Latest news with #IQD
Iraq Business
a day ago
- Business
- Iraq Business
Iraqi Dinar Q&A: RV Prospects Two Weeks on from Airstrikes on Iran
By Guest Blogger. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News. Q: Following your recent article on the Dinar Revaluation (RV) and Israeli Airstrikes on Iran, the situation in the region has progressed. What is your current assessment as it relates to the dinar (IQD)? A: It has now been two weeks since the initial Israeli airstrikes on Iran, and the situation has continued to evolve. While a US-brokered ceasefire was announced on 23rd June, following a 12-day conflict that saw exchanges of missile and drone attacks, the broader implications for Iraq and the Iraqi Dinar's potential revaluation remain complex and largely negative. Here's a follow-up based on the latest developments: Lingering Instability and Uncertainty Despite the ceasefire, the underlying tensions between Israel and Iran persist, and this continued regional instability is a significant factor for Iraq. While Iraq itself largely avoided direct involvement in the recent fighting, its geographic proximity means it remains highly susceptible to any fallout. Political and Security Concerns: The conflict highlighted the potential for regional power struggles to spill into Iraq, impacting its already fragile domestic stability. There have been reports of continued efforts to manage the influence of Iran-aligned Iraqi groups, and the risk of renewed hostilities involving these groups remains. The conflict highlighted the potential for regional power struggles to spill into Iraq, impacting its already fragile domestic stability. There have been reports of continued efforts to manage the influence of Iran-aligned Iraqi groups, and the risk of renewed hostilities involving these groups remains. Economic Vulnerability: Iraq's economy, heavily reliant on oil exports, is particularly vulnerable. While there was a short-term rise in oil prices during the conflict, which generated some additional revenue, this was largely offset by increased import costs due to disruptions in maritime insurance markets, global price fluctuations, higher shipping expenses, and a decline in air transport and religious tourism. An Iraqi government adviser described the conflict's impact as a "double-edged shock," leaving the Iraqi economy in a state of "neutral uncertainty." Dinar Under Pressure The Iraqi Dinar has continued to face headwinds, largely due to the pervasive uncertainty and ongoing economic challenges. Dollarisation and Parallel Market: The increased regional tension has reinforced the demand for the US dollar as a safe haven. While the official Central Bank of Iraq (CBI) rate remains stable at 1,320 IQD to $1, the parallel market has seen fluctuations. Recent reports indicate that USD/IQD exchange rates have edged lower in Baghdad and Erbil, with selling prices for $100 ranging from 141,750 IQD to 142,250 IQD, still significantly above the official rate. This persistent gap is a clear indicator of market pressure and a lack of confidence in the Dinar. The increased regional tension has reinforced the demand for the US dollar as a safe haven. While the official Central Bank of Iraq (CBI) rate remains stable at 1,320 IQD to $1, the parallel market has seen fluctuations. Recent reports indicate that USD/IQD exchange rates have edged lower in Baghdad and Erbil, with selling prices for $100 ranging from 141,750 IQD to 142,250 IQD, still significantly above the official rate. This persistent gap is a clear indicator of market pressure and a lack of confidence in the Dinar. Smuggling Concerns: The issue of dollar smuggling to Iran, aimed at circumventing US sanctions, continues to plague Iraq's financial system. This illicit flow of currency further limits the CBI's ability to effectively manage the Dinar's value and build confidence for a revaluation. The issue of dollar smuggling to Iran, aimed at circumventing US sanctions, continues to plague Iraq's financial system. This illicit flow of currency further limits the CBI's ability to effectively manage the Dinar's value and build confidence for a revaluation. Budgetary Challenges: Iraq is facing significant fiscal strains, with the 2025 federal budget unlikely to be submitted to Parliament anytime soon. This delay is attributed to "severe financial deficits, unstable revenue streams, the absence of a coherent economic vision, and the looming legislative elections." A parliamentary finance committee member noted a budget deficit of nearly 80 trillion IQD (approximately $61 billion), which puts immense pressure on government spending and the overall economic outlook. Delays in the budget can directly impact public salaries and infrastructure projects, further dampening economic sentiment. Outlook for Revaluation Given these ongoing developments, the prospect of an Iraqi Dinar revaluation in the near future appears highly improbable. The confluence of factors including: Continued regional instability and potential for escalation. Persistent demand for the US dollar and challenges in the parallel market. Ongoing issues with dollar smuggling and US sanctions. Significant internal budgetary deficits and political uncertainty within Iraq. all contribute to an environment that is not conducive to a revaluation. While Iraq's vast oil reserves are a long-term asset, the immediate economic and geopolitical landscape presents too many hurdles. The Iraqi government's focus is currently on managing the existing economic challenges and navigating the complex regional dynamics, rather than pursuing a revaluation. For more information on the Iraqi dinar, check out IBN's Dinar Page here:
Shafaq News
2 days ago
- Business
- Shafaq News
Dollar prices stabilize in Baghdad, lower Erbil
Shafaq News/ On Wednesday, the exchange rates of the US Dollar against the Iraqi dinar remained steady in Baghdad and edged lower Erbil markets. According to a survey by Shafaq News, the dollar's rates set at 141,400 dinars for every 100 dollars, at the closure of the central Al-Kifah and Al-Harithiya stock exchanges in Baghdad. The selling and buying rates at currency exchange stores in Baghdad reached 142,500 IQD and 140,500 IQD per 100 USD, respectively.
