Baghdad and Erbil unify customs system to control markets and protect the value of the dinar
The Iraqi General Authority of Customs announced on Thursday tangible progress in economic relations between the federal government and the Kurdistan Regional Government, confirming the region's response to the initiative to unify customs tariffs and implement federal decisions, in a strategic step aimed at controlling local markets, combating money laundering, and maintaining the stability of the value of foreign currency.
In a press statement, the Director General of the General Authority of Customs, Samer Qasim, revealed that "the Kurdistan Region has actually begun to respond to the issue of unifying customs tariffs with the federal ports," noting that the steps to comply with Resolution No. (597) and the customs instructions issued by Baghdad have entered into force.
Qasim explained that "the past two days witnessed a series of meetings in the capital, Baghdad, which resulted in initial agreements and practical understandings to begin unifying the customs system," considering this step a fundamental pillar for resolving many outstanding files and issues between the two sides.
The Director General of Customs emphasized that traders operating outside the customs and tax system will be the "most affected" by these measures. He added, "Working with the ASYCUDA electronic system requires traders to possess a valid import ID and tax ID. Accordingly, no financial transfers will be allowed to pass through this unified digital system."
Qassem explained that the tariff unification process will not include all goods in the first phase, but will focus on the "most imported goods" that cause large amounts of dollars to be drained abroad.
The Iraqi official concluded his statement by noting that the objectives of this coordination are “to regulate import operations, protect the Central Bank’s hard currency reserves, prevent the entry of low-quality goods, and provide a safe environment to protect the national product through a clear and comprehensive national customs policy.” link
Recent developments in Iraq are drawing major attention from currency watchers and global investors. Statements attributed to MarkZ [via PDK] highlight two key themes shaping today’s dinar narrative:
Iraq’s firm stance on digitizing customs and imports through ASYSCUDA.
The Central Bank of Iraq rejecting speculation about lowering the value of the Iraqi dinar.
Let’s break down what this means, why it matters, and how it could impact the future outlook of the Iraqi dinar.
Iraq’s Digital Customs Reform: The ASYSCUDA Decision
The state administrative coalition has supported the ASYSCUDA implementation decision — a move aimed at blocking “political investment through chaos” and preventing bribery in customs processes.
ASYSCUDA (Automated System for Customs Data) is a digital customs management system designed to:
Digitize import/export documentation
Increase transparency
Reduce corruption
Improve revenue tracking
Prevent off-the-books transactions
By forcing everything into a digital platform, Iraqi authorities can track revenue streams more effectively and reduce opportunities for corruption.
This reform directly strengthens Iraq’s financial credibility and supports long-term economic stability — a key pillar for any currency seeking international confidence.
CBI Responds to Dinar Devaluation Rumors
In a recent article titled “Iraqi dinar speculation misplaced: CBI boss”, the head of the Central Bank of Iraq, Ali Al-Alaq, addressed growing speculation about a possible reduction in the dinar’s value.
His message was clear:
The Central Bank is not planning to reduce the value of the Iraqi dinar.
Iraq holds strong foreign currency reserves.
Iraq holds substantial gold reserves.
The country can back approximately 140% of its currency supply.
That level of reserve backing is significant. In monetary terms, it suggests stability rather than weakness.
Alaq emphasized that the speculation is misplaced and that Iraq does not need to devalue its currency to address its economic situation.
Why Strong Reserves Matter
When a central bank can back more than 100% of its currency in reserves, it sends a powerful message to global markets:
Financial resilience
Reduced risk of currency collapse
Increased investor confidence
Greater flexibility in monetary policy
For comparison, most central banks do not publicly claim backing ratios above 100%.
If Iraq can truly support 140% of its currency in reserves, this implies a strong defensive position — not one preparing for devaluation.
Historical Comparisons: Kuwait and China
Observers have drawn comparisons to pre-revaluation periods in:
Kuwait
China
Before past currency adjustments, rumors of instability circulated widely. In those cases, speculation preceded significant policy moves.
