THE GENERAL BUDGET LAW: CAN IT BE ISSUED IN THE EVENT OF A CONSTITUTIONAL VACUUM?
A financial advisor confirmed that the 2026 budget law can be issued in the event of any constitutional vacuum, after consulting the opinion of the Supreme Federal Court.
The Prime Minister’s financial advisor, Mazhar Muhammad Salih, explained on Thursday that government spending will continue according to the (1/12) rule until the 2026 budget is approved, while noting that the monthly salaries of employees, retirees and welfare amount to 8 trillion dinars.
(Mnt Goat: how do they get into this situation each year after the election? It is because they do not follow the constitutional deadlines to move the election process along. What caused the delay this time was not the Kurds as it was the proposed nomination of Nori al-Maliki.)
Continuation of fiscal policy
Saleh said : “The fiscal policy has been carrying out its duties since the second month of this year 2026 in accordance with the provisions of the amended Federal Financial Management Law No. (6) of 2019, by spending at a rate of (1/12) of the actual current public expenditures for the year 2025.”
He explained that “public finances benefit from the provisions of paragraph (29) of the aforementioned law, which allows the financial authority to adopt temporary financing mechanisms and liquidity management in the event that spending cannot be carried out according to the legally legislated regular budget.”
He added that “the aforementioned provisions confirm the principle of temporary financing in the event of a delay in the approval of the budget law or a temporary shortage of liquidity necessary for spending. This allows the Ministry of Finance to take transitional financial measures that ensure the continued disbursement of priority expenditures without delay. Foremost among these are salaries, wages, pensions and social welfare allocations, which are estimated at about eight trillion dinars per month.”
The possibility of issuing the general budget law
Regarding the possibility of legislating the budget law in the event of a failure to elect a president, Saleh explained that “this is a rare occurrence, but it may impose itself due to the necessities of the supreme national interest, especially since the House of Representatives is the constitutional body competent to legislate the budget law. In this context, the possibility of issuing the 2026 budget law can be considered after consulting the opinion of the Supreme Federal Court, as it is a constitutional court specializing in resolving the problems of parliamentary sessions, especially in cases of the complete absence of the president.”
He also pointed out that “the President of the Republic, Abdul Latif Jamal Rashid, and the Prime Minister, Mohammed Shia Al-Sudani, are still in a position of legal responsibility at the moment, which allows, in principle, the request to prepare a draft of the federal general budget law and submit it to the House of Representatives to begin the legislative process, if the elected legislative authority wishes to do so.”
🚨 MNT GOAT UPDATE: Financial Crisis or Strategic Reform?
An article titled:
“Acknowledging the Financial Crisis, MP Says Changing the Dollar Exchange Rate Is Within the Purview of the Next Government”
has sparked discussion across economic circles.
But let’s clarify something immediately:
This article is NOT about a full RV (Revaluation) in the way investors hope.
It is about combating the parallel dollar market so the dinar can gradually strengthen against the dollar.
Big difference.
📉 Is Iraq Really in a Financial Crisis?
Former MP Baqir al-Saadi acknowledged the existence of what he described as a “financial crisis,” suggesting that adjusting the dollar exchange rate in the parallel market will be within the authority of the next government.
However, we must ask:
Is this truly a crisis?
Or is it a transition phase during reform?
The Central Bank of Iraq (CBI) has repeatedly stated:
Their monetary strategy is working.
The parallel market is being reduced.
Liquidity is being stabilized.
Structural banking reforms are ongoing.
That does not sound like panic.
It sounds like long-term restructuring.
🏛️ Who Controls the Exchange Rate?
Al-Saadi stated:
“Moving the exchange rate upwards can only be taken by the next government.”
Technically speaking:
Fiscal policy belongs to government.
Monetary policy belongs to the Central Bank.
The CBI is already:
✔ Tightening dollar distribution ✔ Enforcing ASYCUDA customs compliance ✔ Reducing parallel market distortions ✔ Strengthening digital banking systems ✔ Forcing more transactions into dinars
The battle against the parallel market is already underway.
So what exactly would the next government do differently?
