Exclusive: Iraq’s currency in circulation surges past $86B

Iraq’s currency in circulation rose to 113.56 trillion dinars ($86.3 billion) in May 2026, marking an increase of 13.76 trillion dinars ($10.6 billion), or 13.8%, compared with the end of 2025, according to data reviewed by Shafaq News.

The amount of cash circulating in the economy increased steadily throughout the first five months of the year. Currency in circulation stood at 99.80 trillion dinars in December 2025 and climbed to 101.43 trillion dinars in January, 104.61 trillion dinars in February, 108.99 trillion dinars in March, 112.90 trillion dinars in April, and 113.56 trillion dinars in May.

The biggest monthly increase occurred in March, when the total rose by approximately 4.37 trillion dinars. Another significant increase of about 3.91 trillion dinars followed in April before growth slowed in May, when circulation expanded by around 664 billion dinars.

The increase comes at a time when Iraq is facing pressure on public finances. Challenges include a gap between government revenues and spending, disruptions in oil income, and delays in salary payments for some government institutions.

Financial and banking expert Mahmoud Dagher, a former director general at the Central Bank of Iraq (CBI), said the rise in currency in circulation is a normal central bank tool but has become one of the few short-term options available to inject liquidity into the economy.

Dagher warned that continued growth in cash circulation could increase inflationary pressures and place additional strain on Iraq’s foreign currency reserves. However, he noted that policymakers currently have limited alternatives and are using this approach as the less risky option.

He explained that Iraq does not have access to significant external financial support or a sovereign wealth fund that could provide additional resources during periods of financial stress. He also pointed to limitations in alternative oil export routes.

Earlier on Tuesday, the Central Bank of Iraq confirmed that currency in circulation reached 113.56 trillion dinars at the end of May 2026, up from 112.90 trillion dinars in April, as cash circulating outside the banking system continued to grow.