While no official revaluation has been announced in Iraq, some analysts argue that strong denials and stable reserve positions often precede strategic monetary adjustments — not collapses.
It’s important to remain grounded in official data and statements while understanding historical patterns.
How Digital Reform Supports Currency Strength
The ASYSCUDA implementation aligns with broader economic reforms designed to:
Modernize Iraq’s financial infrastructure
Increase government revenue collection
Combat corruption
Improve compliance with international standards
A stronger customs system increases non-oil revenue — a critical goal for Iraq’s economic diversification.
When a country strengthens revenue tracking and reduces corruption leakage, it stabilizes its fiscal position. That, in turn, strengthens currency fundamentals.
What This Means for Iraqi Dinar Watchers
From a macroeconomic standpoint:
Iraq is modernizing its customs systems.
The Central Bank is publicly rejecting devaluation rumors.
Foreign reserves and gold holdings remain strong.
Anti-corruption measures are being digitized.
This combination signals structural strengthening rather than currency weakening.
However, investors should always exercise caution, conduct independent research, and understand that currency markets are influenced by multiple global and domestic factors.
Featured Snippet: Key Takeaways
Is Iraq planning to devalue the dinar? No. The Central Bank of Iraq has stated it is not planning to reduce the value of the dinar.
What is ASYSCUDA?
A digital customs system that increases transparency, reduces corruption, and improves revenue tracking.
Does Iraq have strong reserves? According to CBI leadership, Iraq can back approximately 140% of its currency with reserves and gold.
Q&A Section
Q1: Why is digitizing customs important for currency stability?
Digitizing customs increases transparency, reduces corruption, and ensures accurate revenue collection. Stronger government revenue improves fiscal health, which supports currency stability.
Q2: What does 140% reserve backing mean?
It means the country claims to hold reserves and gold equivalent to 140% of the currency supply — suggesting strong financial coverage.
Q3: Are rumors of devaluation common before major currency moves?
Historically, currency markets often experience speculation before policy adjustments. However, speculation alone does not confirm future action.
Q4: Is there an official revaluation announcement?
No official revaluation has been announced by the Central Bank of Iraq.
Final Thoughts
Iraq appears focused on structural reform, digital modernization, and maintaining monetary stability. With firm public statements from the Central Bank and ongoing anti-corruption measures through digital customs systems, the country is signaling strength rather than weakness.
As always, stay informed, monitor official statements, and analyze economic fundamentals carefully.
“The state administrative coalition supported the ASYSCUDA decision. Blocking the path of “political investment through chaos” and prevented buying through bribery”
They are sticking to their guns on customs and imports. By forcing everything to be digital…it's easy to track. Stops the money going to corrupt people
Alaq is saying to stop speculating because we are not going to reduce the value of the dinar. They are going to continue to hold it strong. They have the reserves and they have the gold …they do not need to lower the value. They can back 140% of their currency. Remember – these were the kind of rumors in Kuwait just before they revalued. And the same rumors in China before they revalued.
IRAQ IS PREPARING TO EXPORT ITS OIL VIA TÜRKIYE, JORDAN, EGYPT, AND SAUDI ARABIA… SYRIA IS ON HOLD
The Ministry of Foreign Affairs announced on Thursday plans for external oil connections with four countries: Turkey, Jordan, Egypt, and Saudi Arabia. It noted that work on the Kirkuk-Banias pipeline has been postponed due to the situation in Syria, as the ministry explained that the security situation in Syria prevents Iraq from taking actual steps to restore the pipeline.
The Undersecretary of the Ministry, Hisham Al-Alawi, said in a statement to the official agency, which was followed by the 964 network
, that “work on the Kirkuk-Banias pipeline has been postponed due to the security situation in Syria, which prevents us from taking actual steps in this direction,” indicating that “Iraq has several alternatives for external oil connections, including through Turkey and Jordan to Egypt, in addition to Saudi Arabia.”
