Major IQD Rumor Alert: Iraq Shown Interest in Joining the BIS; What This Could Mean for the IQD RV

What is the BIS, and what does “joining” mean

The Bank for International Settlements (BIS) is an international financial institution owned by central banks. It acts as a bank for central banks (a forum for central bank cooperation, a hub for financial stability research, and a host of settlement/cooperation functions).

It has been reported that Iraq asked the Central Bank of England to sponsor Iraq's membership in the BIS.  The problem is that there is no documented evidence to support this claim in the Western media. Please see the last paragraph of this report for Arabic reporting.

Membership or participation in the BIS or its committees (or having accounts at the BIS) can give a central bank several advantages:

• Access to technical forums, working groups, and policy dialogue with major central banks

• access to or participation in certain settlement/liquidity facilities, cross-central bank swap lines, and standard-setting discussions

• greater credibility and prestige in the financial/central banking community

• access to BIS-hosted infrastructure or services (e.g. data, statistical frameworks, oversight, monitoring)

• stronger integration into the global “club” of central banks and financial institutions

However, BIS membership or access is not trivial: central banks must meet standards of governance, transparency, reporting, risk management, and often must align to international norms (AML/CFT, capital adequacy, operational transparency, etc.).

Thus, if Iraq is exploring (or rumored to be exploring) alignment with BIS frameworks, that signals an intent to upgrade its financial infrastructure, enhance credibility, and better integrate with the global financial system.

Why this could be important for Iraq

If Iraq were to gain more official connection or participation via the BIS, here are some possible advantages:

1. Credibility, signaling, and investor confidence
   Being in the “club” of central banks helps enhance credibility. It signals that Iraq is serious about aligning with international norms, adopting stronger central banking standards, embracing transparency, etc. This could help attract foreign investment, reassure creditors, reduce perceived sovereign risk, and lower borrowing costs.

2. Access to central-bank cooperation and liquidity support
   In times of crisis, central bank networks can provide assistance through swap lines, reserve liquidity facilities, and cooperation. Having a seat (or voice) in BIS committees or governance might open doors to more favorable terms or early warnings.

3. Standardization and infrastructure upgrades
   Closer integration entails adopting best practices in payment systems, settlement, data sharing, risk management, cross-border clearing, regulatory frameworks (AML/CFT), and cyber resilience, among others. This helps reduce friction in international banking, cross-border trade, and foreign exchange operations.

4. Support in currency management/stability
   As Iraq tries to manage its foreign exchange regime, external credibility and stronger central bank tools (e.g. better liquidity management, access to foreign central bank cooperation) can help buffer shocks, reduce volatility, and support more stable exchange rate policies.

5. Influence in global financial governance
   Participating in BIS working groups or committees allows Iraq some voice in shaping standards (statistical reporting, central bank governance norms, systemic risk oversight, etc.), rather than simply being a passive adopter of external rules.

6. Facilitating correspondent banking and remittances
   One of the challenges for many developing-economy central banks is maintaining relationships with major correspondent banks abroad (for U.S. dollar clearing, Euro clearing, etc.). A stronger BIS affiliation or alignment could reduce counterparty risk perceptions and improve correspondent banking access.

In short: exploring BIS membership or deeper integration is a move toward “financial normalization” — making Iraq’s central bank more robust, resilient, connected, and credible internationally.

What this could (or might not) mean for Iraq’s “RV goals”

Here, “RV” refers to the idea (often speculative) that the Iraqi dinar might undergo a large revaluation (dramatic increase in exchange rate/value) relative to the U.S. dollar (or other currencies). This is a standard narrative among dinar speculators. Let me bridge that to BIS membership prospects, with caveats.

Possible positive links to revaluation efforts

• Stronger institutional backing
  If Iraq’s central bank is seen to be aligning with global standards, adopting more rigorous oversight, and improving macroeconomic stability, that can reduce the “risk premium” on the currency. That is, the market would discount the likelihood of chaotic devaluation or collapse, and might give more room for an appreciating trend (or less depreciation).