This discussion is about “killing” the parallel dollar market — not triggering an overnight RV.
The gap between:
The official exchange rate
The black market rate
is what creates distortions, speculation, and financial inefficiencies.
If the CBI eliminates or significantly reduces that gap:
Confidence in the dinar increases.
Market stability improves.
Monetary sovereignty strengthens.
Conditions for future exchange flexibility improve.
First things first.
Stability precedes appreciation.
🧠 Political Promises vs. Central Bank Actions
Al-Saadi suggested that once a new government is formed, an economic committee would:
Study financial conditions
Develop objective solutions
Correct economic course
But here’s the reality:
The CBI is already implementing corrective measures.
Recent examples include:
Converting oil contractor payments from dollars to dinars
Digitizing salary payments
Enforcing customs compliance under WTO/WCO standards
Reducing cash-based parallel trade channels
Monetary reform is not waiting for political speeches.
It is already in motion.
📊 Lessons from the Past
History matters.
Previous governments had opportunities to implement strong financial reforms.
Some initiatives stalled. Some were delayed. Some were politicized.
The key takeaway for investors:
Promises do not move exchange rates. Policy execution does.
The Central Bank appears to be taking the lead in monetary stabilization.
🔥 Featured Snippet Summary
Is Iraq changing the exchange rate now? No official change has been announced. Current efforts focus on reducing the parallel market gap.
Who controls the exchange rate? The Central Bank manages monetary policy, while the government influences fiscal decisions.
Is Iraq in a financial crisis? There are financial pressures, but ongoing reforms suggest structured monetary stabilization rather than systemic collapse.
Could this lead to an RV? Eliminating the parallel market is a prerequisite step before any major exchange rate reform.
❓ Q&A Section
Q: Can the next government “raise” the dinar?
Not directly. The CBI controls monetary policy, though government stability influences economic confidence.
Q: What is the main goal right now?
Reducing the parallel market and strengthening monetary control.
Q: Why is salary pressure being discussed?
Fiscal strain and revenue restructuring are occurring during reform implementation.
Q: Is this an immediate RV situation?
No. This is structural groundwork.
🙏 A Moment of Reflection
A reader shared this reflection:
“Be still and wait…”
Regardless of personal beliefs, patience is essential in long-term economic reform.
In the article titled “ACKNOWLEDGING THE FINANCIAL CRISIS, MP SAYS CHANGING THE DOLLAR EXCHANGE RATE IS WITHIN THE PURVIEW OF THE NEXT GOVERNMENT”.
Just so you know this article is NOT about an RV like we would like to see. It is about combating the parallel market so the dinar can rise against the dollar. It might lead to the RV but first things first……
Former MP Baqir al-Saadi acknowledged on Monday (February 9, 2026) the existence of a financial crisis in Iraq, while indicating that changing (killing) the exchange rate of the dollar in the parallel market will be within the powers of the next government. Oh…. but isn’t the CBI already doing this? I would certainly not call it a “financial crisis” as the CBI has told us many times their strategy is working, just let it take time.
He added that “the past few weeks have seen many opinions put forward to address the salary crisis, including moving the exchange rate upwards, but such a step can only be taken by the next government,” noting that “the new government will form a high economic committee to study the financial and economic situation in the country and develop objective solutions.”
Al-Saadi explained that “Nouri al-Maliki, as the candidate of the Coordination Framework, placed this file among his priorities, and therefore, as soon as the government is formed, there will be important decisions to correct the course of the economic and financial dimensions.”
I will add to this article a note about who stopped the reinstatement of the Iraqi dinar back in 2012-2013. It was Nori al-Maliki the prime minister at the time. He has no financial or economic expertise and as much as he says his policies will help Iraq, if elected, nothing will happen, I assure you. He already has eight years to prove it. I also want to note that the CBI has taken the lead on controlling the parallel market as we can see from today’s news from the recent measures it has taken. There is nothing al-Maliki can do or will do that that CBI is already doing. Why didn’t he help control it in his first eight years? Oh…. but he was too worried about sectarianism and going after the Kurds. The last thing that Iraq needs to see is some bozo like al-Maliki who knows very little, if anything, about running a country, come into power again. Yes, they say he is a great statesman but what good is he if he accomplishes nothing while in office? Yes, nothing but a good bullshitter.
