“A sick currency” in new clothes… Will removing zeros save the dinar or just beautify the crisis?
“A sick currency” in new clothes… Will removing zeros save the dinar or just beautify the crisis?
8-17-2026
Information / Report…
From time to time, the proposal to remove zeros from the currency and replace them as a solution to end inflation and simplify accounting transactions is raised in Iraqi economic and political circles. With fluctuating exchange rates, the ongoing cash liquidity crisis, and the pressures of public debt, the Iraqi citizen finds himself torn between government promises of stability and the very real fears of inflation. Will changing the local currency and removing its zeros represent a genuine lifeline for the ailing economy, or is it merely a cosmetic measure for a sick currency that will not address the root causes of the structural financial crisis plaguing the country?
Supporters of this measure believe it offers significant organizational and psychological benefits, most notably facilitating accounting transactions and reducing the astronomical figures in public budgets, bank accounts, and daily sales and purchase statements. Furthermore, it would restore confidence in the Iraqi dinar by giving it an appearance of strength and high value against foreign currencies like the dollar, thus improving investor confidence. Additionally, it would alleviate logistical burdens by reducing the volume of circulating cash and saving on printing, transporting, and storing it, and would compel citizens to bring cash hoarded at home into the formal banking system to combat the shadow economy.
Conversely, economists warn that removing zeros from the currency could become a mere illusion with potentially disastrous consequences, as it fails to address the root causes of the structural crisis linked to Iraq’s total dependence on oil. Furthermore, the process of withdrawing the old currency and printing and distributing the new denominations would be prohibitively expensive, and could potentially cause market instability, driving citizens to seek refuge in dollars or gold out of fear of economic collapse.
In this context, economist Abdul Rahman al-Mashhadani emphasized on Monday that the decision to remove zeros and change the local currency falls exclusively under the purview of the Central Bank of Iraq. He cautioned against taking this step amidst the current financial crisis, given its potentially negative repercussions on the market.
Al-Mashhadani told Al-Maalouma News Agency, “The idea of removing zeros and changing the currency is not new; work on it and a comprehensive study on it have been underway since 2012.” He added that the justifications recently put forward, claiming the move aims to control the funds of corrupt individuals, are illogical and impractical. He pointed out that “changing the currency will not have a direct impact on the big corrupt figures and those hoarding ill-gotten gains, as they have many ways to circumvent the decision, including distributing the funds to relatives and close associates or recruiting people to transfer them in exchange for financial commissions.”
He added that “the currency replacement process will take at least seven months at best, and requires the Central Bank to develop a new structure and designs, which will be subject to in-depth discussions.” He explained that “the printing process is not local but is linked to a British company, and the denominations are printed in four countries: France, Britain, Spain, and India.”
Al-Mashhadani clarified that “the replacement process needs specific and well-regulated banking outlets to prevent overcrowding, chaos, and exploitation by unscrupulous individuals.” He revealed that “the amount of money hoarded outside the banking system is enormous and estimated to be Approximately 92 trillion dinars.”
For his part, MP Murtada Al-A’ajibi, from the Iraqi Foundation Coalition, confirmed on Monday that talk of removing zeros from the Iraqi currency is nothing more than a proposal being circulated, noting that there are no current governmental efforts or plans to implement it on the ground.
Al-A’ajibi told Al-Ma’louma that “talk of removing zeros from the Iraqi currency is merely a proposal being discussed, and there are currently no governmental efforts or actual plans to implement this step,” explaining that “the matter has not yet reached the stage of implementation procedures.”
He added that “removing zeros does not represent a solution to the financial crisis that Iraq is suffering from, nor can it address the root of the economic problem,” noting that “addressing the financial situation requires real and well-considered measures that target the causes of the crisis instead of resorting to superficial solutions.”
Al-A’ajibi pointed out that “such steps do not contribute to addressing the financial crisis, but rather are considered patchwork solutions that do not address the economic problems fundamentally,” stressing the need to “focus on economic and financial reforms that would address the shortcomings and enhance the stability of the Iraqi economy.
” He emphasized the importance of “not treating the removal of zeros as a measure capable of solving the financial problems,” explaining that “addressing the crisis requires clear economic policies and practical measures that are appropriate to the nature of the challenges facing Iraq.”
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