Iraqi dinar devaluation raises inflation fears
The Iraqi government decided, on October 6, 2026, to adjust the exchange rate of the dollar to become 1,520 Iraqi dinars per dollar, instead of 1,320 dinars, aiming to protect economic and financial stability, provided that sufficient foreign currency reserves are available. This move led to an widening gap between the official rate and the black market rate, with the dollar in Baghdad exceeding 168,000 dinars. The impact of the rise became evident across markets and daily life, with food and service prices increasing, especially for low-income groups, which affected sales movement and led to a decrease in demand in the market. This measure is part of precautionary procedures to counteract economic pressures resulting from the repercussions of regional crises and international tensions, as well as to ensure the continuation of financing foreign trade and to safeguard the national currency’s interests, despite weak domestic production that hampers achieving independence in the local market and increases reliance on imports.
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