Iraq Devalues Dinar to 1,500 Per US Dollar Amid Cash Crunch
What happened
Iraq's Council of Ministers approved the devaluation of the dinar to 1,500 per US dollar. This move, the second major devaluation in six years, was triggered by a deepening cash crunch following the Iran-Israel war and disruptions to the Strait of Hormuz. The Central Bank of Iraq issued a directive setting the official exchange rates for banks and the public.
From thenationalnews.com
Why it matters
Iraq relies on oil exports, which account for over 90 percent of its budget, and nearly all pass through the Strait of Hormuz. The financial strain has forced Baghdad to delay payments to farmers and construction firms and rely on short-term borrowing. The finance ministry warned that without this currency adjustment, the 2026 budget could not be funded.
The ongoing war with Iran is reportedly causing significant damage to Iraq's crude oil output and straining the country's state finances.
From thenationalnews.com
Who's involved
- IraqSovereign state undergoing currency devaluation.
- Central Bank of IraqBanking regulator that recommended and implemented the devaluation directive.
- Council of MinistersExecutive body that approved the currency devaluation.
- finance ministryMinistry that warned parliament about the inability to fund the 2026 budget.
- Ministry of FinanceGovernment agency involved in the currency adjustment mechanism.
- BaghdadCapital city of Iraq where financial strain is evident.
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The entities involved
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