Iraq’s recent dinar devaluation was the best option to protect foreign reserves from an oil revenue shock, although the country still holds enough reserves to cover at least a year of imports, Central Bank of Iraq (CBI) Director General of Statistics and Research Samir Fakhri Nima said on Tuesday.
Read more: Iraqi dinar devaluation sparks backlash from blocs inside the cabinet
Speaking at the Middle East Research Institute’s MERI Forum 2026 in Erbil, Nima said disruptions around the Strait of Hormuz had sharply reduced oil revenue, with the effects emerging in May and June because of deferred payments for oil sales. He put oil’s share of government revenue at more than 93%.
Nima put monthly government spending at the equivalent of about $6 billion to $6.7 billion at the new Finance Ministry exchange rate, but said average oil exports had recently exceeded 2.5 million barrels per day, easing financing pressure on the government and the CBI. The oil revenue shock made it “necessary” to assess domestic and foreign borrowing options, while Iraq’s external debt declined in recent years.
Government operating spending generates demand for dollars at the CBI, adding pressure to foreign reserves, he said.
On October 7, Iraq raised the public dollar-selling rate from 1,320 to 1,520 dinars, while the rate applied to Finance Ministry transactions rose from 1,300 to 1,500. Iraqi analyst Mohammed Al-Saffar told Reuters the adjustment would give the government more dinars per dollar of oil revenue but raise import costs. CBI data showed foreign reserves had fallen to $80.6 billion by the end of July, from $97.4 billion at the end of 2025.
