Iraqi Contractors Reject Dollar Rate Hike as PM Moves to Ease Food Costs
Contractors federation warns exchange-rate decision will hurt projects, investment and jobs as government delays customs and tax collection on imported poultry, meat and eggs
ERBIL (Kurdistan24) — The Iraqi Contractors Federation on Thursday rejected the government’s decision to raise the official dollar exchange rate, warning that the move would increase costs for contractors, disrupt projects and place additional pressure on citizens and the private sector.
In a statement, the federation held the Iraqi government, Ministry of Finance and Central Bank responsible for the direct consequences of the exchange-rate decision, saying the measure came at a time when the private sector was already facing customs tariffs of up to 30 percent.
The federation said the higher dollar rate, amid already elevated prices, represented a direct blow to the contracting and investment sectors and threatened jobs, while warning that a number of projects could face delays or suspension as a result.
It called for the immediate reversal of Council of Ministers Decision No. 544 of 2026, issued on Oct. 6, and opposed incorporating the new exchange rate into the draft 2027 federal budget law.
The federation also called on the Iraqi parliament to exercise its legislative and oversight role to prevent citizens and the private sector from bearing what it described as the consequences of “unconsidered” fiscal and monetary policies.
The contractors’ group said its members would not remain silent over measures threatening their businesses and the rights of their workers and employees, adding that all options remained open, including legal action and peaceful demonstrations.
The statement comes as the Iraqi government seeks to contain the impact of the exchange-rate adjustment on domestic prices and the cost of essential goods.
Prime Minister Ali Faleh al-Zaidi on Thursday directed the postponement of the collection of customs duties and taxes imposed on imported eggs, chicken and imported live animals for meat production, according to his media office.
The measure is intended to support stability in local markets and ensure that essential food products remain available to citizens at affordable prices, the statement said.
The government’s move highlights the competing pressures facing Iraq’s economic policy following the exchange-rate adjustment: authorities are seeking to protect public finances and manage economic pressures while also limiting the effect of higher import costs on consumers.
The contractors federation, however, argued that the exchange-rate decision would have broader consequences for businesses dependent on imported materials and equipment, warning that higher costs could affect construction projects, investment and employment.
The dispute comes after the Council of Ministers approved a new exchange-rate structure on Oct. 6, with implementation beginning Oct. 7. Under the new structure, the Finance Ministry purchases US dollars at 1,500 Iraqi dinars, sells them to banks at 1,510 dinars, and banks and non-bank financial institutions sell them to final beneficiaries at 1,520 dinars per dollar.
The exchange-rate adjustment has triggered concern among businesses and traders over its potential impact on import costs and domestic prices, while the government has presented measures such as customs and tax adjustments as tools to cushion the effect on consumers and maintain market stability.
The contractors federation said it would continue opposing the new exchange rate and urged lawmakers to prevent its inclusion in the 2027 federal budget, setting the stage for further political and economic pressure over the government’s monetary and fiscal policy.
Public frustration has also been growing across Iraqi society, with citizens, business owners and other sectors expressing anger and disappointment over the impact of the exchange-rate decision and what they see as the government’s failure to provide better living conditions.
Social media platforms have been filled with posts and videos voicing opposition to the measure and concerns over rising prices and household and business costs.
Further reactions are likely in the coming days from citizens, business groups, professional and trade organizations and other sectors, with the possibility that the growing discontent could spill into the streets through demonstrations or other forms of public unrest if concerns over living costs and economic pressures continue to intensify.