Fresh discussions a few intended scarcity of dinars—affecting the November salaries in Iraq’s central and southern provinces and the September salaries within the Kurdistan Area—require explanation. The info change into transparent when analyzing the figures from the Central Financial institution of Iraq (CBI), the Ministry of Finance, and the Ministry of Oil.
You will need to distinguish between a money scarcity on the CBI and a dinar scarcity on the Ministry of Finance. Those aren’t the similar. The information presentations that the CBI isn’t working out of dinars; to the contrary, it has in truth decreased its forex issuance.
The true factor lies throughout the Ministry of Finance, the place the distance between earnings and expenditure has widened considerably. Because of this, the primary and maximum instant position the place cuts or delays have seemed is the Kurdistan Area.
Iraq is an oil-dependent nation, which means that its revenues and expenditures are pushed essentially by means of oil costs moderately than by means of executive making plans or the yearly state finances. In keeping with the CBI, oil has accounted for 99 % of general exports, 85 % of the nationwide finances, and 42 % of home product enlargement during the last decade. Despite the fact that the Financial institution experiences a relatively decrease proportion on the subject of earnings, the truth in recent times is that oil source of revenue has exceeded 90 % of general state earnings.
In observe, Iraq’s financial governance is formed way more by means of fluctuations in international oil costs than by means of the yearly finances legislation or any five- or ten-year building plans. As an example, during the last 9 months, the Ministry of Oil has reported revenues of $62 billion. In keeping with those figures, the CBI has provided 81 trillion dinars to the Ministry of Finance’s treasury—an quantity significantly not up to the 97 trillion dinars the Ministry of Finance spent throughout the similar length, exposing a vital hole between earnings and financial wishes.
In keeping with knowledge from the CBI, the rustic isn’t dealing with a money scarcity or a loss of dinars. If truth be told, as a part of its financial coverage, the CBI has decreased liquidity in flow by means of 4.5 trillion dinars during the last 12 months. As an example, in September 2024, the full quantity of Iraqi forex issuance declined from 104 trillion dinars to 99 trillion dinars. Maximum of this lower got here from dinars withdrawn from the forex out of doors banks moderately than from forex held by means of industrial banks, as proven under.
The money coverage of the CBI is carefully tied to grease revenues. As proven within the 3rd graph, oil revenues start to decline from September 2024 onward. In reaction, the Financial institution correspondingly reduces the amount of cash it problems, as illustrated in Graph 1. This demonstrates that fluctuations in oil costs without delay form Iraq’s financial insurance policies, compelling the CBI to regulate the amount of cash motion each out of doors the financial institution and throughout the industrial financial institution.
The present factor is the month-by-month decline within the Ministry of Finance’s revenues—which come essentially from oil—now not a scarcity of money, as is incessantly claimed publicly. As illustrated within the graph under, if expenditures in September on my own reached 8 billion bucks, then the distance between revenues and expenditures for the primary 9 months of the 12 months has surpassed 4.4 billion bucks.
During the last two years, the Ministry of Finance has lined this shortfall thru home debt. Because of this, home debt rose from $55 billion on the finish of 2023 to $67 billion by means of the 3rd quarter of 2025, an building up of more or less 21 % of home debt throughout that length. Then again, debt can not proceed indefinitely and canopy the deficits as a result of power deficits and money owed will sooner or later flip year-end revenues into debt responsibilities. The space should be addressed thru expenditure discounts, now not by means of frequently expanding debt. Sadly, the primary house focused for cuts has been the extend of the Kurdistan Area’s salaries, regardless of the area enjoyable its commitments by means of handing over each oil and home revenues.
Be aware: Earnings and expenditure figures for September 2025 are calculated as the common of the 8 previous months.
In keeping with knowledge from the Ministry of Oil and the Ministry of Finance, per 30 days oil revenues quantity to $6–7 billion, relying at the worth. Then again, in contemporary months, the Ministry of Finance’s expenditures have reached $10 billion monthly, moderately than the standard $8–9 billion. As this hole widens, the monetary burden falls at the Ministry of Finance, now not the CBI. The Financial institution can handiest supply dinars in share to precise earnings, now not in share to executive spending. Because of this, as proven within the first graph, Iraq’s money coverage displays a discount—moderately than a diffusion—in dinar issuance. When expenditures upward thrust whilst revenues decline, a deficit naturally emerges. In one of these scenario, exterior borrowing and debt change into not possible, and home debt supplies little aid. At that time, the issue manifests as a scarcity of dinars on the Ministry of Finance, now not on the CBI. It is because the spending in query isn’t investment-related. Banks and fiscal establishments can not finance or duvet deficits which might be directed towards salaries, social welfare bills, bonuses, support methods, and effort subsidies—pieces that generate no monetary go back. Those non-investment expenditures have reached 102 trillion dinars in one 12 months.
The placement of the Kurdistan Area is especially putting. On this executive—when compared with earlier years, earlier cupboards, or even contemporary sessions—the Kurdistan Area has delivered its oil and transferred its non-oil revenues. For the previous two months, SOMO has been promoting the Area’s oil, totaling 5.8 million barrels closing month. The common day by day export of Kurdish oil has been 200,000 barrels in November. In combination, this exceeds 11 million barrels, producing roughly $700 million—or 900 billion dinars—on the Ceyhan Port worth for Iraqi oil.
Along with this, the Area has transferred 120 billion dinars in non-oil revenues, contributing, on reasonable, 9.4 % of Iraq’s general non-oil earnings. But, regardless of those contributions, the September wage for the Kurdistan Area has but to be launched, whilst the government has already begun disbursing November salaries for the central and southern provinces.
In brief, the narrative a few “lack of cash” is deceptive. The true factor is declining revenues and emerging expenditures. When nationwide spending is fed on by means of salaries, social welfare, bonuses, help methods, and effort subsidies—even oil bought at $70 or $80 in keeping with barrel can not duvet the associated fee.
After all, the CBI can not fill a deficit exceeding 15 trillion dinars accrued over 9 months by means of the Ministry of Finance. To offer protection to the price of the dinar, the Financial institution should tighten its financial coverage, now not increase it.
Mahmood Baban is a analysis fellow on the Rudaw Analysis Middle.
The perspectives expressed on this article are the ones of the authors and don’t essentially replicate the location of Rudaw.
