Iraq’s foreign reserves have reached approximately $79.2 billion in 2026. Iraq foreign reserves remain at relatively safe levels, according to a financial adviser to the prime minister. However, officials warn that continued reserve declines could create future economic risks.
Mazhar Saleh, financial adviser to Prime Minister Ali al-Zaidi, said Iraq still maintains a sufficient financial buffer. He cited International Monetary Fund estimates for the country’s total foreign reserves. The figures place Iraq’s reserves at around $79.2 billion this year.
Financial experts generally consider reserves covering more than six months of imports a safe level. This measure helps countries manage external financial pressures and maintain essential imports. Iraq’s current reserve position remains above critical levels, according to Saleh.
However, officials have expressed concern about the direction of reserves. The issue does not currently involve an immediate shortage of foreign currency. Instead, authorities worry that continued declines could weaken Iraq’s financial protection over time.
Foreign reserves play an important role in supporting the Iraqi dinar. The Central Bank of Iraq uses its foreign currency resources to meet legitimate demand for US dollars. Maintaining sufficient reserves can therefore help reduce pressure on the exchange rate.
A strong reserve position also gives the central bank greater room to respond to financial shocks. It can help authorities manage external payment needs and maintain confidence in the national currency. For Iraq, this role remains particularly important because of its dependence on oil exports.
Oil revenue represents one of the country’s biggest sources of foreign currency. When oil prices or export revenues fall, government income can decline quickly. Lower oil earnings can also reduce the flow of foreign currency into the country.
This dependence creates an important challenge for Iraq’s financial stability. A prolonged decline in oil income could place additional pressure on foreign reserves. It could also make exchange-rate management more difficult if foreign currency inflows weaken.
Saleh stressed the importance of protecting the independence of the Central Bank of Iraq. He warned against using foreign reserves to cover government budget deficits. Such a policy could accelerate reserve depletion and create additional inflationary pressure.
The government therefore faces the challenge of balancing public spending with financial stability. Maintaining adequate reserves requires careful management of government revenues and expenditures. It also requires stronger protection of monetary policy decisions.
The Iraq foreign reserves figure of $79.2 billion provides a significant financial buffer. Nevertheless, the direction of reserves remains an important indicator for policymakers. Continued monitoring could help authorities identify risks before they become more serious.
Iraq also needs to reduce its exposure to fluctuations in oil markets. Expanding non-oil sectors could provide additional sources of government revenue and foreign currency. Economic diversification would therefore strengthen the country’s long-term financial position.
For now, officials say Iraq’s reserves remain within relatively safe levels. However, preventing further erosion remains a priority for economic policymakers. The Iraq foreign reserves position will continue to play a central role in protecting currency stability and broader economic confidence.