Shafaq News

Economic confusion spread across Iraq in recent days as claims of “missing funds,” “salary delays,” and “cut livelihoods” circulated widely on social media and some media outlets.

The speculation focused on allegations that nearly $2B had disappeared from the Social Protection Fund of the Ministry of Labor and Social Affairs, coinciding with a brief delay in salary payments for employees in several state institutions.

Fake News

Financial adviser to the caretaker prime minister, Mudher Mohammed Saleh, dismissed the claims as unfounded, describing them as part of a “heated political season” in which negative rumors about Iraq proliferate.

Saleh told Shafaq News that Iraq maintains a strong financial capacity supported by solid oil revenues and non-oil income. He added that salaries, pensions, and social protection programs remain at the top of government priorities, noting that occasional delays can occur for simple technical reasons.

“The current wave of fear-driven narratives has created unnecessary public anxiety,” he said, stressing that Iraq is neither under siege nor at war, and that financial and monetary policies remain focused on ensuring stable living conditions, from food support programs to salaries and infrastructure.

Saleh concluded that talk of salary cuts, a devalued dinar, or economic collapse amounts to “lies built on lies.”

USD Prices Stable

Earlier, the dollar spiked in Iraq’s parallel market as traders reacted to the government’s upcoming 1 December pre-payment customs rule. Most traders halted dollar sales shortly, putting immediate pressure on the parallel rate and causing noticeable volatility across several provinces.

Alaa Al-Fahad, a member of the media office at the Central Bank of Iraq, affirmed that the bank has no intention of changing the official exchange rate of 1,320 dinars per US dollar.

Current monetary policy, he explained, aims to protect this rate, strengthen public confidence in the banking sector, and support Iraq’s international commitments, noting that exchange-rate stability has pushed inflation into negative monthly levels, helping stabilize prices.

Al-Fahad added that fluctuations in the parallel market stem largely from speculation driven by news and rumors, “while the Central Bank continues to finance foreign trade at the official rate and to meet all legitimate dollar requests.”

Financial Risks

Economic expert Nawar Al-Saadi warned that public fears regarding vanished funds or disrupted incomes should not be dismissed as merely another corruption narrative, arguing that such concerns reflect deeper vulnerabilities in the national economy.

Al-Saadi told our agency that Iraq faces structural financial pressures, a diminishing capacity to absorb shocks, as well as administrative and fiscal burdens that undermine public accounts while eroding citizens’ trust in the state.

He said that declining transparency and weak governance increase the cost of public services, raise unemployment, and heighten the risk of protests. Al-Saadi called for urgent steps, including public disclosure of disputed financial files, independent investigations, expanded social protection for low-income families, and reforms to customs and tax systems to boost non-oil revenues.

Over the medium term, he urged restructuring of wages and public spending and directing investment toward productive sectors to reduce reliance on oil and curb waste.

Economic Governance

In a separate assessment, economic expert Karim Al-Halo said meaningful reform cannot be achieved without comprehensive governance of the financial system.

He confirmed to Shafaq News that public and societal funds must be kept within banks and financial institutions to prevent liquidity crises, arguing that “without this step, no serious reform can take hold.”

Al-Halo said Iraq remains behind in this area “either by design, as a result of administrative shortcomings, or due to corruption,” leaving the economy exposed to shocks and vulnerable to any rumor or crisis.

Written and edited by Shafaq News staff.