The devaluation of Iraq's currency will erode Iraqi purchasing power, and the government will reduce tariffs on food staples to mitigate economic harm and reduce protest risk; meanwhile, political opposition to the measure will likely further slow cabinet approvals, add bureaucratic friction and could impede the adoption of the 2027 budget. On Oct. 7, the Iraqi cabinet approved a new rate of 1,520 Iraqi dinars per U.S. dollar, roughly a 14.5% devaluation of the currency compared to the previous rate. The devaluation is the first since late 2020, when the dinar was devalued in response to the COVID-19 pandemic, though the currency subsequently strengthened in 2023. On Oct. 8, Iraqi Prime Minister Ali al-Zaidi defended the decision in an address to parliament, saying, "We do not want to resort to borrowing in order to avoid further burdening the economy.