📉💳 How Electronic Transformation Is Driving Down the Dollar Exchange Rate in Iraq
The Prime Minister’s financial advisor, Mazhar Mohammed Saleh, confirmed that the growth of electronic transactions is reducing speculation and unrealistic demand for the dollar, lowering its price on the parallel market.
📲 Increased use of bank cards and digital payments has cut down cash dollar trading and improved control through pre-verification of transactions.
🌍 Iraq’s digital progress boosts compliance with international financial standards (FATF/MENAFATF), improving credit ratings and relations with global banks.
💡 The government’s digital transformation includes automating taxes/customs, digitizing contracts, and increasing transparency to fight corruption.
🚀 Support for digital entrepreneurship and tech startups
in AI, e-commerce, smart agriculture, and solar energy is growing.
📊 Iraq is moving toward a data and knowledge economy with AI-driven planning, national data centers, and improved internet infrastructure.
🔮 These advances promise more sustainable jobs, lower costs, and higher economic productivity in Iraq’s digital future.
WHAT IS THE RELATIONSHIP BETWEEN THE ELECTRONIC TRANSFORMATION AND THE DECLINE IN THE EXCHANGE RATE? AN IMPORTANT GOVERNMENT CLARIFICATION.
The Prime Minister’s financial advisor, Mazhar Mohammed Saleh, confirmed on Tuesday that the expansion of electronic transactions has contributed to reducing speculation and unreal demand for the dollar, which has lowered its price on the parallel market. He also noted that the reliance on digital payment tools has led to a decline in the volume of cash dollar trading.
Saleh said, “The expansion of the use of bank cards and electronic transactions has contributed to reducing speculation and unrealistic demand for the dollar, especially after linking transfers and trade finance operations to digital data and pre-verification of documents, such as the advance customs declaration.” He explained that “citizens’ reliance on digital payment tools, both domestically and during international travel, has led to a decline in the volume of dollar cash transactions outside the official system.”
Saleh explained that “this has begun to have positive impacts at the international level, given Iraq’s membership in the Middle East and North Africa Financial Action Task Force (MENAFATF), a regional organization established in 2004 that works to combat money laundering, terrorist financing, and the proliferation of weapons in the region, in line with the forty recommendations issued by the Financial Action Task Force (FATF) in Paris.”
He pointed out that “Iraq, through its digital advancements, has made tangible progress, particularly with enhanced compliance with the requirements of the Financial Action Task Force and international compliance practices. This has positively impacted Iraq’s current stable credit ratings and opened up broader horizons for better engagement with global correspondent banks, as we can see from the decline in the dollar exchange rate against the official rate in the parallel market in recent months.”
He emphasized that “modern electronic technology can be leveraged in Iraq through three complementary paths, the most important of which, based on the government’s program, is the digital transformation of public finances and economic governance, which includes several directions, including: automating taxes and customs to maximize non-oil revenues, digitizing government contracts, and distributing support to eligible groups, in addition to enhancing transparency and combating corruption through the presence of a digital fingerprint for every transaction.”
Regarding innovation and small business technology, Saleh noted that “digital technology development paths are taking on more modern dimensions, most notably supporting digital entrepreneurship, such as e-commerce, delivery apps, distance learning, and others. This is in addition to funding startups in the fields of artificial intelligence, smart agriculture, and solar energy, in addition to building digital platforms for vocational training and market access.”
He added, “There is a trend toward transitioning to a data and knowledge economy in close conjunction, through the establishment of national data centers, the use of artificial intelligence in planning, and the enhancement of internet infrastructure and the achievement of equitable access to it in accordance with global standards for digital justice. We also emphasize the importance of supporting the higher education sector in digital and technical specializations.”
He pointed out that “these trends will undoubtedly contribute to creating sustainable jobs, reducing operating costs, and increasing the productivity of the national economy in a promising digital era for Iraq.“
📊 Dinar Update: Market Stabilizes, Official Rate in Sight – August 2025 Highlights
💵 Iraqi Dinar Nears Official Rate – The gap between the official and parallel market rates is now just 4%, signaling tight control and a possible move to the next stage of monetary reform.
🔒 CBI’s Strategy Worked – Over the past year, Iraq implemented strong measures to regain control of the dollar:
🧠 From Chaos to Coordination – Once dominated by street speculation, the dinar market is now structured and regulated. The CBI has effectively “steered” the dinar away from volatility.
🛢️ Oil & Economic Diversification – Payment of dues in black oil and port controls were key to reducing demand for dollars. Iraq is being pushed to diversify beyond oil — a long-term win.
📈 CBI’s Long-Term Vision Coming Together – For 20 years, the Central Bank has aimed for currency stability. Under Dr. Shabibi and now Alaq, they’ve nearly completed the groundwork for a revaluation.
🧮 Why Stabilize First? – Iraq's dinar is pegged to the USD, so both rates must align to ensure credibility and prevent economic distortion. This alignment is also an IMF requirement.
📢 What’s Next? – The big question: Will the CBI wait the full IMF-mandated 2 months to maintain stability before any official move? Or is the current 4% gap “close enough” to proceed?
🧭 As one article puts it: “The dinar is no longer drifting – it’s being steered.”
