The Iraqi Interior Ministry has banned people from dealing in US dollars in the latest move by authorities to control a fluctuating black market exchange rate.
The surprise announcement on Sunday reflects an attempt to close the gap between the official exchange rate and that on the black market, which has fuelled high prices and caused anger.
“The dinar is the national currency in Iraq,” the ministry said. “Your commitment to transact in it instead of foreign currencies boosts the country’s sovereignty and economy.”
It said dealing in other currencies “is a violation that is punishable by law” and threatened to “hold accountable anyone who attempts to undermine the Iraqi dinar and the economy”.
The Interior Ministry's Anti-organised Crime Directorate has sent its forces to markets across Baghdad and other cities, asking traders to sign a pledge to sell goods
only in dinar, Brig Gen Hussein Al Tamimi told The National.
“The widespread campaign aims at protecting the dinar,” said Mr Al Tamimi who heads the directorate's operations department. He said representatives from the Central Bank of Iraq and the Interior Ministry's intelligence department joined the patrols.
Those who breach the pledge will face a fine of one million Iraqi dinar (around $680), he added.
“If the violator repeats it he will face an imprisonment penalty of up to one year plus the one-million Iraqi dinar financial fine,” he added. “In case of a third violation, that penalty will be doubled and we will have the business licence turned.”
Market dealings in the dollar went underground on Monday and exchange offices, fearing arrest by undercover agents, were selling dollars only to trusted clients, at the black market rate.
The Gulf War in 1991, followed by harsh UN-imposed economic sanctions and the US-led invasion in 2003, caused a substantial devaluation of the Iraqi dinar. As a result, Iraqis have turned to the US dollar. A wide range of dealings, from wholesale trading to retail purchases, are settled with it.
During the past six months, the Iraqi government has been attempting to stop a currency crisis that has led to an increase in the prices of goods, and brought protesters out on to the streets.
Since later November, the Iraqi dinar has experienced added volatility after the US's tightening of procedures for international transfers, with some blaming Washington for the dinar's problems.
The US has complained that the dollar is being funnelled to Iran, Syria and Lebanon through the foreign currency auction run by the Central Bank of Iraq. Iran and Syrian are under US sanctions.
Since then, the Federal Reserve Bank of New York has applied strict measures on requests for international transactions from Iraq, rejecting many and delaying others, leading to an increased demand for the US dollar in Iraq.
It has also blacklisted several Iraqi banks suspected of money laundering and of carrying out suspicious transactions.
Baghdad-resident Mohammed Hassan Jaafar wants to buy a house and says he is uncertain what to do, as the estate agent wants to be paid in dollars.
“For decades, everything here is pegged to the dollar and there are things, such as properties or cars, the owners ask to be paid in dollars in order to be on the safe side in terms of inflation or to have less banknotes in hand in comparison to the amount of money they get in dinars,” said Mr Jaafar, 55.
“There are people, like me, who don't meet the criteria set by the Central Bank to buy dollars at the official rate so we go to exchange offices to buy at the black market rate,” he added, referring to the CBI measures to sell dollars to merchants for importing goods or to people who were travelling abroad.
The Iraqi government blames the US for the dollar chaos. It has taken a series of unsuccessful measures to contain the public's anger.
Security forces raided Baghdad's biggest markets for the US dollar and arrested several traders, accusing them of manipulating the prices.
While the official exchange rate is fixed at 1,300 dinars against the dollar, the currency was trading at about 1,470 on the black market on Sunday.
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From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
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How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
Director: Romany Saad
Starring: Mirfat Amin, Boumi Fouad and Tariq Al Ibyari
Sustainable Development Goals
1. End poverty in all its forms everywhere
2. End hunger, achieve food security and improved nutrition and promote sustainable agriculture
3. Ensure healthy lives and promote well-being for all at all ages
4. Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all
5. Achieve gender equality and empower all women and girls
6. Ensure availability and sustainable management of water and sanitation for all
7. Ensure access to affordable, reliable, sustainable and modern energy for all
8. Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
9. Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation
10. Reduce inequality within and among countries
11. Make cities and human settlements inclusive, safe, resilient and sustainable
12. Ensure sustainable consumption and production patterns
13. Take urgent action to combat climate change and its effects
14. Conserve and sustainably use the oceans, seas and marine resources for sustainable development
15. Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss
16. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
17. Strengthen the means of implementation and revitalise the global partnership for sustainable development
Honeymoonish
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Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
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Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
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Captain Marvel
Director: Anna Boden, Ryan Fleck
Starring: Brie Larson, Samuel L Jackson, Jude Law, Ben Mendelsohn
4/5 stars
Defence review at a glance
• Increase defence spending to 2.5% of GDP by 2027 but given “turbulent times it may be necessary to go faster”
• Prioritise a shift towards working with AI and autonomous systems
• Invest in the resilience of military space systems.
• Number of active reserves should be increased by 20%
• More F-35 fighter jets required in the next decade
• New “hybrid Navy” with AUKUS submarines and autonomous vessels
What sanctions would be reimposed?
Under ‘snapback’, measures imposed on Iran by the UN Security Council in six resolutions would be restored, including:
- An arms embargo
- A ban on uranium enrichment and reprocessing
- A ban on launches and other activities with ballistic missiles capable of delivering nuclear weapons, as well as ballistic missile technology transfer and technical assistance
- A targeted global asset freeze and travel ban on Iranian individuals and entities
- Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
