FRANK26: The Iraqi currency: a document that attracts tourists and investors.

 KTFA

FRANK26: The Iraqi currency: a document that attracts tourists and investors.

6/2/2025

Baghdad: Surur Al-Ali 

 

Currency has played a significant role in regulating economic and political life in Iraq, with its forms and symbols evolving over the ages, all the way to the modern era. It has become an essential part of the national and international economic structure, and with Baghdad being designated the Arab Capital of Tourism, it represents a means of attracting tourist investors.

The Iraqi currency has undergone many transformations, as historian Dr. Adel Shaker explains in a statement to Al-Sabah: “Commercial transactions in Iraq were based on a commodity exchange system, with commodities such as wheat, sheep, and vegetables being exchanged before they were regulated by written laws. These laws were written in cuneiform script, protected the rights of merchants, and regulated exchange operations.”

He emphasized that over time, currencies evolved and diversified in their forms. Gold and silver coins appeared bearing important slogans, such as "There is no god but God, Muhammad is the Messenger of God" or "Ali is the guardian of God." They immortalized the names of kings and historical events, especially in regions such as the city of Hatra in northern Iraq, which went through multiple political phases. Its kings placed slogans expressing their beliefs and deities, such as the sun god.  

The system was initially disorganized, until laws intervened to regulate these processes. Priests controlled the temple and regulated religious, social, and political life. They wrote down laws on cuneiform tablets, which are now part of museums and illustrate ancient trade operations. 

Shaker explained that the beginnings of the use of currency in Iraq date back to the First World War, when Iraq was part of the Indian monetary region, and the Indian rupee was used as legal tender during that period until the year 1932. In the year 1931, the Iraqi Currency Committee was established pursuant to Law No. (44) of 1931, then it was abolished and the National Bank of Iraq was established pursuant to Laws No. (42, 43) of the year (1947) to undertake the issuance of currency. 

Pointing out that the Iraqi currency went through several stages, namely the royal edition bearing the image of King Faisal, which continued until 1958, the edition bearing the republican emblem until 1978, and the international edition called (the Swiss edition), which was printed by the British company Delao and the Soviet Exportless until 1990. As a result of the economic blockade that Iraq went through, the Central Bank of Iraq printed banknotes at the Al-Nahrain Printing House, which did not meet security specifications and were made of plain paper. In early 2003, the Central Bank withdrew all local and international banknotes called the Swiss edition, and introduced the new series of Iraqi dinars, consisting of seven denominations, which were printed with high security specifications, and continued to be developed.

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DINAR REVALUATION REPORT: 🇮🇶 How Important Is the Oil & Gas Law for the Iraqi Dinar Exchange Rate Reform?

DINAR REVALUATION REPORT: 

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🇮🇶 How Important Is the Oil & Gas Law for the Iraqi Dinar Exchange Rate Reform?

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📰 Context from the Article

The article highlights the ongoing feud between the Iraqi Federal Government in Baghdad and the Kurdistan Regional Government (KRG) over:

• Control of oil revenues,

• Management of oil exports from the Kurdistan region,

• And delayed salary payments used as political leverage.

This standoff is destabilizing both the political and economic landscape of Iraq.

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🔗 Direct Link to the Exchange Rate Reform

1. Oil is the foundation of Iraq’s rentier economy

• Over 90% of Iraq's national budget relies on oil revenues.

• Without a clear and unified Oil & Gas Law, the state lacks centralized control over its oil sector, leading to:

  • Revenue uncertainty,

  • Weak fiscal planning,

  • And loss of investor and international confidence.

✅ Impact on exchange rate reform:
The Central Bank of Iraq (CBI) cannot stabilize the dinar without reliable and centralized inflows of oil-related foreign currency (mostly USD).

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2. No law = No legal security for investors

• The absence of a federal Oil & Gas Law means:

  • Contracts signed by the KRG with foreign oil companies are not recognized by Baghdad.

  • Investors view the sector as legally unstable and politically risky.

✅ Impact on exchange rate reform:
Without sustained foreign direct investment (FDI) in oil and gas, foreign currency inflows are limited, undermining support for the Iraqi dinar.

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3. Lack of fiscal unity weakens monetary policy

• The Baghdad–Erbil feud creates a fragmented economic system:

  • KRG exports oil independently.

  • Oil revenues are not fully transferred to the national treasury.

  • This limits the Central Bank’s ability to forecast USD supply and control inflation.

✅ Impact on exchange rate reform:
A country with two conflicting fiscal systems cannot maintain a predictable or unified exchange rate, nor meet IMF and international standards.

