CBI denies printing money to fund salaries

Shafaq News- Baghdad

The Central Bank of Iraq (CBI) rejected on Sunday claims that it is printing money to cover government salaries, following remarks by Foreign Minister Fuad Hussein about printing 25 trillion Iraqi dinars to address the country's financial crisis.

Discounting treasury bills differs fundamentally from issuing currency, the bank stressed, describing the former as a standard mechanism used by central banks to provide temporary liquidity against government debt that is repaid at maturity. However, issuing money without corresponding assets is prohibited under Iraq’s Central Bank Law No. 56 of 2004 because it can fuel inflation and weaken the national currency.

CBI pointed out that its role is to manage monetary policy and protect the financial system rather than serve as a permanent source of budget financing, adding that any exceptional measures are implemented under strict controls and according to economic requirements.

“The current circumstances highlight the need for long-term fiscal policies aimed at building financial buffers capable of absorbing economic shocks and oil market volatility,” the bank said, calling for greater economic diversification, broader revenue sources, and efficient public debt management to reduce the impact of future crises and preserve overall economic stability.

Iraq remains heavily dependent on oil income, which accounted for about 84% of budget revenues during the first quarter of 2026. At the same time, disruptions to shipping through the Strait of Hormuz during the US-Israeli war on Iran have sharply reduced exports. According to Eco Iraq Observatory, shipments have fallen below 800,000 barrels per day, resulting in estimated daily losses of $128 million.