Iraq’s central bank foreign currency sales fell sharply in July, extending a broader decline seen across 2026. The Central Bank of Iraq sold $5.662 billion during the month, according to newly released data. That figure marks a 20% drop from the $7.081 billion recorded in July 2025.
The latest figures also show a smaller decline compared with June. July sales fell by roughly $195 million from the previous month’s $5.857 billion. That represents a monthly decrease of about 3.3%, indicating continued moderation in foreign currency demand through the banking system.
Most of July’s sales supported banks rather than direct cash transactions. Banks received $5.367 billion to strengthen their foreign balances held overseas. Meanwhile, cash transactions reached $295 million during the month, according to the Central Bank of Iraq’s data.
Cash sales increased considerably from the same month last year. They climbed 31.7% from $224 million in July 2025. The rise suggests stronger demand for physical foreign currency, despite the overall decline in the central bank’s monthly sales.
By contrast, transfers used to strengthen banks’ overseas balances recorded a substantial annual decline. Such transfers fell 21.7% from $6.857 billion in July 2025. The reduction accounted for most of the overall drop in the central bank’s foreign currency sales.
The decline becomes more pronounced when looking at the first seven months of 2026. The Central Bank of Iraq sold a combined $31.574 billion between January and July. During the same period last year, total sales reached $47.985 billion.
That means central bank foreign currency sales declined by approximately $16.411 billion over the seven-month period. The figure represents a 34.2% annual reduction. It highlights a significant change in the scale of foreign currency transactions compared with 2025.
The July data therefore adds to a sustained downward trend in overall sales. At the same time, the increase in cash transactions points to changing patterns within foreign currency demand. Transfers supporting banks’ external balances remain the dominant component of monthly sales.
The figures could provide an important indicator of developments in Iraq’s foreign exchange market. Monthly sales can fluctuate with banking activity, import payments, and demand for foreign currency. However, the cumulative decline gives a broader picture of reduced transaction volumes so far this year.
For July alone, central bank foreign currency sales remained heavily concentrated in transfers for banks. Cash purchases represented a much smaller share of total sales. The contrasting movements underline changing demand between cash transactions and international banking transfers.
The latest figures also come as Iraq continues efforts to strengthen banking operations and improve financial compliance. Changes in banking procedures can influence how foreign currency moves through the formal financial system. Future monthly data will show whether the decline continues during the remainder of 2026.