He added that “the Iraqi government has worked over the past years to rehabilitate the oil export pipeline through Turkey, and there are talks with Jordan and Egypt,” noting that “Iraq has adopted the project to link the oil fields through Haditha, and discussions were about implementing a project to complete this link through Jordan to Egypt, but work on that has not started.”
MNT GOAT: Can Iraq End the Election Deadlock Soon?
Iraq remains stuck in a political deadlock, centered on whether former Prime Minister Nouri al-Maliki returns to power. His bid has deepened divisions within the Shiite Coordination Framework and drawn a stern warning from Washington regarding U.S.-Iraq relations.
Parliament has failed twice to convene sessions to elect a president and designate a prime minister, prolonging the government formation crisis.
The Maliki Factor in Political Paralysis
Disagreement over Maliki’s candidacy is the main cause of deadlock, not Kurdish infighting.
Sources indicate three proposed scenarios to end the standoff:
Persuade Maliki to withdraw in favor of a compromise candidate.
Move ahead with Maliki despite opposition (unlikely).
Extend the caretaker government while talks continue.
MNT GOAT warns that these scenarios are largely conversation pieces, with the real solution likely being the continuation of Mohammed Shia' Al Sudani for another term. Attempts to extend the caretaker government have been deemed unconstitutional, according to experts, highlighting the importance of a permanent solution to maintain political stability.
Central Bank of Iraq (CBI) Advances Banking Reforms
Despite political deadlock, the independent Central Bank of Iraq continues to implement major reforms:
Ali Al-Alaq, CBI Governor, revealed a “huge plan” to modernize Iraq’s banking sector over the coming years.
Citizens are urged not to rush to the market, despite temporary unofficial dollar price spikes.
The CBI maintains strong foreign reserves, ensuring the Iraqi dinar remains stable.
Key Initiatives:
Expansion of digital finance
Development of electronic payment systems (E-Passula, My Account projects)
Strengthening cooperation with Kurdistan Region
Improving transparency, efficiency, and public trust
MNT GOAT notes that progress continues in the banking sector despite election stalemates, signaling a gradual strengthening of Iraq’s financial infrastructure.
Kurdistan Region Cooperation
Masrour Barzani praised CBI reforms during meetings with Ali Al-Alaq and banking/digital wallet representatives.
Regional collaboration emphasizes active coordination between Baghdad and Erbil, ensuring reforms are implemented across Iraq.
SOMO’s Strategic Shift to Global Oil Trading
Iraq’s Oil Marketing Company (SOMO) is transitioning from traditional crude sales to global oil trading:
Objective: maximize revenue and take advantage of global market fluctuations.
Approach: proactively seek buyers and negotiate pricing strategies beyond traditional markets.
Potential Impact: could introduce other currencies for transactions and influence oil revenue streams.
MNT GOAT highlights that this is a strategic economic step, potentially strengthening Iraq’s fiscal position alongside CBI reforms.
Q&A Section
❓ Why is Iraq stuck in an election deadlock?
Disagreement over Nouri al-Maliki’s return as prime minister has blocked parliamentary sessions to elect a president and form a government.
❓ Are proposals to extend al-Sudani’s term constitutional?
No. Experts confirm that the 2005 Iraqi Constitution does not allow extending a caretaker government beyond its term.
❓ What banking reforms is the CBI implementing?
Digital finance expansion
Electronic payment system rollout (E-Passula, My Account)
Strengthened Baghdad-Erbil cooperation
Maintaining dinar stability and foreign reserves
❓ How is SOMO changing its oil strategy?
SOMO is moving toward global oil trading, negotiating prices and buyers internationally, aiming to maximize revenues rather than relying solely on traditional buyers.
Featured Snippet Summary
Iraq’s election deadlock is primarily caused by Nouri al-Maliki’s potential return.
Proposals to extend caretaker government are unconstitutional.
The CBI continues banking reforms under Ali Al-Alaq, maintaining dinar stability.
Kurdistan Region collaborates closely with Baghdad for sector modernization.
