Between government denial and confirmation… what is happening with the printing of local currency?
Between government denial and confirmation… what is happening with the printing of local currency?
6-7-2026
Information/Report…
Economic warnings continue in Iraq regarding the dangers of resorting to printing local currency as a solution to address the financial deficit or secure salaries and operational expenses. This comes at a time when the issue is witnessing governmental debate regarding whether or not to implement new currency printing operations.
Economic experts emphasize that expanding currency issuance without backing from genuine production growth or an increase in foreign reserves and gold will lead to higher inflation rates and erode the purchasing power of the Iraqi dinar, in addition to negative repercussions on the stability of the local market.
Experts believe that increasing the money supply without sufficient economic backing will drive up the prices of goods and services. They warn against adopting this option under names such as quantitative easing or domestic loans, due to the pressure it could place on monetary policy and the challenge it presents to the Central Bank between financing government needs and maintaining currency stability.
In this context, specialists call for focusing on developing non-oil revenues and managing liquidity in the markets instead of expanding currency printing, to avoid entering an inflationary spiral that could threaten economic stability.
For his part, economist Hashim al-Haboubi warned against resorting to printing local currency to cover the budget deficit, considering domestic or foreign borrowing a less harmful option for the national economy.
Al-Haboubi told Al-Maalomah that “flooding the market with banknotes to cover salaries and government expenditures will lead to higher inflation rates and a decline in the value of the national currency against foreign currencies.”
He added that “Iraq possesses a sound financial buffer in the form of cash reserves and foreign assets, in addition to gold reserves approaching 175 tons,” noting the possibility of resorting to soft loans from international financial institutions when needed.
He stressed the importance of avoiding quick fixes that could negatively impact citizens’ purchasing power and exacerbate future economic challenges.
Meanwhile, conflicting official statements have sparked controversy regarding the issue of printing currency, with Foreign Minister Fuad Hussein confirming that approximately 25 trillion dinars have been printed to secure salaries and government expenditures.
While the Prime Minister’s financial advisor, Mazhar Muhammad Salih, denied the validity of reports circulating about printing currency outside legal frameworks, he emphasized that any currency issuance is subject to strict controls and full financial backing.
Salih explained to Al-Maalomah News Agency that printing currency is subject to market needs or to address liquidity shortages, and cannot be done without backing from foreign currencies and gold. He indicated that foreign currency reserves remain at comfortable levels and are used to support exchange rate stability.
This controversy comes at a time when concerns are mounting about the impact of any ill-considered monetary expansion on economic stability, making liquidity management and government spending among the most prominent challenges facing fiscal policy at the present stage.
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