Clare: Iraq cabinet approves Baghdad-Erbil recent deal to resolve Kurdistan salary and oil disputes
7/17/2025
SULAIMANI, Kurdistan Region —The Iraqi Council of Ministers, in an extraordinary session on Thursday, approved a landmark understanding reached between Baghdad and Erbil to resolve the Kurdistan Region’s salary and oil disputes, and decided to release funds to cover public sector salaries for May.
Under the agreement, the Kurdistan Regional Government (KRG) will supply 230,000 barrels of oil per day to Baghdad, while retaining 50,000 barrels for domestic use. It will also transfer 120 billion dinars in monthly non-oil revenues. In return, the federal government will disburse salaries and financial entitlements to the Region.
A source from the KRG Council of Ministers told Zoom News that Thursday’s agreement is preliminary, with a final comprehensive deal expected within 90 days. Both governments aim to sign a broader accord to settle all outstanding issues.
The source added that the KRG will transfer 240 billion dinars to Baghdad for May and June non-oil revenues ealry next week, marking the first step in fulfilling its commitments under the deal.
Earlier on Wednesday, the KRG Cabinet approved the agreement and decided to implement its terms, including the federal government’s obligation to send the Region’s salaries and financial entitlements.
The dispute escalated after the Iraqi Ministry of Finance withheld funds in late May, citing that the KRG exceeded its federal budget share for 2023–2025. As a result, nearly 1.2 million civil servants, retirees, and security personnel in the Kurdistan Region have gone unpaid since May 14, exceeding 70 days. LINK
Ryan1216: Was A agreement reached on salaries and oil resumption. Seems like it was from reading the article.
Clare: YES! IMO
Ryan1216: Thank you Clare. Looks to be officially done. Hopefully we can get the new rate quickly.
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Clare: Masrour Barzani announces an agreement to pay salaries to Kurdistan Region employees.
7/17/2025
Kursistan Regional Government Prime Minister Masrour Barzani welcomed on Thursday the agreement reached with the federal government in Baghdad to pay the salaries of the region’s employees, calling for the payment of the entitlements of the people of Kurdistan without any problems or disputes.
Barzani said in a statement received by Shafaq News Agency, “After the Kurdistan Regional Government, out of concern for the public interest and to ease the burden on the citizens of Kurdistan, showed the utmost flexibility and fully implemented all its obligations, and after long efforts and dialogues, the Federal Council of Ministers announced today the reaching of a joint agreement between the regional and federal governments.”
Barzani continued, “We welcome this step and look forward to the federal government taking the initiative to send the region’s salaries and financial dues.”
He added, “I have deep appreciation for the patience and steadfastness of the people of Kurdistan, and I thank all parties and entities that contributed and assisted in the efforts to resolve the salary crisis and have continued to support us.”
He expressed his hope that “salaries and financial dues, which are a legitimate right of the people of Kurdistan, will be paid from now on without any problems or disputes, and that we will all work to resolve issues within the framework of the constitution and with full respect for the agreements concluded.”
Regarding Kurdistan’s security situation, Barzani called for “an end to attacks on the Kurdistan Region, especially those targeting oil fields. We hope the federal government will cooperate in identifying the perpetrators and taking the necessary legal action against them.”
An informed source revealed details of a new financial agreement concluded between the federal government in Baghdad and the Kurdistan Regional Government on Wednesday, aiming to settle salaries, oil exports, and unify revenues.
The source told Shafaq News Agency that the agreement stipulates that the Kurdistan Regional Government will receive 240 billion dinars in revenues for May and June, at a rate of 120 billion dinars per month, in addition to delivering 230,000 barrels of oil per day to Baghdad, in exchange for the latter sending the salaries of the region’s employees for those two months.
He indicated that the regional government will begin the process of handing over local revenues from border crossings, along with the agreed-upon amount of crude oil, as part of the implementation of the terms of the new agreement.
The source added that the next phase will witness meetings between joint technical committees to review and audit figures and statistics related to oil exports and imports, as well as to discuss the region’s share of the federal budget.
For his part, an Iraqi government source said that the federal cabinet is awaiting the implementation of the Kurdistan Regional Government’s pledges to resolve the current crisis.
He explained that the federal government is awaiting an official letter from the Kurdistan Regional Government to begin implementing the agreement by the relevant committees.
The Kurdistan Regional Government’s Council of Ministers approved the new understandings with Baghdad during its session held yesterday morning, Wednesday.
The roots of the recent salary crisis between the federal government in Baghdad and the Kurdistan Regional Government (KRG) lie in ongoing disagreements over oil export mechanisms and the unification of public revenues. This is a long-standing crisis that resurfaces from time to time, but it has significantly worsened since May 2025, when the federal government refused to send salaries to KRG employees.
Baghdad justified the delay in disbursement by Erbil’s failure to deliver the agreed-upon quantities of crude oil (230,000 barrels per day) and its failure to transfer non-oil revenues from internal ports to the state treasury, which the federal government considered a violation of previous agreements included in the three-year federal budget law (2023-2025).