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We pray-
A nice prayer from one of my blog followers. Thank You!
“Be still, wait on the Lord, my modern David will slay the so-called giant of Islam. It will fall they are already begging for mercy, but it will not come as they have sinned so greatly with their blasphemy, disregarded all warnings for the Lord and now HIS WRATH WILL CONSUME ALL WHO CURSE THE CHOSEN!!
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Their words not mine…..No Rumors, No Hype, No Opinions ,,,,,
DOLLARS, POLITICS, AND FACTIONS: PRESSURE POINTS SURROUND THE ANTICIPATED CABINET.
Baghdad/Al-Masalla: According to sources contacted by Al-Masalla, the coordination framework must act today under the pressure of a delicate political equation that seeks to spare Iraq American anger that could quickly turn into economic and political sanctions, in exchange for showing a higher degree of rationality in the process of forming the next government, at a time when unannounced signals are intensifying regarding red lines related to the shape of the cabinet and its balances.
In Baghdad, political leaks and diplomatic readings converge to confirm that any government perceived as being close to armed factions will quickly lose international cover. This puts the forces involved in the coordination framework to the test of managing influence without provoking external partners, especially with an economy that depends on oil revenues for more than 85 percent of its income and a financial system that is highly sensitive to sanctions.
In parallel, there is growing concern within political circles that any potential American escalation could directly affect the dollar, the exchange rate, and import activity, which opens the door to social unrest that is difficult to contain, at a time when state institutions are still suffering from fragility that has accumulated over the years.
On social media, a political analyst on the X platform said, “The messages are clear to anyone who wants to read them. Washington is not compromising on the form of government this time, and any disregard could bring back the scenario of financial pressure.” Conversely, a political activist wrote on Facebook, “Iraq cannot tolerate a Saddam-era government; pragmatism has become a necessity, not an option.”
Within the coordination framework, unannounced assessments speak of efforts to present a government with a calmer facade, while reducing the political appearance of the factions, in an attempt to buy time and avoid a direct confrontation, amid a growing realization that the phase of gray settlements is nearing its end.
It appears that Iraq is at a pivotal moment, where the form of government becomes a message in itself, either reassuring the outside world and providing relative internal stability, or a costly gamble that could return the country to a cycle of pressure and isolation.
Economic expert Nabil Al-Marsoumi argues that trade transactions have dropped and customs revenues declined — including a reported 71 billion dinar decrease in January compared to prior months.
Customs duties were raised between:
5%
10%
15%
Up to 30%
Covering:
99 tariff chapters
Approximately 16,400 customs items
That’s a massive structural shift.
But here’s the key question:
Why did trade drop so sharply?
🔎 The Real Reason Trade “Declined”
ASYCUDA enforces:
Verified documentation
Digitized customs processing
Legitimate import valuation
International trade compliance
Under the old system:
Fake invoices were common.
Imports were overstated.
Dollars were siphoned via currency auctions.
Parallel market activity thrived.
When fake trade disappears, reported trade volume drops.
That does not mean the economy shrank.
It means fraud shrank.
Short-term shock? Yes.
Long-term transparency? Absolutely.
🌍 WTO & WCO Compliance — The Bigger Picture
New customs valuation mechanisms were adopted under:
Iraqi Customs Law No. 23 (amended)
Cabinet Resolution No. 569 (2025)
World Customs Organization (WCO) standards
World Trade Organization (WTO) rules
Did you catch that?
WCO. WTO.
If Iraq wants full WTO accession and global trade integration, it must comply with international standards.
You cannot enter global trade systems with a corrupt customs regime.
Change is painful — but necessary.
💰 Widespread Anger Over Salary Deductions
Another headline:
“Widespread Anger in Iraq Over Large Sums Deducted from Salaries of Employees and Retirees”
Employees and retirees noticed automatic deductions after electronic salary deposits.
