10% to 48%, oil, gas, and refined products are exempt from these duties.”

Al-Marsoumi also noted that the tariffs on Iraqi exports to the US, which are set at 39%, will have minimal impact due to Iraq’s limited export volume to the US. However, he acknowledged that the broader global effects of the tariffs could harm international trade and economic growth, reducing global demand for oil and exerting downward pressure on crude prices.

“Crude oil prices have already fallen by $2 in response to the tariffs…the full impact on global oil prices will become more apparent in the coming days.”

The tariffs, aimed at raising the cost of imported goods in the US to protect domestic industries and provide government revenue, have already prompted retaliatory measures from other nations, which have imposed tariffs on US exports.

DINAR UPDATE: The Iraqi Dinar Price Will Jump When Iraq Does This To The IQD, 4 APRIL

 DINAR UPDATE: The Iraqi Dinar Price Will Jump When Iraq Does This To The IQD

Chapter Summary: The Potential of the Iraqi Dinar

Introduction

The Iraqi dinar is a currency of significant interest due to its potential for appreciation against the US dollar, driven largely by the economic and political strategies employed by the Iraqi Central Bank and government.

 The Iraqi dinar (IQD) has recently been gaining value, reaching its highest level in nine months against the dollar.

 The significance of this development lies not only in the currency’s appreciation but also in the broader implications for Iraq’s economy. 

A critical move by the Iraqi authorities—abandoning the use of the US dollar in transactions—could catalyze a flood of international investments.

 This chapter will delve into key concepts surrounding currency valuation, the impact of historical geopolitical actions, and the potential pathways for value appreciation.

The Current State of the Iraqi Dinar

• The recent spike in the value of the Iraqi dinar  against the US dollar has garnered attention, with its exchange rate improving from approximately 1470 IQD to 1450 IQD.
• The Central Bank of Iraq has announced that most transactions will now operate solely in dinars, marking a significant policy shift.
• Historical context is crucial, as the dinar was once valued significantly higher than the dollar—approximately three to four times—prior to geopolitical conflicts.

The Economic Implications of Currency Policy Change

• To achieve a dramatic increase in the dinar’s value, the Iraqi government must stop accepting the US dollar for transactions.
• This abandonment of USD would encourage foreign buyers to purchase dinars for transactions involving Iraq’s abundant natural resources, particularly oil.
• The speaker argues that such a policy would create an artificial demand for the dinar, potentially resulting in an exponential rise in value.

Political and Historical Context

• The speaker reflects on the post-war period in Iraq, emphasizing that the US government’s intervention led to a depreciation of the dinar.
• Historical relationships between currency values and geopolitical changes suggest that re-establishing the dinar’s worth hinges on Iraq’s shifting away from dollar dependence.
• The commentary implies a level of frustration regarding external influences on Iraq’s currency policy and economic strategy.

The Landscape of Currency Investment

• The speaker shares personal investment experiences, having held dinar since 2012, with the outlook that its value will eventually rise.
• Caution is advised against concentrating too heavily on one investment, advocating instead for diversification across various asset classes.
• Cryptocurrency and real estate investments, particularly through tax liens, are highlighted as alternative means to optimize growth in assets.

Real-World Examples and Strategies

• A significant part of the economic landscape involves the emerging trend of investing in tax liens, where investors can earn substantial returns (between 18% to 36%).
• The process of leveraging real estate through tax liens is presented as a highly accessible and government-backed investment option—potentially as low as $200 to start.
• Throughout the discourse, the speaker appears to emphasize the need for individuals to employ savvy financial strategies to increase their wealth rather than relying solely on the appreciation of a singular asset.

Diverging Perspectives on Future Value

• Despite visible optimism regarding future appreciation of the dinar, the speaker acknowledges skepticism surrounding heavily promoted investment opportunities.
• There is a notable emphasis on cautious optimism; many have been misled by “fake gurus” in the financial realm.
• The speaker expresses confidence that if the Iraqi government effectively alters its economic strategy, the dinar could eventually be valued at between $1 to $3for one dinar—a considerable shift.

Conclusion

The potential for the Iraqi dinar to rise significantly hinges on strategic economic reforms by Iraq’s government, particularly regarding the use of currency in international trade. This shift not only holds promise for enhancing Iraq’s national currency value but also offers noteworthy implications for global oil pricing and financial markets. The commentary encourages viewers to cultivate a diversified investment strategy and remain vigilant against misleading financial promises. As Iraq stands at a crossroads, the implications of these financial decisions could reshape the nation’s economy and the future of its currency in a rapidly changing world.

Key Insights

• The dinar is showing signs of strength relative to the dollar.
• Full abandonment of the dollar in local transactions could lead to increased value of the dinar.
• Historical context plays a pivotal role in understanding the current and future currency valuation.
• Investments should be diversified to mitigate risks associated with market volatility.
• The transition to a more self-sufficient economy by leveraging national resources could enhance the dinar’s worth.

Further Considerations

• Stakeholders should monitor the Iraqi government’s currency policies closely for emerging opportunities.
• Educational resources on diversified investment options can enhance personal financial growth and resilience in the face of uncertainty.

In summary, the future of the Iraqi dinar appears to hinge on a delicate interplay of geopolitical determination, national policies, and the global economic environment. A strategic pivot by the Iraqi leadership could lead to profound implications, not only for domestic prosperity but also for international economic dynamics.

PIMPY: This means the Iraqi dinar has grown in value!! @DINARREVALUATION #iraqidinarinvestor

 

The performance of the Iraqi banking sector during the year: decline in some indicators and growth in others, 4 APRIL

The performance of the Iraqi banking sector during the year: decline in some indicators and growth in others

Economy News – Baghdad

The Iraqi banking sector has witnessed significant changes in its financial indicators during the past year, according to the issued data, which reflect the performance of commercial banks, the movement of cash, and the purchases and sales of the dollar, in addition to the policies of the Central Bank.

Commercial banks: decline in some assets and growth in private deposits

The data showed a decline in the assets of commercial banks by 0.92%, falling from 205.25 trillion dinars by the end of 2023 to 203.36 trillion dinars at the end of 2024. Current deposits also recorded a decrease of 9.38%, while private deposits increased by 10.63%, indicating increased trust of individuals in private banks compared to traditional current deposits.

Dollar movements: a sharp decline in central bank purchases

The Central Bank’s purchases of the dollar recorded a significant decline of 61.97%, falling from $8.35 billion to $3.18 billion. In contrast, dollar cash sales saw a slight decline of 0.92%, reflecting a decline in demand for hard currency within local markets.

Currency: decrease in the money supply and decline in the reserves of the issued currency /span>

The issued currency recorded a decrease of 1.36%, while cash outside banks decreased by 10.26% to reach 130.35 trillion dinars compared to 145.26 trillion dinars in the previous year. The ratio of mandatory reserves to the issued currency also decreased from 143.14% to 129.64%, indicating a reduction in cash availability in the market.

Central Bank: A rise in loans and a decrease in gold reserves

Loans granted to small and medium-sized enterprises witnessed a significant increase of 47.02%, reflecting a trend to support economic development through project financing. In contrast, gold reserves recorded a decline of 8.69% to reach 189.90 trillion dinars compared to 207.96 trillion dinars last year.

Inflation and the exchange rate: a marked decline

The inflation rate recorded a decline of 35.56%, falling from 4.50% to 2.90%, reflecting an improvement in price stability. The exchange rate in the parallel market also fell by 1.32%, in an indication of relative stability in the value of the dinar against the dollar

https://economy-news.net/content.php?id=54014