SOMO shifts to global oil trading, maximizing revenue and expanding market reach.
Stay Updated on Iraq Dinar & Political Developments
In the recent article titled “IRAQ’S MALIKI STANDOFF: THREE EXITS, NO EASY WAY OUT” Iraq’s political deadlock now turns on a single question: does Nouri al-Maliki come back? His bid to return to power has pushed the government formation crisis into a more volatile phase, deepening divisions inside the Shiite Coordination Framework and drawing an unusually blunt warning from Washington.
For the second time, parliament failed to convene a session to elect a president and designate a prime minister. This time, the collapse was driven not by Kurdish infighting, but by disagreement over Maliki’s candidacy, according to sources inside the Coordination Framework, the Shiite coalition entitled to nominate the next government. It has been nearly two weeks already after President Donald Trump warned that Maliki’s return would have consequences for U.S.-Iraq relations, Shiite leaders remain deadlocked.
A Framework official told Alhurra that three scenarios are now under discussion to end the deadlock. Please go read the article in full in the Articles Section of today’s Newsletter for details of each of these solutions. Note that I believe none of these scenarios will work and are just conversation and not real solutions. There is in FACT only one solution and that is to give al-Sudani yet another term. I believe that in the end he will be nominated and appointed for yet another term.
I find it ironic that they are thinking about an option to extend al-Sudani term for another year, giving them time to work out solutions to the election deadlock. But is this even doable? Is it constitutional? In the article titled “OUTSIDE THE CONSTITUTION”: AN EXPERT REFUTES THE PROPOSAL TO EXTEND THE CARETAKER GOVERNMENT” a source within the coordination framework revealed to Shafaq News Agency that caretaker Prime Minister Mohammed Shia al-Sudani had received a proposal to extend his government’s term for one year with specific powers, with the aim of finding a way out of the political deadlock. Aa legal expert confirmed on Thursday that “the 2005 Iraqi constitution contains no provision allowing the extension of a caretaker government”, considering any attempt in this direction to be a departure from the principle of the rotation of power.
As investors we do not want this extension as we want a permanent solution and the political side to be able to quickly work these issue out. This is called ‘stability’. It is not bad to have a deadlock but for how long? This shows the democratic principles at work.
What else is in the Iraqi news?
We all should know that even during the election deadlock and amidst all the ongoing saga associated with it, the independent Central Bank is still moving forward with reforms in the background. Today I have some more very good news in this direction.
In article titled “IRAQ HAS ‘HUGE PLAN’ TO TRANSFORM BANKING SECTOR, SAYS CBI GOVERNOR” we read that Ali al-Alaq told The New Region that citizens must not“rush to the market” amid a rise in unofficial dollar prices, insisting that the Central Bank is maintaining foreign reserves “at a very good level.”
ERBIL, Kurdistan Region of Iraq – Central Bank of Iraq (CBI) Governor Ali al-Alaq told The New Region on Wednesday that Baghdad has a “huge plan” to change the banking sector in the next few years, reassuring the Iraqi population that the value of the Iraqi dinar compared to the US dollar is under control. Alaq urged the Iraqi people to “calm down” and not to “rush to the market,” amid a recent soaring rise in unofficial dollar prices, going from around 1,420 dinars per $1 in the black market to 1,570, before settling around 1,500. In comparison, the CBI has set the value at 1,300 dinars per $1.
This week, the CBI governor and the prime minister al-Sudani met with the head of the KRG Barzani. Based on explaining this ‘huge’ banking reform plan and the reforms already accomplished the KRG praised the CBI work. We read about this meeting in the article titled “MASROUR BARZANI PRAISES AL-ALAQ’S MEASURES TO IMPROVE THE BANKING SYSTEM IN IRAQ”
On Tuesday, the Prime Minister of the Kurdistan Region, Masrour Barzani, held an expanded meeting with the Governor of the Central Bank of Iraq, Ali Al-Alaq, and officials and representatives of a number of banks and digital wallet companies participating in the (My Account) and (E-Passula) projects. The Prime Minister expressed his gratitude to the Governor of the Central Bank and his team for the facilities, great cooperation, and high coordination with the regional government, and for their support of the reform steps in the field of developing the banking sector, praising the reforms led by the Governor of the Central Bank with the aim of activating and improving the banking system throughout Iraq.