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📌 Conclusion: How important is passing the Oil & Gas Law?

✅ It is absolutely essential.
The Iraqi dinar exchange rate reform cannot succeed without the passage of a Federal Oil & Gas Law that:

1. Centralizes oil revenues under one national system.

2. Defines fair revenue sharing between the federal and regional governments.

3. Builds investor confidence through legal clarity and national unity.

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💡 In summary:

Without a Federal Oil & Gas Law, Iraq will remain trapped in internal power struggles that undermine financial stability, deter investment, and weaken the dinar’s value. The law is just as critical as the Central Bank's monetary tools in exchange rate reform.

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SOURCE: DINARREVALUATION

FIREFLY: They say soon the parallel market price will come to match the official CBI rate #iqd

 

KRG on salary crisis: International support needed

 Shafaq News/ The Kurdistan Regional Government (KRG) on Wednesday strongly criticized the Iraqi Ministry of Finance’s decision to halt funding for public sector salaries, calling it “unconstitutional, unlawful, and a form of collective punishment.”

During its weekly session, chaired by Prime Minister Masrour Barzani, the Council of Ministers affirmed that the Region had fulfilled all its obligations and submitted the required financial data transparently to the joint audit committee of both federal and Regional oversight bodies.

Prime Minister Barzani pointed to the 2025 agreement between the federal and Regional finance ministries, which ensures the disbursement of full monthly salaries throughout the year. He also referenced a Federal Supreme Court ruling that disputes over the Federal Budget Law must not be used to justify suspending salary payments, emphasizing the constitutional principle of equal treatment for all Iraqi citizens.

The Council described the recent federal decision as politically driven and warned against any suspension of salary payments in the coming months, stating that such measures unfairly  target the population of the Kurdistan Region.

The KRG resolved to formally brief the international community and diplomatic representatives on the legal, constitutional, and financial aspects of the issue, urging support for a resolution within the framework of Iraq’s constitution.

DINAR REVALUATION REPORT: 🇮🇶 The 3 Phases of the Iraqi Dinar Exchange Rate Reform

DINAR REVALUATION REPORT: 

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🇮🇶 The 3 Phases of the Iraqi Dinar Exchange Rate Reform

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1. Closing the Gap Between the Official Rate and the Street Rate

✅ What does it mean?

• The official exchange rate is set by the Central Bank of Iraq (CBI) for legitimate banking and trade operations.

• The "street rate" refers to the rate in the informal market, which is often higher due to:

  • Limited access to dollars,

  • Weak enforcement of monetary controls,

  • A strong black market presence.

🎯 Goal:

• Unify or closely align the official and parallel exchange rates to:

  • Improve transparency,

  • Reduce speculation,

  • Restore confidence in the national currency.

📉 Implications:

• This phase requires:

  • Increasing official dollar supply,

  • Tightening anti-money laundering enforcement,

  • Improving regulation of informal markets.

• It is a technically difficult but foundational step for economic stabilization.

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2. Agreement with the IMF and Compliance with Global Standards

✅ What does it mean?

• This phase ensures the Iraqi dinar complies with international financial standards, especially regarding:

  • Currency transfer transparency,

  • Anti-money laundering (AML),

  • Know Your Customer (KYC) regulations.

📋 Involves:

• Collaboration with the International Monetary Fund (IMF).

• Reforming the banking system:

  • Increase capital adequacy ,

  • Improve governance,

  • Enhance oversight and digital infrastructure.

🌍 Why is it important?

• Achieving compliance allows Iraq to:

  • Regain international financial credibility,

  • Attract foreign investment,

  • Ensure full integration with the global financial system.

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3. Engagement and International Integration

✅ What does it mean?

• After stabilizing the exchange rate and meeting global standards, Iraq aims to actively engage with international financial markets and economic partners.

🌐 Involves:

• Expanding financial inclusion (bringing more people and businesses into the banking system).

• Encouraging foreign direct investment (FDI) in non-oil sectors.

• Building bilateral and multilateral agreements for trade, finance, and cooperation.

• Increasing the presence of the Iraqi dinar in international financial platforms (e.g., SWIFT, cross-border transactions).

🤝 Expected outcomes:

• A more stable and attractive financial environment.

• Increased use of the Iraqi dinar domestically (reducing dollarization).

• Potential long-term appreciation of the dinar, backed by real economic reforms.

