Kaifi Khoshnaw, a spokesperson for the Erbil Currency Market, stated that market rumors are destabilizing the Iraqi dinar, fueled by unverified reports of newly printed dinars in circulation, speculation over an official government devaluation, and a leadership vacuum following the removal of the Central Bank Governor.

The U.S. dollar experienced a sharp surge against the Iraqi dinar in the Kurdistan Region's parallel market on Monday, with the exchange rate climbing toward the 160,000 IQD mark per $100.

Khoshnaw Outlines Rumors Driving Dinar Instability

Addressing the market's exchange rate instability, Khoshnaw told Channel8 that the volatility is driven by widespread rumors. Chief among them, he noted, are unverified reports regarding whether 25 trillion newly printed dinars remain in circulation, adding that "nobody knows if this is true or false."

"The second reason is a rumor that the Iraqi government will raise the dollar, but there is nothing official yet because parliament must convene and vote on it,” he added.

Khoshnaw noted that market instability is also being driven by rumors surrounding the removal of Ali al-Alaq as Central Bank Governor.

Spokesperson: Widening Exchange Rate Gap Could Trigger Public Protests 

“Therefore, the situation is somewhat complicated,” he stressed, adding that the Iraqi government is waiting for the new CBI Governor to assume office.

The spokesperson warned that the surging value of the U.S. dollar could trigger public protests due to the widening gap between the official exchange rate (1,320 IQD per $1 USD) and the parallel market rate. 

Immediate Government Intervention and Transparency 

Khoshnaw stated that the Iraqi government "must step in as soon as possible" to stabilize the currency and prevent public financial losses. 

He emphasized that authorities must officially clarify whether an adjustment to the exchange rate has been enacted or provide a transparent update on current monetary policies.

Iraqi PM Calls for Banking Reforms and Global Digital Transformation 

Meanwhile, while overseeing the handover ceremony for incoming Central Bank Governor Nizar Nasser Hussein, Prime Minister Ali Faleh al-Zaidi highlighted “the importance of advancing banking reform programs in a manner that contributes to financial stability and provides a favorable economic and investment environment to support development.”

He reiterated the need to align with global digital transformation and adopt international standards across financial operations.