This week there was also more good news (big news) about increased projected oil revenues and strategic moves in this direction. We can read the news in article titled “SOMO IS MOVING TOWARDS GLOBAL OIL TRADING”. The Iraqi Oil Marketing Company (SOMO) is moving towards a qualitative shift in its operations, from simply selling crude oil through traditional outlets to entering the field of trading in global oil markets. The company’s management described this move as aiming to maximize revenues and seize opportunities in a rapidly fluctuating market, while oil experts warned of the risks of this step if the appropriate institutional and legal environment is not prepared for it.
The Director General of the Oil Marketing Company, Ali Nizar Al-Shatri, told Al-Sabah that the company is currently studying mechanisms for transitioning from the traditional sales model to a trading model, in line with Iraq’s economic interests, noting that this approach comes within a vision aimed at maximizing oil revenues and not limiting marketing operations to Iraqi ports only.
In other words, as I see it, they are no long going to just receive customers who need oil but are going to reach out and find customers who need the oil and the products generated from it. They are going to reach out globally instead of just sitting waiting for business to come to them. This could have ramifications of using other currencies to purchase the oil and bargaining on price to get the highest price available based on local demands not just oil market prices.
The Iraqi Oil Marketing Company (SOMO) is moving towards a qualitative shift in its operations, from simply selling crude oil through traditional outlets to entering the field of trading in global oil markets. The company’s management described this move as aiming to maximize revenues and seize opportunities in a rapidly fluctuating market, while oil experts warned of the risks of this step if the appropriate institutional and legal environment is not prepared for it.
The Director General of the Oil Marketing Company, Ali Nizar Al-Shatri, told Al-Sabah that the company is currently studying mechanisms for transitioning from the traditional sales model to a trading model, in line with Iraq’s economic interests, noting that this approach comes within a vision aimed at maximizing oil revenues and not limiting marketing operations to Iraqi ports only.
Al-Shatri explained that the company seeks to enter into positive partnerships with reputable international companies that have extensive experience in the field of oil trading, indicating that the latest of these moves was the negotiation with the global company “ExxonMobil”, to enter into an advanced commercial partnership that contributes to developing the staff of “SOMO”, and building a marketing and commercial arm capable of interacting with the changes of the global market and seizing the available opportunities.
He pointed out that global oil markets suffer from clear weaknesses in some of their joints, but SOMO is working to invest in the available strengths through these partnerships, enabling it to move from the role of seller to a more effective player in the international oil trading system.
Conversely, experts believe that this shift, despite its importance, requires extreme caution and well-considered measures. Oil expert Yahya Nasser Al-Aqabi emphasized that SOMO’s transition from traditional sales to trading in global markets is not merely an administrative step, but a sovereign decision with significant implications for state revenues and financial sustainability.
Al-Aqabi explained that the current sales model adopted by SOMO is based on selling oil from Iraqi ports at prices linked to global indicators, with relatively limited exposure to risks, while entering the field of trading represents a completely different activity, requiring independent institutions with strict systems and expert management capable of dealing with price fluctuations and market risks.
He added that SOMO, as a company affiliated with the Ministry of Oil, may not currently possess all the institutional capabilities necessary to undertake this type of complex activity, warning that any ill-considered step could be fraught with risks. He cited the experiences of oil-producing countries and national oil companies belonging to OPEC member states, where success was achieved when independent commercial arms were established under clear oversight and professional management.
