How did the central bank’s policies turn into a knife in the side of local markets and citizens?
How did the central bank’s policies turn into a knife in the side of local markets and citizens?
10-18-2026
Information / Report…
Iraqi wholesale markets are facing an unprecedented state of paralysis and economic stagnation, following a mass reluctance among merchants to sell their goods due to the opaque and unclear monetary policies pursued by the Central Bank of Iraq.
These ineffective measures have not only dried up local cash liquidity by reducing the daily injection of funds into the market to a mere $3 million while diverting hundreds of millions abroad, but have also opened the floodgates for parallel market speculators to manipulate exchange rates and impose their conditions outside the official rate.
This structural chaos has caused a severe shortage of basic commodities and a dramatic surge in prices, eroding the confidence of both merchants and citizens in the banking system. It has left the livelihoods of Iraqis hostage to rumors and daily speculation, with the ordinary citizen ultimately bearing the brunt of the situation.
In this context, economic and banking expert Diaa Mohsen attributed the paralysis and stagnation plaguing wholesale markets and the reluctance of merchants to sell their goods to the opaque and unclear policies pursued by the Central Bank of Iraq. He emphasized that these measures have left the parallel market in a state of constant fluctuation.
Mohsen told Al-Maalomah News Agency on Sunday, “The refusal of wholesalers to sell their goods has caused a shortage of basic commodities in the markets, which has automatically led to a new surge in the prices of goods and commodities, with the ordinary citizen being the sole victim of this chaos.”
He added, “The Central Bank injects hundreds of millions of dollars daily, but most of it goes as foreign transfers, while what is injected into the local and cash market does not exceed $3 million.” He pointed out that “this cash shortage has opened the door wide for speculators in the parallel market to manipulate exchange rates and impose their sales outside the official rate.”
Mohsen explained that “this ineffective mechanism has eroded the confidence of both merchants and citizens in the Central Bank’s monetary policy, leaving markets hostage to rumors and daily speculation.”
For her part, Mona Qasim, a member of parliament from the State of Law Coalition, emphasized that Iraq’s continued near-total reliance on imports of basic goods and vital materials poses a strategic threat, weakening the national economy and leaving it vulnerable to external crises. She stressed that the decline in the value of the national currency, in the absence of domestic production, has heavy and direct repercussions on the livelihoods of citizens and vulnerable groups.
Al-Gharabi told Al-Maalomah News Agency that “importing the majority of the country’s food, medicine, and life-saving consumer goods makes the citizen’s livelihood and health security dependent on international markets and fluctuations.” She added that “the absence and decline of domestic industry and agriculture transforms any fluctuation or drop in the dinar’s exchange rate into a direct price shock that erodes purchasing power and burdens the poor and middle classes.”
She added that “addressing the economic challenges does not lie in temporary financial and patchwork measures, but rather requires a decisive governmental approach to activate production plans and support the public and private sectors,” noting that “reviving local factories and providing protection for the national product are the only way to break the grip of random imports and protect the stability of the domestic market.”
Qasim emphasized that “the current stage necessitates reducing dependence on foreign markets by adopting strict self-sufficiency policies in the food basket and medical supplies,” calling for “directing investment allocations towards vital sectors that contribute to ensuring social stability and protecting citizens’ livelihoods from financial shocks.”
Earlier, The National newspaper confirmed in a report that Iraq’s reliance on imports for a large percentage of its needs, including food, medicine, and consumer goods, makes it more vulnerable to the effects of the dinar’s devaluation.
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