Iraq Business
3 days ago
- Business
- Iraq Business
World Bank Approves $930m for Iraq Railway Upgrade
By John Lee. The World Bank approved on Wednesday a US$930 million [approx. IQD 1.2 trillion] loan for Iraq to modernise its railway network, strengthen domestic and regional trade, and support economic diversification. The Iraq Railways Extension and Modernization (IREM) Project will upgrade the 1,047-km railway line connecting Umm Qasr Port in the south to Mosul in the north, via Baghdad. The project will enhance travel efficiency, freight capacity, and access to sustainable transport infrastructure. It also supports Iraq's broader ambition to become a regional logistics hub through the Iraq Development Road (IDR), which aims to link the Gulf with Europe via Turkey. Jean-Christophe Carret, World Bank Middle East Division Director, said the IREM project is a key step in Iraq's shift "from reconstruction to development," helping reduce oil dependency by promoting trade and creating jobs. Key project components include: Rehabilitation of critical rail infrastructure; Modernisation of ageing locomotives and rolling stock; Upgrades to the Baiji maintenance workshop; Development of dry ports and logistics hubs to attract private investment; Implementation of a Safety Management System and infrastructure safety improvements; Technical assistance and training for Iraqi Republic Railways (IRR) personnel, with a focus on including women; Community engagement through a participatory planning and monitoring process. The project is overseen by the Ministry of Transport and implemented by IRR, with support from an international firm acting as Capital Expenditure (CAPEX) management agent. By 2037, the upgraded railway is projected to handle 6.3 million tons of domestic freight, 1.1 million tons of imports/exports, and 2.85 million passengers. The line will serve eight governorates, impacting around 17 million Iraqis. It is also expected to reduce road maintenance costs by shifting cargo from trucks to rail. The IREM project is anticipated to generate over 3,000 full-time construction jobs over seven years, and support 21,900 jobs annually by 2040 through expanded operations and logistics development. Full statement from the World Bank: Iraq: New US$930 Million Project to Extend and Modernize Railways, Promote Regional Connectivity and Boost Growth The World Bank Board of Executive Directors approved yesterday a US$930 million financing to help improve Iraq's railway performance, boost domestic trade, create jobs, and diversify the economy. The Iraq Railways Extension and Modernization (IREM) Project will upgrade the railway infrastructure and services between Umm Qasr Port in southern Iraq and Mosul in northern Iraq reducing travel time, increasing freight volumes and providing users with improved access to sustainable transport infrastructure and services. The Middle East is witnessing a resurgence in regional railways, bolstering trade routes within the region and with Asia and Europe to enhance connectivity and drive regional economic growth. Among these regional initiatives is the Iraq Development Road (IDR) announced in May 2023 that aims to transform Iraq into a pivotal transport hub by connecting the Gulf region through Iraq to the Turkish border, extending into Europe. Once connectivity is enhanced with existing ports and infrastructure, the IDR can significantly increase trade within Iraq and within the region. With Iraq's rail sector suffering from limited connectivity, disrepair and underfunding, investments in Iraq's existing railway network are an essential first step towards enhancing both national and regional connectivity. "As Iraq shifts from reconstruction to development, enhanced trade and connectivity can stimulate growth, create jobs, and reduce oil dependency," said Jean-Christophe Carret, World Bank Middle East Division Director. "The IREM project is vital for transforming Iraq into a regional transport hub and helping achieve the IDR's goals of improved connectivity and economic diversification and growth." The IREM project will rehabilitate and modernize 1,047 km of existing railways linking Umm Qasr Port to Mosul through Baghdad. The Project will also address the aging fleet of locomotives and rolling stock, refurbish the Baiji maintenance workshop, and procure necessary equipment and spare parts. Project activities will also promote private capital participation in the establishment of dry ports and logistics hubs with the generation of high-skill and sustainable jobs. The IREM project will enhance railway safety through a comprehensive Safety Management System, infrastructure upgrades, level crossing improvements, community awareness campaigns, emergency preparedness, and staff training. The Project will also include technical assistance to improve the institutional and corporate performance of the Iraqi Republic Railways (IRR), developing a Railway Sector Reform Action Plan, and identifying opportunities for private sector involvement. Furthermore, the Project will provide training for the IRR staff and support women's participation in the rail sector. The project will be implemented by the IRR under the oversight of the Ministry of Transport. To ensure successful and prompt implementation, an internationally recruited firm will also be hired under the project to act as a Capital Expenditure (CAPEX) management agent with a mandate to support the IRR in building institutional capacity to manage large CAPEX programs