Iraq’s dollar reserves rebound to $80 billion as cash inflows continue

A currency exchange agent counts US dollars at his company in Iraq’s southern city of Basra. Photo: Hussein Faleh/AFP Baghdad (IraqiNews.com) – The Central Bank of Iraq (CBI) announced on Tuesday, October 27, 2026, that Iraq’s foreign exchange reserves rebounded to approximately $80 billion across September and October, recovering from a recent low of $73 billion. The monetary authority offered assurances to the public regarding the ample availability of physical greenbacks, confirming that scheduled cash shipments from the United States are proceeding as planned. Speaking to the Iraqi News Agency (INA), Mahmoud Dagher, adviser to the CBI Governor and official spokesperson for the central bank, detailed that the aggregate dollar reserves—held across CBI accounts and federal government repositories at the Federal Reserve Bank of New York—gained significant ground, while sovereign gold reserves held firm at 170 metric tons. Dagher attributed the reserve replenishment to recent monthly oil export revenues reaching near $6 billion, describing the inflow as acceptable given current regional market pressures. He noted that reserve health is measured by import coverage rather than absolute figures. When oil shipments faced disruptions earlier this year between April and June, Iraq’s reserve buffer contracted from 12 months of import cover to roughly nine months, before recovering back toward prior benchmarks. Dagher emphasized that the Ministry of Finance must accelerate structural diversification to reduce sovereign dependency on central bank foreign assets for operational budget financing. Addressing physical liquidity, Dagher confirmed that Prime Minister Ali Faleh Al-Zaidi is personally monitoring incoming cash flights, with each air consignment carrying roughly $500 million. Two cargo aircraft loaded with physical banknotes have already arrived in Baghdad, with additional shipments slated to land in the coming days. The surplus of cash liquidity enabled the central bank to raise individual traveler allowances from two quotas up to six quotas per year. However, Dagher noted that the pace of upcoming cash consignments remains tethered to regional security stability, as armed flare-ups or active conflict could complicate cargo transport logistics and transit insurance. On the placement of Iraq’s foreign exchange reserves, Dagher affirmed that maintaining primary sovereign holdings with the U.S. Federal Reserve is governed by financial logic, technical prudence, and sovereign asset protection rather than political preferences. He explained that pending foreign legal claims against Iraqi state banks continue to restrict custodial options, making Federal Reserve custody vital for legal immunity. While Iraq maintains diversified secondary reserves across Switzerland (Basel), European centers, the United Arab Emirates, and China, the Federal Reserve remains the anchor repository safeguarding Iraqi sovereign wealth.