For its part, the regional government confirmed that it is facing technical and political difficulties in delivering the full amount of oil, especially given the ongoing suspension of oil exports via the Turkish Ceyhan pipeline since March 2023. This suspension stems from an international arbitration ruling against Turkey in the oil export dispute with Iraq. This has forced Erbil to rely on domestic exports to meet its financial needs. LINK
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Clare: Prime Minister’s Advisor: Economic and disciplinary factors behind exchange rate stability and dollar decline
7/17/2025
The Prime Minister’s financial advisor, Mazhar Mohammed Salih, confirmed that the decline in the “dollarization” phenomenon and the stability of the Iraqi dinar exchange rate are due to a combination of crucial economic and disciplinary factors.
Saleh explained, in a statement to Al Furat News Agency, that “the disciplinary factors were represented by tightening control over the circulation of the dollar in domestic transactions and completely prohibiting its use in local settlements and payments, in accordance with the law.
He pointed out that these measures included bank deposit mechanisms for real estate transactions, which were previously the focus of demand for cash dollars, and the dinar replaced them with remarkable success.
He noted that this success is credited to the Central Bank of Iraq and its monetary policy, despite the criticism it faced. Saleh added that the exchange rates in the parallel market would have been in line with the official markets, had it not been for the recent geopolitical tensions in the Middle East, which caused a difference of 142 dinars per dollar.”
Foreign trade financing and monetary strengthening mechanisms
The financial advisor explained that “one of the most important success factors that led to the decline in the parallel market’s strength is the direct financing of small traders’ foreign trade from official dollar outlets at a rate of 1,320 dinars per dollar, without the need for intermediaries. He pointed out that small traders’ imports constitute more than 50% of Iraq’s total foreign market trade.”
Saleh did not fail to point out that the mechanisms for Iraqi banks’ foreign currency cash consolidation with correspondent banks have become easier as an alternative to the Central Bank’s window and previous platforms, which were abolished at the beginning of the year. He emphasized that these mechanisms have proven successful in ensuring the official exchange market dominates the entire market for foreign transfers at the fixed exchange rate of 1,320 dinars per dollar.
Trade Policy and the Use of Electronic Payment
Saleh also emphasized the role of trade policy, which intervened for the first time by opening giant shopping centers and expanding into this area (hypermarkets), describing it as a “price defense policy in favor of the official exchange rate,” and weakened market demand for financing some of its trade from the parallel market, which had become “highly costly.”
Finally, the financial advisor noted the growing public trend toward widespread use of electronic payment cards funded at the official exchange rate (1,320 dinars), which has become “one of the modern travel customs and traditions in Iraq.” He added that travelers now receive a share of cash dollars when traveling, subject to very transparent and strict controls.
From.. Raghad LINK
Clare: The Central Bank to Al-Maalouma: There are no concerns about salary disbursements, and cash liquidity is available.
7/17/2025 Information / Baghdad…
Financial expert and member of the Central Bank of Iraq’s board of directors, Ahmed Brihi, confirmed on Thursday that media reports of a cash liquidity crisis affecting salary disbursements are inaccurate and contain significant exaggerations and misinformation. He emphasized that salary disbursements are safe and currently face no risks.
In a statement to Al-Maalouma, Brihi said, “The repeated talk on some satellite channels about the existence of a cash liquidity problem and its impact on salary delays is not based on reality, but rather includes unjustified exaggerations.” He pointed out that “salary delays – if they exist – are often due to technical and administrative reasons, and have nothing to do with a lack of liquidity.”
He added that “the concept of cash liquidity is sometimes misunderstood,” noting that “the issue is not a shortage of cash available to the government, but rather sometimes relates to providing new revenues to the federal budget or activating borrowing mechanisms, whether domestic or foreign.”
Brihi pointed out that “government payment procedures are proceeding normally, and there are currently no concerns regarding the disbursement of salaries.” LINK
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Clare: Al-Harki: The Baghdad-Erbil understandings may pave the way for the enforcement of an oil and gas law.
7/17/2025 Information / Baghdad..
Patriotic Union of Kurdistan (PUK) member Ahmed al-Harki affirmed on Thursday that reaching solutions to the outstanding disputes between the federal government and the Kurdistan Regional Government is in the interest of both parties and could pave the way for rebuilding trust and enacting a transparent and clear oil and gas law.
“Everyone, whether in Baghdad or Erbil, now realizes that resolving chronic disputes is the best option for both parties,” Al-Harki told Al-Maalouma. He noted that “the upcoming agreements could establish a relationship based on rights, duties, and transparency, even though past experience has proven that temporary solutions do not address the roots of crises.”
He added, “Agreeing on these issues could be a starting point for lasting understandings, despite the difficulty of reaching radical solutions at this time.”
He concluded by saying, “The period following the current parliamentary session may witness the drafting of a new oil and gas law, after everyone realized that mutual understanding is the best path, even if it begins with temporary solutions.” LINK
