Iraq officially devalues the dinar to 1,500 per USD

Baghdad (IraqiNews.com) – The Iraqi Ministry of Finance officially enacted a structural adjustment to the national currency on Wednesday, October 7, 2026, resetting the official baseline exchange rate to 1,500 Iraqi dinars per U.S. dollar, while abruptly halting the advance collection of customs tariffs and tax deposits on foreign imports. The dual decision marks an immediate fiscal and monetary overhaul aimed at realigning official exchange metrics with market realities and easing operational gridlock across the country’s commercial supply chains. According to a formal ministerial statement, the action implements Iraqi Cabinet Resolution No. 544 of 2026, adopted during the Council of Ministers’ executive session on Tuesday, October 6. The decision formally alters the central parity framework that had pegged the dinar at 1,310 per dollar since early 2023. Under the updated regulatory mechanics detailed by the General Secretariat of the Council of Ministers, the new pricing ladder establishes: 1,500 IQD per USD: The sovereign purchase rate from the Ministry of Finance. 1,510 IQD per USD: The Central Bank of Iraq’s official wholesale selling rate to licensed commercial banks. 1,520 IQD per USD:The final retail selling ceiling permitted for licensed banks and non-banking financial institutions to end-beneficiaries and private importers. Simultaneously, the ministry terminated Cabinet Resolution No. 413 of 2026, which had enforced the mandatory advance collection of customs tariffs and estimated income tax deposits prior to outward wire transfers. The advance-settlement regime, originally passed on August 18 and made operational on October 1, required registered merchants to deposit import funds with commercial banks, forbidding international remittances until all projected customs assessments and duties were calculated and prepaid through the ASYCUDA automated system and certified electronic payment gateways. The requirement had triggered friction within merchant trade unions and wholesale supply networks, contributing to a severe cash bottleneck as traders turned to the parallel market to bypass advance tax liabilities—a dynamic that pushed cash dollar prices above 160,500 dinars per $100 earlier in the week. The suspension of advance collections provides relief to commercial importers who have faced overlapping regulatory updates throughout 2026. These earlier changes included the General Commission of Customs’ rollout of the revised 2026 tariff schedule under Customs Tariff Law No. 22 of 2010—which raised automotive import duties to 15 percent, revoked tax exemptions on hybrid vehicles, and replaced flat container fees with itemized cargo classification under Cabinet Resolution No. 957 of 2025. By adjusting the statutory peg to 1,500 dinars and suspending upfront tariff deductions, federal authorities aim to stabilize the parallel currency gap, reduce speculative volatility, and restore structured liquidity across Iraq’s foreign trade channels.