At a Glance

• Iraq’s Council of Ministers has approved a new dollar exchange rate effective Wednesday.
• The government will use 1,500 dinars per dollar for purchases from the Ministry of Finance.
• The rate rises to 1,520 dinars per dollar for banks and citizens in the market.

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Iraq’s Council of Ministers has approved a new exchange rate for the U.S. dollar, setting $100 at 150,000 dinars for government purchases starting Wednesday, October 7.

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Key Statements and Focus Area

• Budget: “Fixing the dollar rate at 150,000 dinars will add an estimated 20 trillion dinars to the budget.” — Iraqi MP Dilan Ghafoor
• Oil Price: “In the draft budget law, the price per barrel of oil is set at $58.” — Dilan Ghafoor, Iraqi Parliamentary Finance Committee member
• Focus Area: The exchange rate adjustment is linked to Iraq’s 2027 federal budget and efforts to increase government revenues.

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The Council of Ministers approved the adjustment during its October 6 meeting based on a report submitted by the Minister of Finance and the Governor of the Central Bank of Iraq. Under the new rates, the Ministry of Finance will purchase dollars at 1,500 dinars per dollar, equivalent to 150,000 dinars for $100.

The rate rises to 1,510 dinars per dollar when dollars are sold to banks, while the rate for the wider market and citizens is set at 1,520 dinars per dollar, or 152,000 dinars for $100. The decision takes effect on Wednesday, October 7.

The move follows days of uncertainty over a possible adjustment to the official exchange rate. Channel8 reported on October 4 that the draft 2027 budget proposed setting the dollar at 150,000 dinars per $100.

At the time, MP Dilan Ghafoor told Channel8 that the proposed rate would eliminate the gap between the official and parallel market rates and could generate an additional 20 trillion dinars in government revenue. She said the draft budget was based on an estimated oil price of $58 per barrel, with total projected spending of 218 trillion dinars.

FYI

The exchange rate proposal came as Iraq’s parallel dollar market was trading well above the previous official rate. Channel8 reported that the parallel market had recently fluctuated between 157,000 and 160,000 dinars per $100, while the Central Bank had maintained its official rate in the 1,300 to 1,320 dinar range.

Earlier reports had also triggered market uncertainty over a possible devaluation. On October 5, the Slemani Currency Exchange Market spokesperson said no formal bill had been drafted at that time to change the official rate from 132,000 to 150,000 dinars per $100.

The 2027 budget is also being prepared amid pressure on Iraq’s public finances. Channel8 reported that the draft budget is moving toward a performance-based spending model, while the government is seeking to increase non-oil revenues and improve control over public spending.

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