PROS AND CONS OF US EXCLUDING IRAQ FROM THE NATIONAL SECURITY STRATEGY
Once a central focus of US Middle East security strategies, Iraq was notably absent from the latest National Security Strategy released by the administration of President Donald Trump.
Safwan Al-Amin, non-resident fellow in the Iraq program at the Atlantic Council, said this factor “reflects several things.” Speaking to Shafaq News, he noted that the first reflection is that “Iraq is clearly not on the administration’s priority list in the region.” So far, he added, “the opportunities that Iraq presents for the US have not been well-defined.”
But more positively, he noticed that this “also shows that Iraq no longer presents a significant threat to US interests in the region, to the point where it needed to be added to the NSS.”
Al-Amin noted that “the administration’s apportionments that would be responsible for coordinating and making policy in relation to Iraq have been delayed, and the team is just beginning to take shape now.” The administration of US President Donald Trump has unveiled its 2025 National Security Strategy, outlining the foreign-policy and defense priorities that will guide Washington in the coming years.
Branded under the slogan “America First,” the document not only declares an end to the era of military interventions and regime-change campaigns, but also introduces an entirely new framework for the Middle East.
Introduction: Why 2025 Was a Defining Year for the Iraqi Dinar
In 2025, the Central Bank of Iraq (CBI) issued a series of official statements that collectively provide one of the clearest pictures yet of Iraq’s monetary direction. Rather than speculation, these updates reflect measurable reforms, policy clarity, and institutional intent.
This article summarizes 10 key moments from the CBI in 2025 that directly impact the Iraqi dinar (IQD), financial stability, digital banking, and investor confidence.
1. February 19: One of the World’s Most Monitored Dollar Systems
Following meetings with the U.S. Treasury and Federal Reserve in Dubai, the CBI announced that Iraq’s dollar distribution system is now considered among the most monitored and controlled globally
The CBI also urged the public to rely solely on official sources and warned against misinformation.
2. February 27: Cash Transactions Will Gradually Decline
CBI Governor Ali Mohsen Al-Allaq highlighted rapid progress in digital payments.
Major Achievements
Financial inclusion doubled from 20% to 40% in two years
Expansion of ATMs and e-wallets
Adoption of internationally accredited banking systems
Banks are transitioning into smart digital platforms, including plans for digital financial identities.
3. May 8: Official List of Banks for Dollar Purchases
The CBI announced that Iraqi pilgrims can legally purchase U.S. dollars through designated banks and approved companies across Baghdad and other provinces.
Why This Matters
Reduces black-market dependency
Enhances transparency
Reinforces controlled currency access
4. September 4: Inter-Wallet Transfers Launched
The CBI launched inter-wallet money transfer services, allowing faster and more flexible transactions.
Benefits
Supports digital transformation
Enhances financial inclusion
Strengthens business operations
Improves liquidity movement
This was described as a qualitative leap in Iraq’s financial system.
5. November 19: Investment Department Supports Exchange Rate Stability
The CBI clarified the role of its Investment Department, emphasizing its mission to:
Maintain confidence in the dinar
Support exchange rate stability
Manage monetary assets responsibly
This statement reinforced the CBI’s long-term stabilization strategy.
6. November 21: New Instructions for Exchanging Dinars
The Central Bank issued detailed regulations for:
Trading banknotes
Replacing damaged currency
Identifying fit vs. unfit notes
Sorting and counting procedures
This update improves currency quality control and trust.
7. November 24: Firm Denial of Exchange Rate Changes
The CBI categorically denied any plans to modify the exchange rate.
Official Position
Rumors are aimed at market disruption
No intention to change the IQD rate
Stability remains the priority
This statement directly countered speculative narratives.
8. December 2: Digital Dinar Under Development
Governor Al-Allaq confirmed that:
The digital dinar project is underway
Launch requires time and infrastructure
Exchange rates should not be used to fix fiscal gaps
He warned that devaluation would:
Harm low-income citizens
Erode confidence in the dinar
9. December 17: Currency Supply Reduced by 5.5%
The CBI reported a 5.5% reduction in issued currency during Q3 2025:
2024: 104,127 billion IQD
2025: 99,681 billion IQD
Why This Is Important
Reduces inflationary pressure
Improves monetary control
Signals disciplined currency management
10. December 18: Inflation Falls to Historic Lows
The CBI announced that inflation dropped to -0.8% in Q3 2025, compared to 3.5% in Q3 2024.
