Iraq manages its exchange rate through a currency auction system. Every weekday the Central Bank of Iraq hold auctions where it sells US dollars, which come from Iraq's oil revenues, to licensed banks and money exchangers.
This is how it regulates the IQD to US dollar exchange rate and how importers access foreign currency..
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The Iraqi dinar doesn't have options, futures contracts or other financial products traded on global forex exchanges like the Chicago Mercantile Exchange. This makes it inaccessible to institutional investors who might be looking for hedging or large scale speculation.
What Could Happen If Trump Directly Supports Israel in Its War with Iran
If Donald Trump returns to power and openly and aggressively supports Israel in a war against Iran, several major regional and global consequences could occur:
1. Escalation of the Conflict
Trump’s direct military or political support could encourage Israel to intensify its attacks on Iran. In response, Iran may retaliate more forcefully — not just against Israel, but also against U.S. military bases, allies, and interests across the Middle East.
2. Increased Regional Instability
Countries like Iraq, Syria, Lebanon, and Yemen could become battlegrounds for proxy wars. Iran-backed groups (such as Hezbollah, the Houthis, and Iraqi militias) might launch attacks across the region.
3. Global Oil Crisis
A wider war in the Middle East could disrupt the flow of oil through the Strait of Hormuz, through which around 20% of the world’s oil passes. This could cause a spike in global oil prices and economic shockwaves worldwide.
4. Strained U.S. Relations with Allies
If Trump’s support appears too aggressive or unilateral, it could strain relations with Europe, NATO, the UN, and moderate Arab countries that prefer de-escalation. Some may view it as fueling a religious or ideological war.
5. Impact on Iraq
Iraq could be pulled deeper into the conflict:
Pro-Iranian militias in Iraq might attack U.S. forces or Israeli interests.
The Iraqi government may lose control of certain regions.
Iraq could suffer economically and politically, with possible delays in reforms and currency instability.
6. Nuclear Risk
An all-out war with Iran raises concerns about nuclear escalation or attacks on nuclear facilities. Although Iran does not have nuclear weapons, it has nuclear capabilities that could be targeted or accelerated in response to conflict.
Conclusion: If Trump fully backs Israel against Iran, it could trigger a major Middle East war, damage the global economy, increase terrorism, destabilize Iraq, and isolate the U.S. diplomatically. The consequences would be widespread and unpredictable.
While Iraq has vast potential in energy, construction, and agriculture, ongoing political instability, corruption, and regional conflict (especially Iran-Israel tensions) continue to scare off international investors.
Some Gulf countries and China remain active in select Iraqi infrastructure and energy projects.
Article: "Iraq is among the top 10 countries in the world in terms of natural resources."
I pointed this out several years ago. This is why Iraq could never significantly RV their currency overnight.
Such an event would bankrupt them since their entire net worth of natural resources is only $16 trillion dollars.
This is why the only way the dinar can go up in value is gradually over time so that they can reduce the money supply (remove zeros) from trillions to billions.