By Guest Blogger. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.
One Year of Trump: Iraqi dinar Speculators Still Waiting for a Miracle That Will Never Come
As Donald Trump marks his first anniversary back in the White House on 20th January, one group of investors remains stubbornly committed to a fantasy: Iraqi dinar speculators still convinced that their fortunes will suddenly multiply a thousandfold. Many of these speculators think Trump’s presence in the White House will be the catalyst for that revaluation (or ‘RV’, as they call it).
Twelve months of economic reality have done nothing to shake their faith, even as every metric confirms what experts have been saying all along — there will be no massive revaluation.
The question is not whether the dinar will skyrocket in value. The question is: how much longer can speculators ignore the overwhelming evidence that their investment strategy is fundamentally flawed?
The Current Reality
As the anniversary of Trump’s inauguration approaches, the official USD/IQD exchange rate remains unchanged from a year ago, while anecdotally the unofficial “street” value of the dinar has weakened a little.
While the weakening, if real, may be small, some would argue that any apparent softening of the currency indicates the general direction of travel, and that has been against the speculators.
Oil Prices Slump
Far from creating conditions for currency appreciation, Trump’s first year has coincided with a marked deterioration in Iraq’s fiscal position. With oil prices around $62 per barrel, Iraq’s petroleum revenues, which account for more than 90 percent of total government income as of 2025, are no longer sufficient to cover planned public expenditures.
Despite a rise in recent days, Brent crude is down more than 20% since Trump regained power, and IMF estimates assume no major price increases this year.
Trump’s Policies Have Made Things Worse
Rather than helping Iraq as some speculators imagined, Trump’s policies have created additional headwinds. His aggressive stance towards Iran has disrupted Iraq’s energy security, whilst his broader trade policies have contributed to oil price volatility.
For Iraq, caught between its dependence on Iranian energy imports and pressure from Washington, Trump’s approach has created economic uncertainty rather than opportunity.
The Devaluation Risk
Perhaps most tellingly, experts are warning not of revaluation but of potential devaluation. A leading Iraqi economist has warned that Trump’s pressure to reduce oil prices could harm the Iraqi economy and potentially lead to devaluation of the Iraqi dinar, according to reporting from earlier in 2025.
Iraq has precedent for currency devaluation when faced with fiscal pressure. In December 2020, amidst a collapse in oil prices, the Central Bank of Iraq devalued the dinar by 22.7 percent, changing the official rate from 1,190 to 1,460 dinars to the U.S. dollar. The current economic pressures are severe enough that another devaluation cannot be ruled out — the exact opposite of what speculators expect.
The Psychology of Denial
What’s remarkable about dinar speculation is not just the gap between expectation and reality, but the psychological mechanisms that keep believers invested despite overwhelming contrary evidence.
The psychology of dinar speculation shares characteristics with other speculative bubbles and get-rich-quick schemes, with confirmation bias leading believers to interpret any news as supporting their thesis whilst dismissing contrary evidence.
This pattern has been evident throughout Trump’s first year. When the president makes any comment about the Middle East, speculators interpret it as a sign that revaluation is imminent. When oil prices rise temporarily, it’s seen as vindication. When predictions fail to materialise, the goalposts simply move to the next date.
There’s no economic mechanism by which a sudden, massive revaluation could occur without devastating consequences, as such a move would instantly make Iraqi goods and services prohibitively expensive, destroy the country’s export competitiveness, and potentially trigger economic chaos.
The Human Cost
Beyond the economic analysis lies a more troubling reality. Some individuals have diverted substantial portions of their savings into dinars, sometimes purchasing at markups far above the official exchange rate from dinar dealers. Others have held onto their investments for years, forgoing more conventional investment strategies that might have actually generated returns.
After one year of Trump’s presidency — a period some speculators insisted would bring the long-awaited revaluation — these investors are no closer to their dreams. The dinar has not appreciated; the promised miracle has not materialised.
What the Next Year Holds
Looking ahead, the outlook for Iraq, and therefore for the dinar, remains challenging. The World Bank projects that the current account is forecast to remain in deficit in 2025-27 and lead to a decline in the reserve to import ratio to 6.6 months in 2027.
The IMF emphasises the need for urgent measures, noting that Iraq’s vulnerabilities have increased in recent years due to a large fiscal expansion, with the oil price remaining well below what is needed to balance the budget.
These projections suggest continued fiscal strain, potential further reserve depletion, and mounting pressure on the dinar to weaken, not strengthen.
The Verdict After One Year
One year into Trump’s presidency, the verdict is clear: Iraqi dinar speculation remains what it has always been: a fundamentally flawed investment strategy based on economic misunderstanding and wishful thinking.
The dinar has not revalued by 1,000x. It has not revalued by 100x. It has not revalued by 10x. It has, in fact, slightly depreciated on the street. Iraq’s economy faces mounting fiscal pressures, declining reserves, and an uncertain future tied to volatile oil markets.
Trump has shown no interest in Iraqi currency policy, nor would he have the power to simply decree a revaluation even if he wanted to. The mechanisms of currency valuation respond to economic fundamentals, not presidential wishes.
For speculators still holding dinars and waiting for their fortunes to change, the question must be asked: what evidence would it take to change your mind? If twelve months of deteriorating fundamentals, weakening reserves, mounting fiscal deficits, and continued absence of any revaluation haven’t shaken your faith, what will?
The Iraqi dinar speculation phenomenon remains a cautionary tale about the intersection of hope, economic illiteracy, and the human tendency to cling to beliefs even when confronted with overwhelming contrary evidence. As Trump begins his second year in office, the speculators continue to wait for a miracle that economics tells us will never come.
The true revaluation needed is not of the dinar, but of the investment strategy itself. Until speculators recognise that currencies reflect economic realities rather than political fantasies, they will continue their futile wait for riches that exist only in their imaginations.