Implications
Strong purchasing power
Effective monetary policy
Increased economic confidence
Featured Snippet
What did the Central Bank of Iraq say about the Iraqi dinar in 2025? In 2025, the CBI emphasized currency stability, denied any exchange rate changes, reduced money supply, expanded digital banking, launched inter-wallet transfers, and reported historically low inflation, signaling strong monetary control.
Q&A: Iraqi Dinar and CBI Policy in 2025
Q: Did the CBI change the exchange rate in 2025?
A: No. The CBI explicitly denied any intention to alter the exchange rate.
Q: Is Iraq moving toward digital currency?
A: Yes. The digital dinar is under development, pending infrastructure readiness.
Q: Why is reducing currency supply important?
A: It helps control inflation and strengthens monetary stability.
Q: Are cash transactions being phased out?
A: Gradually, as digital payments and financial inclusion expand.
Key Takeaways
The CBI prioritized stability over speculation
Digital banking advanced rapidly
Inflation reached historic lows
Currency control tightened significantly
Exchange rate rumors were firmly rejected
Conclusion: A Year of Monetary Discipline and Transparency
The Central Bank of Iraq’s statements in 2025 paint a clear picture: discipline, modernization, and stability. Rather than sudden currency moves, the focus remains on long-term credibility, digital transformation, and protecting the dinar’s purchasing power.
For observers, 2025 stands as a foundational year, not a speculative one.
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Following meetings with the US Treasury and Federal Reserve in Dubai, the CBI reported recognition of Iraq's US dollar distribution system as one of the most monitored and controlled globally, effectively limiting manipulation and illicit dollar outflows. The bank emphasized significant transformation in international transfers aligning with global banking standards.
The CBI urged reliance on official channels for updates and warned against misinformation.
Ali Mohsen Al-Allaq, Governor of the Central Bank of Iraq (CBI), highlighted significant progress in digital payments, citing an increase in ATMs and e-wallets, which helped boost financial inclusion to 40% from 20% in just two years, supported by CBI initiatives.
He noted that Iraqi banks are undergoing major transformations, adopting internationally accredited financial systems to enhance cross-currency transactions and banking operations. Looking ahead, he envisioned banks shifting from traditional entities to smart digital platforms, issuing digital financial identities to facilitate seamless transactions.
The Central Bank announced the launch of inter-wallet money transfer services, enabling individuals and businesses to conduct financial transactions with greater speed and flexibility. The CBI said this development marks a qualitative step in enhancing financial inclusion, supporting digital transformation, facilitating the movement of funds, and strengthening the business sector.
The Central Bank issued a statement outlining the role of its Investment Department in supporting exchange rate stability. The department's objectives focus on maintaining confidence in the dinar.
The Central Bank issued comprehensive instructions setting out criteria for trading and replacing banknotes, including standards for fit and unfit currency, procedures for damaged notes, and mechanisms for counting and sorting.
The Central Bank rejected rumours of a possible exchange rate modification, calling such speculation aimed at disrupting markets and undermining economic stability. The bank confirmed there is no intention whatsoever to amend the exchange rate of the Iraqi dinar.
Governor Ali Mohsen Al-Alaq stated that the digital dinar project is under implementation, but requires time and robust infrastructure before launch. He stressed that the exchange rate should not be used as a tool to address structural fiscal gaps, warning that a devaluation of the dinar would harm low-income groups and erode confidence in the currency.
The CBI reported a 5.5 percent decline in currency issued during the third quarter of 2025, falling to 99,681 billion Iraqi dinars from 104,127 billion Iraqi dinars in the same period of 2024.
The Central Bank of Iraq (CBI) reported that Iraq's inflation rate fell to -0.8 percent in the third quarter of 2025, down from 3.5 percent in the same period of 2024.
THE EUROPEAN UNION AFFIRMS ITS COMMITMENT TO EXPANDING COOPERATION WITH IRAQ
The European Union today affirmed its commitment to expanding cooperation with Iraq.
A statement from the Ministry of Foreign Affairs, received by the Iraqi News Agency (INA), stated that “the Undersecretary of the Ministry of Foreign Affairs in Baghdad, Ambassador Mohammed Hussein Mohammed Bahr Al-Uloom, received the European Union Ambassador to Iraq, Clemens Zimmtner.”