Al-Aqabi stressed the need for any such transformation to be gradual and deliberate, starting with limited steps whose results are carefully evaluated, before moving to a wider scope. He pointed out that any serious project in this direction needs financial and administrative independence, and a complete separation between political decision-making and commercial activity, warning that ambitions not supported by building strong institutions may turn from a tool for maximizing revenues into a gateway to losses.
For his part, oil expert Kovind Shirwani warned of the risks of SOMO entering the oil speculation market, especially with regard to forward contracts, considering that this step could constitute a major gamble for a government company suffering from red tape and bureaucracy.
Sherwani explained that speculative activity is mostly suitable for private trading companies, or speculators who have high flexibility in decision-making, even if they do not have great financial efficiency, but the entry of a large government institution like “SOMO” into this field requires double caution, especially in light of the current indicators that point to a relative weakness in the global oil market.
He stressed that any move towards trading must be preceded by comprehensive preparation and a careful study of potential risks, in order to avoid exposing oil revenues, which form the backbone of the Iraqi budget, to unforeseen fluctuations.
While this step represents a legitimate ambition to maximize state resources, its success remains contingent on Iraq’s ability to build flexible, independent oil institutions governed by strict governance systems that ensure revenue protection and financial sustainability, away from reckless adventures.
The dollar exchange rate at the Central Bank is fixed and will not change.
Fluctuations in the parallel market are caused by some traders seeking dollars outside official channels.
The CBI continues to inject dollars into the system to meet legitimate demand.
There is no official currency market outside the Central Bank; all other transactions are considered black market or unofficial.
Al-Alaq emphasized:
“The price set by the Central Bank for the US dollar is fixed and does not change, but the developments in import mechanisms have prompted some traders to turn to the black market to buy dollars. These traders will soon return to official channels.”
Why the Parallel Market Spikes Occur
MNT GOAT explains that temporary fluctuations are orchestrated “hiccups” rather than signs of systemic instability:
The CBI controls the exchange rate with a 2% allowable fluctuation around the official rate (e.g., 1320 ± 26 dinars).
Parallel market spikes are short-lived and often triggered by transitional CBI policies, not external shocks.
Policies are rolled out gradually to prevent sudden crashes or destabilization.
From Dollar to Dinar: Recent CBI Policy Shift
The CBI is slowly reducing reliance on the dollar, particularly in payments to contractors in the oil sector:
Payments to oil company contractors are being converted from USD to dinar.
This major policy change will have long-term ripple effects on the economy.
Short-term “hiccups” in the parallel market are expected and managed.
MNT GOAT reassures readers that ample reserves and gold backing exist to prevent crashes or devaluation during these transitions.
Iranian Influence & Devaluation Rumors
Some reports suggest Iran-backed political actors in Iraq are promoting devaluation to exploit financial loopholes.
MNT GOAT warns:
Attempts to push for a large devaluation are illogical
and contrary to the CBI’s monetary policy.
Massive shifts in the currency rate could harm Iraq’s economic recovery rather than solve liquidity issues.
Knee-jerk reactions to minor market hiccups only fuel instability, benefiting black-market traders.
Q&A Section
❓ Is the Iraqi dinar being devalued?
No. The Central Bank of Iraq has confirmed that the official exchange rate remains fixed and stable.
❓ Why does the parallel market fluctuate?
Parallel market spikes are caused by traders bypassing official channels and are short-term, unofficial phenomena.
❓ Does the CBI have enough reserves?
Yes. The CBI has sufficient gold and foreign currency reserves to support the dinar and prevent market crashes.
❓ How is the CBI reducing reliance on the dollar?
Recent policies convert payments to contractors in the oil sector from USD to Iraqi dinars, gradually transitioning the economy while preventing destabilization.
Featured Snippet Summary (Google Discover Ready)
CBI Governor Ali Al-Alaq confirms no dinar devaluation.
Dollar exchange rate is fixed and stable.
Parallel market fluctuations are temporary and due to trader activity.
The CBI has
ample reserves and gold backing the dinar.
Gradual policies transition Iraq from USD to dinar payments to strengthen the domestic currency.
