October 19, 2026 | Baghdad – Erbil
The Iraqi dinar continues to lose value, while Prime Minister Ali Faleh Al-Zaidi’s government keeps defending its financial policies despite the deterioration in citizens’ purchasing power.
Figures from Iraq’s currency markets on Monday morning revealed that the dollar continued to rise, less than two weeks after the government decided to officially devalue the dinar.
Baghdad: 168,600 Iraqi dinars per $100 at the Al-Kifah and Al-Harithiya currency exchanges, compared with 168,000 dinars on Sunday.
Currency exchange shops: Selling prices reached 169,000 dinars per $100.
Erbil: 168,400 dinars per $100.
Official exchange rate for the public: 1,520 dinars per dollar, up from 1,320 before the October 7 decision.
The result? The official cost of purchasing dollars has increased by approximately 15.2%, while the price at some currency exchange shops exceeds the new official rate by more than 11%.
These are not merely numbers displayed on currency exchange screens. They translate into additional pressure on the prices of imported goods, food, medicines, and production supplies, threatening the purchasing power of Iraqi households.
⚖️ Al-Zaidi’s Government… Have Citizens Become the Means of Covering the Budget Deficit?
Al-Zaidi’s government justified the devaluation of the dinar by citing declining oil revenues and mounting pressure on the national budget, particularly after regional warfare disrupted Iraq’s oil exports.
But the question that must be asked is: Why does economic reform begin by reducing the real value of citizens’ salaries and savings instead of tackling wasteful spending and unproductive government expenditure?
First: Shifting the Burden of the Crisis onto Citizens.
Devaluing the dinar allows the government to collect more revenue in local currency for every dollar earned from oil exports. At the same time, however, it increases import costs.
In other words, the government’s accounts may look better on paper in dinar terms, while ordinary citizens face higher prices.
Second: The Absence of Structural Reform.
Iraq continues to depend on oil for more than 90% of its budget revenues.
This is a structural weakness that the government failed to address before resorting to currency devaluation.
Third: An Alarming Fiscal Deficit.
Estimates for the 2027 budget point to a deficit exceeding 40 trillion Iraqi dinars.
So what is the solution? Further weakening the national currency, or reconsidering spending priorities, corruption, government privileges, and projects that deliver little economic value?
Fourth: The Persistent Gap Between Official and Parallel Exchange Rates.
Despite the adjustment to the official exchange rate, the dollar continues to trade at a significantly higher price on the parallel market.
This demonstrates that changing the official rate alone has failed to address underlying problems involving confidence, liquidity, and access to dollars.
Fifth: Financial Dependence on External Powers.
On October 18, US authorities announced the easing of restrictions on certain Iraqi currency exchange companies.
However, this limited measure does not end Iraq’s dependence on dollar-based financial channels subject to American influence.