Baghdad source: No decision taken on redenominating the Iraqi dinar

Summary

• A government source said currency redenomination remains under preliminary study, with no decision and no implementation date.
• The source tied slower market activity to regional tension and the closure of the Strait of Hormuz.
• Dropping zeros from the dinar touches every price, contract and bank balance in Iraq.

The latest

Iraq has taken no decision on removing zeros from the dinar, a government source told the Iraqi News Agency on Wednesday, saying the idea is still at the stage of preliminary discussion and economic feasibility assessment. The same source acknowledged a slowdown in buying and selling across Iraqi markets and said the government is weighing initiatives to stimulate commercial and productive activity.

Details

• The denial: The source said floating a proposal for study or discussion does not mean approving it or beginning immediate implementation, and that circulating expectations cannot be treated as binding decisions or fixed application dates. On redenomination specifically, the source said no decision has been taken on the matter.
• The market picture: According to the source, the government recognizes the slowdown in buying and selling activity in the markets, and the effect this is leaving on citizens, traders and project owners. The statement did not quantify the slowdown or name the sectors most exposed to it.
• The external cause: The source attributed the pressure to regional factors rather than domestic policy, saying these challenges are not confined to Iraq but face most countries of the region to varying degrees, in light of regional tension and the closure of the Strait of Hormuz.
• The trade channel: The source said the Hormuz closure caused disruption in the movement of trade and supplies, along with higher transport, shipping and insurance costs. No figure was given for the increase in those costs or for the volume of Iraqi trade affected.
• The policy response: The source said the government is discussing initiatives to stimulate commercial and productive activity and to revive the markets while easing the effects of regional challenges. The initiatives were not named, and no timetable or budget allocation was disclosed for them.
• The information appeal: Alongside the denial, the source called for reliance on official information, a signal aimed at the circulation of redenomination talk as though it were settled policy. No specific platforms or reports were identified as the origin of the expectations.
• The procedural stage: The source placed the currency file in the circle of preliminary discussion and the determination of its economic feasibility — a formulation that stops short of endorsing the idea while keeping it formally alive as a subject of study.
• The attribution: The remarks were made by an unnamed government source speaking to the Iraqi News Agency, not by a named minister, the Finance Ministry or the Central Bank of Iraq. No accompanying official statement from a monetary authority was issued with the comments.

Background

Redenomination, commonly described in Iraq as deleting zeros, has circulated as a policy idea for years. It would rescale banknote values without changing purchasing power, and would require repricing contracts, salaries, bank balances and accounting systems nationwide.

Between the lines

The framing does two things at once. By attributing the slowdown to Hormuz, higher freight and insurance costs, and region-wide tension, it moves responsibility for weak trade outside domestic policy. By confirming the currency file sits in preliminary study rather than killing it, the source cools expectations of imminent action without foreclosing the option later.

What's next

Watch for a named statement from the Central Bank of Iraq or the Finance Ministry on the currency file, the disclosure of the promised stimulus initiatives, and any reopening of the Strait of Hormuz easing shipping and insurance costs.

Source: Iraqi News Agency (INA)