Official data released by the Central Bank of Iraq (CBI) shows a noticeable decline in the bank’s total reserves during the second quarter of this year.

Decline in the Central Bank’s Reserve Levels

According to statistical data published by the CBI, total currency reserves fell to approximately 118 trillion 947 billion dinars on May 28.

This marks a decline from May 21, when reserves stood at 120 trillion 675 billion dinars.

The one-week decrease totaled 1 trillion 728 billion dinars, representing a 1.43% decline and reflecting a continued downward trend in national reserves throughout May.

Drawing on Strategic Reserve Holdings

Financial reports issued by CBI indicate that reserves have continued to decline on a month-to-month basis.

Reserve holdings were recorded at 127 trillion 152 billion dinars in April, down from 130 trillion 443 billion dinars in March.

Economists view these consecutive declines as an indication that Iraq has begun drawing on its strategic monetary reserves to offset growing fiscal deficits.

Gold’s Role in Iraq’s Reserve Portfolio

Gold continues to represent a key asset within the structure of the CBI’s sovereign reserves.

According to the latest balance sheets, the value of gold held within official reserves has reached approximately 32 trillion 973 billion dinars, making it one of the most important and stable components of Iraq’s broader foreign reserve portfolio.

Impact of Declining Oil Revenues

The decline in CBI reserves reflects broader domestic financial pressures linked to reduced liquidity and shrinking oil revenues.

These pressures are connected to several overlapping factors, including disruptions affecting Iraqi oil shipments through the Strait of Hormuz, challenges in returning external oil sale revenues to domestic accounts, asset management constraints, and continued instability in global crude oil prices.