What does the CBI have to say about all this talk of a massive devaluation of the Iraqi dinar?
As this last article about the massive devaluation just was published, this next article came out quickly from the CBI and is titled “IMPORTANT CLARIFICATION FROM THE CENTRAL BANK OF IRAQ REGARDING THE DOLLAR”.The Governor of the Central Bank of Iraq, Ali Al-Alaq, confirmed on Tuesday that the exchange rate of the dollar is stable and will not change, noting that the Central Bank does not suffer from any problem with gold and foreign currency reserves, and that they are continuing to inject dollars .
Then another article to back up this first one titled “CENTRAL BANK GOVERNOR: THE DOLLAR EXCHANGE RATE IS FIXED AND WILL NOT CHANGE”.The Governor of the Central Bank of Iraq, Ali Al-Alaq, attributed the fluctuation of the “parallel market” and the rise in the dollar exchange rate to the dealings of some traders, stressing that the dollar exchange rate at the Central Bank is fixed and will not change.
Al-Alaq said regarding the fluctuation against the dinar: “The price set by the Central Bank for the US dollar is fixed and does not change, but the developments that have occurred in the import mechanisms have prompted some traders to turn to the black market to buy dollars.” Al-Alaq added: “These traders will soon return to the official channels to obtain currency, and thus the price will return to its normal level, especially since the Central Bank does not suffer from any problem with gold and foreign currency reserves, and continues to inject dollars, so we have not faced any obstacles in this regard.”
Then al-Alaq, the governor of the CBI said, “We do not have an official currency market (outside the Central Bank), there is only a black market, while the only source of dollars is the Central Bank. As for the dollars circulating in the markets, they are the surplus that is traded among citizens, because the Central Bank does not provide dollars for unofficial or illegal transactions”
I wanted to clarify this news of the suggested devaluation by the Iranian influencers in Iraq to show you just what measures they will go through to destroy Iraq. They will look at every hiccup to use as their excuse to burn-down the economy. This is the fight, the uphill battle to save the Iraqi economy. You cannot make such huge shifts in the currency rate when these hiccups occur, as these politicians suggest. It is not logical and will do more harm than good in the overall monetary policy.
These hiccups are predictable as the CBI is constantly, but slowly, moving away from the dollar to the dinar. Remember too what new policy the CBI just announced. (See my 02/10 Newsletter). In it I showed you the news titled “FROM DOLLAR TO DINAR… EXCHANGE RATE POLICY CONFUSES OIL COMPANIES AND THREATENS THEIR EMPLOYEES!” and how the Central Bank of Iraq’s decision to convert payments to contractors working with oil companies from US dollars to Iraqi dinars. Yes, this was a HUGE move and is going to have rippling effects but knee-jerk reactions are not necessary and things will settle down in time. WOW! WOW! WOW!
I need all my readers to realize that the CBI still is not fully in control of the exchange rate and as the parallel market does still exists, it has its own rate to circumvent the ‘official’ CBI rate. The CBI must control it within a 2% more or less fluctuation of the ‘official’ rate. It is needed and we have heard this from the IMF in many of the consultation sessions with Iraq. So 2% of 1320 is 26 thus 1294-1346 range.
The parallel market would have to operate ‘unofficially’ and illegally from 1294- 1346 range which is does in between orchestrated hiccups. The higher temporary spikes are caused by CBI policy and don’t just happen, get it?
These policies are being rolled out slowly as not to cause a sudden crash. Note that the CBI rolls out yet another policy to curb the parallel market even more then a short-lived spike. Then the CBI lets it settle down before the next stage. Since the CBI has told us the have plenty of reserves and even gold to back up the dinar there is no worry of a crash during these hiccups.
In the recent article titled “IRAQ’S MALIKI STANDOFF: THREE EXITS, NO EASY WAY OUT” 
In article titled “IRAQ HAS ‘HUGE PLAN’ TO TRANSFORM BANKING SECTOR, SAYS CBI GOVERNOR” we read that