and manage the implementation of the Project contract packages. Project implementation will also prioritize meaningful citizen and community engagement and will establish a community-led planning and monitoring process through which citizens and communities will get regular progress updates and provide feedback on implementation concerns. By 2037, the revived railway line is expected to carry 6.3 million tons of domestic freight, 1.1 million tons of exports/imports, and 2.85 million passengers, including bulk commodities (such as grains or construction materials) and containerized commodities (such as industrial and consumer goods). The railway will traverse eight of Iraq's governorates, enhancing integration within federal Iraq, benefiting approximately 17 million people. The shift from trucks to trains will substantially decrease damage to roads and lower their annual maintenance costs. The Project will create over 3,000 full-time construction jobs for seven years. Once railway operations commence and the sector expands, the Project is expected to create 21,900 jobs annually by the year 2040. (Source: World Bank)
Shafaq News
3 days ago
- Business
- Shafaq News
PM Barzani pushes for majority government as salary crisis deepens
Shafaq News/ Kurdistan Region Prime Minister Masrour Barzani said Wednesday that the Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK) are working together to form a new majority government, as tensions rise over an intensifying salary crisis that has left public sector workers unpaid for more than six weeks. Speaking at a press conference in Erbil, Barzani said both ruling parties had reached a common understanding on the framework for the next cabinet. 'We have made serious efforts to form a majority-based government and remain in continuous dialogue,' he stated. 'There is no constitutional vacuum, and our doors are open to all political forces willing to participate.' Barzani also addressed the worsening salary dispute with Baghdad, saying a breakthrough may be near following direct conversations with Iraqi Prime Minister Mohammed Shia al-Sudani and Supreme Judicial Council head Faiq Zaidan. 'For two months, Kurdistan Region salaries have not been paid per the law. This is unconstitutional,' he said. 'We reject the politicization of salaries and any attempt to use them as leverage.' He revealed that a federal delegation is expected in Erbil within days to begin negotiations. 'We are optimistic,' he said. 'But if a solution isn't reached, we will fall back on internal revenues and spending cuts to protect the financial rights of our people.' As of Wednesday, civil servants and pensioners in the Kurdistan Region had entered their 42nd day without receiving May 2025 salaries. The last federal transfer—covering April wages—was made on May 13 and distributed by the KRG within four days. Since then, no additional payments have been issued, despite mounting pressure during Eid al-Adha and rising living costs. Official sources told Shafaq News that Wednesday's weekly cabinet meeting would focus almost entirely on the salary crisis, amid growing public unrest and labor strikes. The standoff deepened after a May 28 letter from Iraqi Finance Minister Taif Sami notified the KRG that Baghdad could no longer continue salary payments, citing a breach of the Region's 12.67% budget allocation. The letter claimed that although the Kurdistan Region had generated approximately 19.9T IQD(about $15 billion) in oil and non-oil revenues between 2023 and April 2025, it had only transferred 598.5B IQD (around $457 million) to the federal treasury. Amid the financial strain, an internal KRG finance directive dated June 23 ordered a suspension of all government expenditures for two months beginning June 24, citing 'severe financial conditions.' Efforts to resolve the issue through Iraq's Federal Supreme Court collapsed earlier this month when nine judges — including six principal members — resigned on June 16 over internal disputes. Shafaq News has learned that the resignations effectively halted a pending legal order that might have forced Baghdad to resume salary payments. The case had been filed by Kurdistan Region employees seeking emergency intervention from the court. The political deadlock has fueled public frustration across the Region. On Tuesday, staff at Halabja General Hospital staged a walkout to protest unpaid wages. In al-Sulaymaniyah, teachers planned demonstrations, though local security authorities urged postponement due to ongoing regional instability. Political analyst Hawri Karzan called on the KRG to form a unified delegation representing all major parties and head to Baghdad for direct talks. 'The lack of a cohesive position is allowing Baghdad to delay action,' he warned.
Shafaq News
6 days ago
- Business
- Shafaq News
Gold prices stabilize in Baghdad, rise in Erbil markets
Shafaq News/ On Sunday, gold prices remained stable in Baghdad while edging higher in Erbil markets. According to a survey by Shafaq News Agency, gold prices on Baghdad's Al-Nahr Street recorded a selling price of 681,000 IQD per mithqal (equivalent to five grams) for 21-carat gold, including Gulf, Turkish, and European varieties, with a buying price of 677,000 IQD. The selling price for 21-carat Iraqi gold was 651,000 IQD, with a buying price of 647,000 IQD. In jewelry stores, the selling price per mithqal of 21-carat Gulf gold ranged between 680,000 and 690,000 IQD, while Iraqi gold sold for between 650,000 and 660,000 IQD.
