Iraq has devalued the dinar against the US dollar for the first time since 2023, cutting its official exchange rate to 1,520 from 1,320 per dollar.
The Central Bank of Iraq said the move followed a cabinet decision. It will give the government more dinars for each dollar earned from oil exports, helping Baghdad meet domestic spending commitments, including salary payments.
Economists warned that the devaluation will also increase import costs and push up consumer prices. Nabil Al-Marsoomi, an economics professor at Basra University, said the measure would create more dinar liquidity but lead to higher prices.
Iraq’s finances have come under pressure after disruption to oil exports, which account for most government income. The country’s budget deficit widened by nearly $6B to about $22B in the first seven months of 2026, according to Finance Ministry figures. Oil revenues reached nearly ID30 trillion during the period.
The official gazette said Iraq expects to spend nearly ID217 trillion ($167B) in 2027. The government is forecasting oil exports of around 4 million barrels per day, above pre-war levels.
Source: AGBI