He added, “At the beginning of the meeting, the Undersecretary welcomed the Ambassador, stressing the Ministry’s keenness to strengthen the partnership with the European Union and raise the level of cooperation in various fields, especially political, economic and developmental fields.”
He explained that “Iraq views the European Union as a reliable partner and supporter of the paths of stability and growth.”
For his part, the European Union ambassador affirmed that “the Union sees Iraq as a strong and pivotal partner in the region,” stressing “the need for the continued development of the Iraqi economy and support for the stability that the country is witnessing, which contributes to enhancing its ability to play its regional and international role.”
He pointed out “the keenness of the Union countries to expand the horizons of cooperation with Iraq during the next stage,” indicating that the two sides discussed during the meeting the issue of ending the work of the United Nations Assistance Mission for Iraq (UNAMI), and the mechanisms for moving to a new stage of cooperation that focuses on technical and institutional support.
He added: “They also discussed the latest developments in the Syrian file, and stressed the importance of continuing coordination on regional developments of common interest.”
Introduction: Separating Real Optimism from Propaganda
According to Mnt Goat, there is currently more genuine optimism and positive progress in Iraq than negative propaganda, especially regarding the country’s monetary reform. However, misleading or exaggerated narratives continue to circulate.
For Iraqi dinar observers and holders, understanding what is real, what is structural, and what is still pending is essential. This update focuses on credible indicators, including insights attributed to Central Bank of Iraq (CBI) sources and publicly available information.
Why Optimism Is Growing Around the Iraqi Dinar
Mnt Goat emphasizes a critical point:
“There is much more evidence than not that everything is pointing to early 2026.”
This optimism is based on:
Ongoing economic reforms
Clear planning for currency normalization
Consistent messaging around timing and preparation
Rather than sudden action, this perspective highlights a structured and methodical process.
Early 2026: Why This Timeline Is Being Discussed
Normalization, Not Hype
The term normalization refers to:
Returning the dinar to global currency markets
Allowing Forex trading under international standards
Establishing a realistic and tradable exchange rate
Mnt Goat stresses that this timeline is not speculation, but based on:
Information attributed to CBI contacts
Supporting economic articles
Institutional readiness
The message being conveyed is simple:
“Now is the time to prepare, not to guess.”
Understanding the “Deletion of the Zeros” Process
One of the most misunderstood aspects of Iraq’s monetary reform is the zero-deletion or redenomination process.
Will the Old 3-Zero Notes Be Cancelled?
No. According to Mnt Goat’s explanation:
The three-zero notes will NOT be null and void
They will be removed from daily public circulation
They will continue to be used internally for inter-banking and large trade transactions
This distinction is crucial.
Role of the 25,000 Dinar Note in Inter-Banking Transactions
The Central Bank of Iraq has reportedly indicated that:
The 25,000 IQD note will remain in use
It will be used primarily for large-scale banking and trade settlements
Why This Matters
Using high-denomination notes internally:
Improves efficiency
Reduces transaction volume
Supports large-value settlements
This also implies that these notes increase in value as the currency strengthens.
Illustrative Example (Conceptual, Not a Prediction)
Mnt Goat provides an example to explain the concept:
If 1 dinar = $4 USD
Then a 25,000 dinar note = $100,000 USD in inter-banking value
⚠️ Important Note: This example is illustrative only, not a forecast or guaranteed rate. It demonstrates
how redenomination mechanics work, not what the final exchange rate will be.
Featured Snippet
What happens to the old 3-zero Iraqi dinar notes during redenomination?
The old three-zero notes are not canceled. They are removed from daily circulation but continue to be used for inter-banking and large trade transactions, according to explanations linked to the Central Bank of Iraq.
Why This Process Supports Currency Appreciation
Key structural advantages include: ✔ Reduced cash circulation ✔ Improved monetary control ✔ Alignment with international banking systems ✔ Preparation for Forex trading
Together, these steps support long-term currency strength, not short-term speculation.
Addressing Propaganda and Unrealistic Claims
Mnt Goat cautions against:
Sensational headlines
Guaranteed rates or dates
Fear-based or hype-driven narratives
Instead, the focus should remain on verified reforms and institutional readiness.
