WHAT RECENT MEASURES IRAQ HAS TAKEN TO REINFORCE THE VALUE OF THE IRAQI DINAR?

 WHAT RECENT MEASURES IRAQ HAS TAKEN TO REINFORCE THE VALUE OF THE IRAQI DINAR?

Iraq has implemented a series of strategic measures in 2025 to strengthen the value of the Iraqi dinar (IQD), improve economic stability and reduce dependence on the US dollar. Below are the key actions taken by the Central Bank of Iraq (CBI) and the Iraqi government:

🏦 Measures of the Central Bank of Iraq (CBI)

1-Reforms in the exchange market and liquidity control

2-The CBI has increased the monetary policy rate from 4% to 7.5% and raised the reserve requirement ratio from 15% to 18%. These actions seek to reduce excessive liquidity and control inflation, thus strengthening the dinar against foreign currencies.

3-Digitization of payments and transition to a cashless economy

4-Digital Payments Regulation No. 2 of 2024 has been implemented, promoting the use of electronic payment systems such as POS cards and digital wallets. This strategy seeks to channel liquidity into official channels, reducing the size of the parallel dollar market and increasing confidence in the dinar.

5-Exploring a Central Bank Digital Currency (CBDC)

The CBI has announced plans to launch a digital version of the dinar, aligning with global financial digitalization trends. This transition aims to improve payment efficiency and reduce the risk of counterfeiting.

6-Strengthening international reserves

Iraq's gold reserves increased by 45.1% in the last quarter of 2024, reaching 17.83 trillion dinars. This increase contributes to economic stability and provides additional support to the dinar.

💼 Measures of the Iraqi government

1-Tax and customs reforms

2-The implementation of the ASYCUDA system has allowed a significant increase in customs revenues, with an increase of more than 59 billion dinars. This improvement in tax collection contributes to greater economic stability and reduces the need for external financing.

3-Dedollarization and strengthening of the local currency

Since January 2024, the CBI has banned cash dollar transactions, promoting the use of the local currency in daily transactions. Additionally, electronic platforms have been established to regulate international transfers, increasing transparency and reducing the risk of illicit activities.

4-Collaboration with international institutions

Iraq has resumed negotiations to join the World Trade Organization (WTO), which could facilitate access to international markets and improve confidence in the Iraqi economy.

📈 Observed results

-The exchange rate of the dinar against the dollar has improved, going from 147,750 to 145,950 dinars per dollar, reflecting greater stability in the foreign exchange market.

-Annual inflation has remained below 3%, indicating an effective and controlled monetary policy.

-Public confidence in the financial system has increased, with greater use of electronic channels for transactions and payments.

These measures reflect Iraq's commitment to the modernization of its economy and the stability of its currency.

 Although challenges remain, the reforms implemented to date have shown positive results in terms of strengthening the dinar and economic stability.