• Improved confidence/leverage
  International investors, remittance flows, sovereign bond markets, and central bank swap/line access may respond favorably to the perception of modernization. If foreign capital sees Iraq as a safer bet, more demand for Iraqi assets (denominated in dinar or in Iraq’s sovereign bonds) might push up the dinar’s valuation (or slow its losses).

• Better foreign exchange management tools
  Through stronger central bank infrastructure and access to central bank cooperation, Iraq could better manage FX interventions, buffer reserves, or mitigate balance-of-payments shocks, which could support a more stable or upward trajectory for the dinar.

• Alignment with de-dollarization / alternative currency flows.
  There is some indication Iraq is trying to expand the use of non-USD currencies in trade (e.g., Chinese renminbi, Euro, UAE dirham) as a way to reduce over-dependence on the U.S. dollar. (State Department)

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  If BIS membership or alignment helps Iraq manage multi-currency settlement, correspondents, and risk across multiple currencies, that could facilitate a smoother transition. A stronger central bank hand might reduce volatility and support a managed upward revaluation of the dinar in that multi-currency regime.

Crucial caution: BIS membership ≠ guarantees revaluation

However, it’s important to stress that joining or engaging with BIS is by itself not sufficient to produce a dramatic revaluation. Some important caveats:

• The revaluation (or “RV”) of a currency depends on macro fundamentals: trade balance, foreign reserves, inflation, fiscal discipline, capital flows, monetary policy credibility, external debt, geopolitical stability, etc. Even a BIS-aligned central bank cannot, by itself, force a large upward adjustment unless the fundamentals support it.

• Markets may demand credible track records, not mere announcements. If Iraq announces its intention to join the BIS but fails to deliver on transparency, enforcement, or consistency, markets may remain skeptical.

• External constraints: Iraq’s economy is heavily dependent on oil revenues, as well as external shocks, geopolitical risk, and exposure to sanctions, among other factors. All these can overwhelm even a well-run central bank.

• Revaluation is sometimes politicized or speculative. In many “dinar RV” narratives, the magnitude and timing of revaluation are speculative and often driven by hopes rather than rigorous economic planning. BIS membership could be part of the signaling for legitimacy, but doesn’t itself guarantee large gains.

• Incremental benefits are more likely than overnight large gains. Even in best-case scenarios, the impact may unfold slowly (improved credit ratings, lower spreads, gradual appreciation, better access), rather than an abrupt revaluation.

What to watch for / what would confirm the inquiry

If Iraq is seriously pursuing BIS membership or integration, you might expect to see:

• Official announcements by the Central Bank of Iraq, the Ministry of Finance, or the government confirming “application/inquiry/negotiation with BIS.”

• Steps toward improving central banking governance, legal reforms, transparency laws, and reporting upgrades (e.g., publishing BIS-standard statistics)

• Upgrades in anti-money laundering/counterterrorism finance (AML/CFT) compliance regimes.

• Upgrades in payment systems, cross-border settlement capabilities, and adoption of BIS or IMF standard frameworks (e.g. CPMI, BIS committees).

• Alignments with data-sharing, financial stability, and systemic risk oversight frameworks used by BIS or global central banks.

• New correspondent banking relationships or swap lines involving other central banks or BIS-facilitated facilities.

What’s confirmed (in Arabic + Iraqi outlets)

On September 14, 2025, the Central Bank of Iraq (CBI) said Governor Ali Mohsen Al-Alaq met Bank of England Governor Andrew Bailey in London and invited him to support Iraq’s efforts to join the Bank for International Settlements (BIS) in Switzerland (because the BoE sits on the BIS board). This wording appears in the CBI’s own Arabic release and is mirrored by Iraqi/Arabic media. (البنك المركزي)

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