Q&A: Mnt Goat Iraq Update Explained
Q: Are the 3-zero notes becoming worthless?
A: No. They are being removed from public circulation, not invalidated.
Q: Will the dinar return to Forex markets?
A: According to Mnt Goat’s analysis, this is expected as part of normalization, potentially by early 2026.
Q: Is the $4 example a real rate?
A: No. It is an example used to explain redenomination mechanics.
Q: Why is optimism justified now?
A: Because reforms, reserves, and planning are aligning toward global compliance.
Key Takeaways
Optimism is grounded in structural reform, not rumor
Zero deletion is a controlled redenomination process
Old notes retain value in inter-banking use
Forex normalization requires readiness, not speed
Conclusion: A Methodical Path Toward Normalization
The Mnt Goat update reinforces a consistent theme: Iraq’s monetary reform is progressing deliberately and strategically. While early 2026 is often referenced, success depends on preparation, compliance, and stability—not hype.
For observers, the focus should remain on education, patience, and verified developments.
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There is so much real optimism and VERY GOOD news for Iraq and yet there is still lots of propaganda news... As investors in the Iraqi dinar, we need to hear optimistic and truthful news and it is all optimistic let there be no mistake about it...
There is much more evidence than not that everything is pointing to early 2026 for them to normalize the dinar and place it back on FOREX to trade...I...can only rely on what my contact in the CBI along with the articles were telling us. They are telling us NOW IS THE TIME!
How the process on deleting the zeros will work. Will they null and void out the old 3 zero notes once they redenominate?
In ordinary daily circulation of the dinar the 3 zeros notes will be taken out of circulation not null and voided, thus only taken out of the general circulation. However, the CBI has told us they will still use the 3 zero notes for inter-banking transactions for trade when large sums of money is necessary.
They will use mostly the 25,000 dinar notes for this purpose. This statement by the CBI also tells us these older 3 zeros notes will increase in value. [example: ...a one dinar notes equal to four US dollars. So, within inter-banking transactions a 25,000 note would be worth $100,000 ($4 x 25,000).]
TRUMP’S ENVOY: THE DECISION OF IRAQI LEADERS WILL DETERMINE WHETHER THE COUNTRY MOVES TOWARDS SOVEREIGNTY OR SLIDES INTO DISINTEGRATION
(WOW! Now we all get the clear message of Savaya from the Trump administration on the two possible futures of Iraq just as Iraq’s former deputy prime minister Hoshyar Zebari speaks on the country’s future after elections. Remember the video I presented to you in my 12/9 Newsletter?)
Savaya concluded his post by saying, “Under President Trump’s leadership, the United States stands ready to support Iraq during this critical time. My team of highly experienced experts and I are committed to working closely with Iraqi leaders in the coming weeks and months to help build a strong state, a stable future, and a sovereign Iraq capable of shaping its own destiny in the new Middle East.”
US President’s envoy to Iraq, Mark Savaya, warned on Thursday of Iraq’s slide towards disintegration and decline, noting that no nation can succeed in the presence of armed groups competing with the state, and stressing the United States’ readiness to support Iraq during this critical stage.
In a post on the “X” platform, which was followed by “Al-Rasheed”, Savaya said, “Twenty-three years after the fall of the dictatorship, Iraq stands once again at a critical juncture. The country has been given a historic opportunity to rebuild its institutions and secure a prosperous future. However, no nation can succeed while armed groups compete with the state and undermine its authority. This division has weakened Iraq’s international standing, stifled its economy, and limited its ability to protect its national interests.”
He added: “Over the past three years, Iraq has proven that true stability is possible when the government adopts a realistic and balanced approach that spares the country regional conflicts and refocuses on national priorities. This emerging path must be maintained and not obstructed. Stability requires responsible leadership, unity of purpose, and a firm commitment to strengthening the state and its institutions.”
Savaya added, “Today, as Iraq celebrates the eighth anniversary of its victory over ISIS and successfully concludes its parliamentary elections, the full responsibility lies with the country’s political and religious leaders. Their decision in the coming period will determine whether Iraq will move towards sovereignty and strength or slide back into disintegration and decline.”
He continued: “A unified and rational choice will send a clear and unequivocal signal to the United States and the international community that Iraq is ready to assume its rightful place as a stable and respected nation in the new Middle East. The alternative is equally clear: economic decline, political turmoil, and international isolation.”