What’s happening?
The banking sector is being modernized.
Key changes include:
Mandatory electronic salary payments
Reduced cash withdrawals
Stabilized money supply
Automatic tax deductions
This mirrors Western systems.
When salaries go through formal banking channels:
Taxes become traceable
Government revenue improves
Informal cash leakage decreases
Again — shock at change.
But structurally, this strengthens fiscal governance.
🛢️ From Dollar to Dinar — The CBI’s Bold Move
Now here’s the BIG ONE.
The Central Bank of Iraq directed that oil company contractors be paid in dinars instead of U.S. dollars.
This affects:
Over 200 Iraqi companies
More than 50,000 workers
Contracts previously denominated in USD
Critics warn:
Financial losses
Operational disruptions
Possible layoffs
Reduced foreign investment
But what is the CBI really doing?
💵 Killing the Parallel Market — For Good?
The dollar has been the parallel market’s oxygen.
Every hole in the system allowed:
Dollar leakage
Black market exchange manipulation
Smuggling to sanctioned entities
Pressure on the dinar’s value
Now combine:
✔ ASYCUDA closing fake trade channels ✔ Customs reform aligned with WTO ✔ Salary digitization ✔ Reduction of physical cash ✔ Oil contractors paid in dinars
This is a coordinated assault on the parallel market.
Not random.
Strategic.
⚖️ The Official vs Parallel Rate Gap
Economists point out that companies suffer because:
Contracts are in dollars
Payments now in dinars
Parallel rate differs from official rate
But here’s the counterpoint:
What if the CBI does not intend for the parallel market to survive much longer?
If the black market disappears, the rate gap disappears.
And if the rate gap disappears, the financial burden argument collapses.
🤔 Is This Preparing for Reinstatement?
Let’s ask the logical question.
Why would the CBI:
Remove dinar from circulation?
Digitize salary flows?
Tighten customs?
Eliminate auction abuse?
Shift oil payments into dinars?
If the dinar were to remain permanently weak and dependent on dollars?
These reforms align with:
Monetary sovereignty
Liquidity control
Currency strengthening
International integration
If the dinar becomes fully international, contractor payment issues vanish.
Banks globally would accept IQD through formal channels.
The dependency on street dollar exchange would end.
Coincidence?
Or preparation?
🔥 Featured Snippet Summary
Why is ASYCUDA controversial? Because it eliminates fake trade transactions, causing reported trade and customs revenues to drop short term.
Why are salaries being deducted automatically? Electronic banking reforms now allow structured tax deductions and fiscal transparency.
Why is the CBI paying oil contractors in dinars? To reduce dollar leakage and weaken the parallel market.
Is Iraq killing the parallel market? Recent reforms strongly indicate that is the objective.
❓ Q&A Section
Q: Is ASYCUDA harming the economy?
Short term disruption exists, but long-term transparency and compliance strengthen the economy.
Q: Why are traders protesting?
Because stricter enforcement eliminates profit from parallel dollar operations.
Q: Are salary deductions permanent?
Likely yes — electronic banking modernization mirrors global tax systems.
Q: Does paying oil contractors in dinars signal RV?
Not necessarily — but it signals serious monetary restructuring.
📊 Connecting the Dots
Reform areas moving simultaneously:
Customs enforcement
Electronic banking
Currency supply tightening
Oil sector payment restructuring
Parallel market pressure
This is what structural transformation looks like.
It is noisy. It is controversial. It is painful.
But it builds monetary credibility.
🚦 Final Thought: To Kill or Not to Kill the Parallel Market?
That is no longer the question.
The CBI appears to have chosen.
The parallel market must shrink — or die.
Because without eliminating black market distortions:
Then yet another article on this subject matter titled “STATISTICS SHOW THAT THE ASYCUDA SYSTEM IS HARMING MORE THAN ONE MILLION IRAQI TRADERS, WITH LOSSES AMOUNTING TO BILLIONS”. Here we go again….. “Economic expert Nabil Al-Marsoumi stated on Saturday that the “ASYCUDA” system implemented by the Iraqi government has caused a decrease in trade transactions and a decline in customs revenues in the country, calling for dialogue sessions with chambers of commerce to reach appropriate solutions after the deterioration of the economic situation as a result of the application of the customs tariff.”
