Iraq's Prime Minister Owns the Dinar Devaluation as Baghdad Wholesale Trade Stalls

Al Jazeera reported on Thursday, 15 October 2026 (23 Mehr 1405) that Iraqi Prime Minister Ali al-Zaidi told parliamentary leaders of the devaluation of the dinar: "It is my decision and I am responsible for it." On 7 October 2026 (15 Mehr 1405) the Central Bank of Iraq raised the official cash rate for selling dollars to the public from 1,320 to 1,520 dinars per dollar.

Al-Zaidi said he had three options to cover salaries and mandatory spending: cutting salaries by 35 percent, paying them every 45 days, or taking foreign loans. He said his government inherited public debt above 208 trillion dinars in May and needs about 10 trillion dinars a month for salaries and essential spending. According to the prime minister's financial adviser in August, the central bank's foreign currency reserves had fallen from $106 billion to about $80 billion.

Al Jazeera writes that Baghdad wholesale traders have suspended buying and selling because of unstable prices, as they buy goods in dollars but regulations allow sales only in dinars. Before the war Iraq exported about 3.5 million barrels of oil a day through the Strait of Hormuz, which provided 90 percent of government revenue. Iraq is a major trading partner of Iran, and the dollar rate in Baghdad bears on the cost of cross-border trade.