The decision follows a revenue collapse caused by the effective closure of the Strait of Hormuz, which cut crude oil exports to 1.25M BPD since March, down from 3.5M BPD last year. With estimated losses of $80B and a projected 2027 deficit exceeding 40T dinars, Baghdad has relied on $100B in foreign reserves to pay $5B in monthly public sector salaries. The devaluation reduces the real cost of those salaries by roughly 13% without requiring explicit pay cuts.
Tuesday, October 20, 2026
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Iraq Cuts Dinar Value to 1,520 per USD Amid Hormuz Oil Export Loss
Global Markets13 days ago
The Central Bank of Iraq has introduced the largest change to its exchange rate since 2020, sparking a political fight in Baghdad over the nation's financial stability. Lawmakers are demanding a reversal of the move, which shifted the public dollar-selling rate to 1,520 dinars from roughly 1,320, a devaluation of approximately 13% to 15%. The adjustment effectively undoes efforts by the previous administration to strengthen the currency to protect purchasing power.
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