So, we see in Iraq as also in the US, there is outcry about customs and tariffs. Customs and tariffs have always been a longstanding traditional source of government revenue streams and effects businesses not the individual and moves the tax burden from the individual to businesses. Customs and Tariffs make trade fair. It equalizes trade if done properly. Yes, change is hard when you never had fair customs and tariffs before. So, there is going to be a natural shock when implemented. This shock will have to be absorbed over time.
I quote from the article “He added that this activity is currently suffering from the repercussions of the ASYCUDA system, and from the application of the customs tariff, which, according to official information, has led to a halving of Iraq’s trade transactions with the outside world, and to significant losses for traders and the government, whose customs revenues also decreased in January by 71 billion dinars compared to the months that preceded it.”
It is fair to say that through the ASYCUDA system, the Iraqi government raised customs duties by percentages ranging between 5% and 30%, distributed across brackets starting from 5%, 10% and 15%, up to the maximum limit of 30%.
These ratios cover the entire customs tariff register consisting of 99 chapters containing approximately 16,400 customs items, which are the items adopted globally in trade.
A few days ago, the General Authority of Customs in the Ministry of Finance issued a directive to adopt a reduction rate of 25% on the average import values recorded in the ASYCUDA system.
Then another article on this subject titled “OFFICIALLY… NEW MECHANISMS FOR CALCULATING THE CUSTOMS VALUE OF IMPORTED GOODS”. I quote from the article – “The General Authority of Customs announced today, Monday (February 9, 2026), the adoption of new mechanisms for calculating the customs value of imported goods, in implementation of the directives of the Prime Minister, and based on the provisions of the Customs Law No. (23) of 1984 amended, and paragraph (9) of Cabinet Resolution No. (569) of 2025, and in accordance with the approved international rules and standards.”
It is worth noting that the Valuation Department in the Authority is responsible for receiving requests to determine or amend the customs value recorded in the records, accompanied by official supporting documents, and they will be decided upon within a period not exceeding three working days, based on the applicable law and the international agreements and rules adopted by the World Customs Organization and the World Trade Organization. Opps….did it say WCO and WTO? Do you see how Iraq must conform to these international practices if they are to have full accession to the WTO thus access to global trade? But businesses in Iraq don’t see the bigger picture and only care about their profit sheet. They don’t understand the change that Iraq must go through. I will add that this change is going to be much more painful than it had to be unless they reinstate the Iraq dinar and other middle eastern currencies and level out the playing field. Who the hell wants a 1/6 of a penny currency?
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What else is in the news?
I have to explain these next few articles, one is titled “WIDESPREAD ANGER IN IRAQ OVER LARGE SUMS DEDUCTED FROM THE SALARIES OF EMPLOYEES AND RETIREES”. In it we read that a number of employees and retirees were surprised, after receiving their monthly salaries, to find large amounts deducted, which sparked a state of discontent and concern in the employment and retirement circles.
As investors watching Iraq we all should realize that effort to bring the Irag banking sector into modern times. The new taxation structure was coming. When the CBI forced electronic banking not only did it move all this money into the banks mandating deposits into accounts as the means of payment, only allowing slow cash withdrawals via ATMs. This action was stabilizing the money supply. It was already making way for the reduction in the money supply to meet the future rate jump. Remember if you take money out of the system what remains is worth more.
But it also sets the stage to allow government automatic deduction of payment of certain taxes. Just like employers or government offices do it in the west today. No difference. Why such an outcry then? It is a change….There is another way to view what is happening to Iraq in this regard. Iraq is slowly moving to a private sector run economy, salaries paid by private companies away from the Saddam Hussien era of a socialistic system. Soon these government salaries of billions each month, will also be transferred to the private sector who will pay wages rather than the government. This is all coming and its not too far off. I only hope this current election cycle does not disturb the over all momentum in this direction. Again, change is hard!
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To Kill or not to Kill the parallel market, that is the question?
