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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
.Key Impacts
Limits currency manipulation
Reduces illicit dollar outflows
Aligns with international banking standards
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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10 Things the Central Bank of Iraq (CBI) Said About the Iraqi Dinar (IQD) in 2025
1. February 19: CBI's Dollar Distribution System Among World's Most Monitored
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.
2. February 27: Cash Transactions will Gradually Decline
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.
3. May 8: Dinars to Dollars -- Official List of Approved Banks
The Central Bank of Iraq (CBI) has announced that pilgrims can purchase dollars through designated banks and companies in Baghdad and other provinces.
4. September 4: CBI Launches Inter-Wallet Money Transfers
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.
5. November 19: CBI Clarifies Role of Investment Department
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.
6. November 21: CBI Issues Detailed Instructions for Exchanging Dinars
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.
7. November 24: CBI Firmly Denies Any Plans to Change Exchange Rate
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.
8. December 2: Digital Dinar Under Development; Exchange Rate Not a Fiscal Tool
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.
9. December 17: Currency Supply Reduced by 5.5%
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.
10. December 18: Inflation Drops to Historic Lows
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.
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