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📌 Summary of the 3 Phases

Phase	Objective	Key Outcome
1. Close the exchange rate gap	Stabilize the official and street markets	Restore trust in the exchange system
2. IMF agreement & compliance	Meet global standards, reform banking	Boost international confidence
3. International engagement	Integrate Iraq into global economy	Attract investment & promote dinar use

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SOURCE: DINARREVALUATION 

WALKINGSTICK :This [Forex] memo confirms the IIQD is fully armed for public rate visibility at $4.81

 

Oil vs. Salaries: KRG-Baghdad feud pushes Iraq to the brink

Shafaq News/ As the Kurdistan Region's salary crisis resurfaces, alarms grow louder over the broader ramifications. The economic tension carries a potent political undertone that, if left unresolved, could destabilize Iraq’s political framework.

The dispute between Erbil and Baghdad reignited after the Kurdistan Region accused the federal government of "discrimination" in salary disbursement. The Region pointed to repeated delays in receiving dues despite earlier agreements. Baghdad countered by citing the Kurdistan Regional Government’s failure to deliver oil and non-oil revenues as stipulated in the federal budget law.

To contain the escalating crisis, the federal government is expected to dispatch a financial advance to the Kurdistan Region within two days to ensure employees receive their salaries before Eid al-Adha (June 6-9). However, nothing has changed so far.

Economic War

Kurdish political analyst Mohammed Zangana describes the allocation of funds as “not charity toward the people of Kurdistan, but a constitutional and legal right.” He references the tripartite budget law (2023–2025) and a 2024 Federal Court ruling mandating salary payments from the federal treasury to the Kurdistan Region.

Zangana characterizes the ongoing situation as an “economic war waged by Baghdad against the region since 2014,” urging for a simple resolution: “separate the salaries of Kurdistan’s employees from political bickering and disputes.”

The agreement stipulates that the Kurdistan Region must send 400,000 barrels of oil daily to federal depots in exchange for employee salaries. However, those depots can handle no more than 80,000 barrels per day. “Even the amount sent hasn’t yielded a single cent,” Zangana notes, adding, “no agreement has been reached on the price per barrel.”

On the Kurdistan Democratic Party's threat to withdraw from the political process, Zangana believes the Coordination Framework (CF), a predominantly Shiite group that controls the Iraqi government, fully grasps the danger posed by such a move. “This is a warning to the Framework,” he asserts.

Zangana also highlights a “lack of will” from Baghdad to pass an oil and gas law, explaining that such legislation would grant provinces and regions constitutional autonomy under Articles 112 and 121 of the Iraqi Constitution. He foresees only temporary solutions ahead: “There won’t be any radical remedies—just patchwork until the elections.”

Financial Strain

Parliamentarian Mukhtar al-Mousawi, a senior figure in the Badr Organization, a movement within the Framework, expects the two sides to reach a “mutual understanding.”

“The Region’s recurring threats to withdraw from the political process whenever it faces liquidity issues and pressures the federal government—that’s not a sound approach,” he states in remarks to Shafaq News, urging the Region to “reorganize its affairs according to its own budget.”

Al-Mousawi explains that Iraq is currently navigating a financial crunch, and the 2025 budget has yet to reach Parliament. “Meanwhile, the Region resists accountability on how it manages oil and gas export revenues.”

Constitution and Oil & Gas Law

Ibrahim al-Sikani, a member of the State of Law Coalition led by Nouri al-Maliki, another CF group, strikes a balancing tone. “The Constitution governs all national matters from north to south, especially Kurdistan Region salaries and the ongoing oil and gas issues,” he tells Shafaq News.

He places the responsibility for salary payments squarely on Prime Minister Mohammed Shia al-Sudani. “The Coordination Framework is blamed because the shortfall comes from its nominee, Al-Sudani, but the Framework won’t tolerate any failure from the government toward the Iraqi people—north or south.”

Al-Sikani also discloses that the Framework has resolved to form a delegation to visit the Kurdistan Region and negotiate solutions, emphasizing that passing the Oil and Gas Law would eliminate recurring disputes.

He calls on Parliament to act, urging sessions to approve the law and the budget—still stalled in the Prime Minister’s office— “despite its direct impact on the lives of the Iraqi people.” “I urge al-Sudani to hold a parliamentary session to lay all the facts bare before the public.”

In this context, political analyst Aed al-Hilali appeals to all political blocs to engage in frank and direct dialogue with Kurdish representatives. “The salary issue is no longer bearable, especially with the Kurdistan Democratic Party threatening to boycott the political process, which could lead to the collapse of Iraq’s political system,” he cautions.

Still, al-Hilali voices cautious optimism, “The salary crisis may soon be resolved, but fundamental solutions remain necessary,” He outlines key steps forward—revisiting the Constitution and amending certain articles that “may help achieve lasting resolutions.”