In a couple more articles in the news we learn of yet another strategy taking hold from the CBI to combat the parallel market. Please take a look at the articles titled
“FROM DOLLAR TO DINAR… EXCHANGE RATE POLICY CONFUSES OIL COMPANIES AND THREATENS THEIR EMPLOYEES!” and
“AL-MARSOUMI WARNS: CENTRAL BANK DECISIONS THREATEN MORE THAN 50,000 WORKERS WITH LOSSES AND MASS LAYOFFS”.
Yes, change is hard!
In this news we learn that The Central Bank of Iraq’s decision to convert payments to contractors working with oil companies from US dollars to Iraqi dinars. This has sparked widespread controversy in economic circles. This comes amid warnings of potential financial and operational repercussions for subcontractors, the labor market, and the stability of the oil sector. Experts believe that continuing with this mechanism could impose additional financial burdens on companies that rely on dollars for their transactions, impacting their operational capacity and business continuity.
When I learned of this news I said WOW! WOW! and WOW!. The CBI finally did it!
Do you know how amazing this news is and what it really means? I see that no other intel gurus out there even address the significance of this move by the CBI. The CBI is essentially creating the change over from the dollar to the dinar in payments now even to outside companies. These dollars have been a pain-in-the-ass for the CBI to control.
This change is going to be hard as sources are all set to receive dollars not dinars. But change is hard! Remember the national currency of Iraq is the dinar not dollars and the dollars have been the problem all along as these dollars get into the parallel market and shift the market to influence the price of the dinar. It is time to switch back to dinars.
How can the CBI ever get control of the official rate of the dinar unless they end these holes to which the dollar was passing through to the black market. So, along with the full implementation of the ASYCUDA system we see two major moves to sew up the parallel market. Yes, these money traders have been warned many times.
So, there will be an initial shock, as usual since this is a big move by the CBI.
Economic expert Nabil al-Marsoumi stated in a tweet that “more than 200 Iraqi companies contracted with oil licensing companies, employing over 50,000 Iraqi workers, are threatened with significant financial losses and layoffs due to the Central Bank’s directive to disburse their payments in dinars at the official rate—even though their contracts and expenses are denominated in dollars.”
Can this also mean that a reinstatement of the dinar is coming soon? Could this be the motive too for the CBI making this move now. Just saying….. if the dinar does go international this problem with the contractors will just go away. All these negative issues by paying in dinar as explained in the articles will simply vanish.
Am I missing something here?
For his part, energy expert Ahmed Sabah said that “converting company dues from dollars to dinars may lead to the gradual exclusion of some foreign companies, while focusing on companies that accept dinar transactions.” He explained that “many Western companies rely on external supply chains that require payment in dollars to secure equipment and services.”
Oh- then will this force banks around the world to accept dinar in order to convert them to dollars, through the proper banking channels and not illegal money launders that drive down the rate of the dinar?
He added that “this measure is not sustainable in the long term, especially given that the current government is a caretaker government, which reduces the chances of implementing decisions with long-term strategic impact.” He predicted that “major foreign companies will refrain from expanding or entering into new contracts if this mechanism continues,” considering that “the decision may be temporary and subject to change if negative effects emerge on the investment climate or the pace of work in the fields.”
Strengthening the Dinar or Market Losses? For his part, economist Dirgham Muhammad Ali believes that “attempts to curb the parallel dollar market have prompted the Central Bank to take measures to bolster confidence in the dinar,” but he noted that these measures “were not fair given the continued gap between the official and parallel exchange rates.”
He pointed out that the losses result from the large difference between the official and parallel exchange rates of the dollar against the dinar, noting that companies’ contracts and operating expenses are done in dollars, which exacerbates the financial burdens and threatens the continuity of their work. But what these comments in the article do not consider is that the CBI does not expect the parallel market to exist in the near future and in fact this change to payment in dinar is part of the efforts to kill the black market.
The Central Bank of Iraq must first be able to control the parallel market if not kill it altogether. This is purely what these move are all about. It will only build confidence in the dinar. Yes, change is hard!
