Iraq's cabinet has approved a new exchange-rate structure for the dinar. The rate is set at 1,520 dinars per US dollar.

That is about 14.5 percent below the previous official rate, according to the state news agency.

The decision was adopted on 6 October and took effect on 7 October. It followed a Council of Ministers decision and a Finance Ministry statement.

The Finance Ministry's purchase rate is set at 1,500 dinars per dollar.

Banks and non-bank financial institutions will sell to end beneficiaries at 1,510 dinars per dollar.

Economists said the devaluation is a fiscal response to the shock to oil revenues. The US-Israel war on Iran disrupted oil exports through the Strait of Hormuz.

Iraqi exports fell to about 2.34 million barrels per day in August. That is down from more than 3.6 million before the war.

The move gives the government more dinars for each dollar of oil revenue. But it raises import costs and reduces households' purchasing power.

The 2027 draft budget assumes oil at $58 a barrel. It projects spending of 217 trillion dinars and a deficit of more than 40 trillion dinars.