As dinar drops, Iraq says embassies safe in light of US-Iran tension
The Iraqi dinar fell slightly on Thursday, as the country responds to the latest round of potential escalation between the United States and Iran.
An Iraqi militia commander said Thursday the United States would be “humiliated” if it attacks Iran, even as Baghdad sought to convey that embassies in the country are safe amid rising tensions with Iran.
What happened: Abu Ala al-Walai, leader of the Iran-backed Kataib Sayyid al-Shuhada militia, said in a post on the social platform X early Thursday morning that the United States would be “humiliated” in the event of a war.
“If war breaks out, hundreds of martyrs will be on the scene and America’s pride will be humiliated once again,” said Walai. “Neither it nor its collaborators will remain in the Middle East.”
Kataib Sayyid al-Shuhada is one of several Iran-backed militias in Baghdad and is closely affiliated with Iran’s Islamic Revolutionary Guard Corps.
The comments follow the US decision on Wednesday to evacuate diplomatic personnel from Iraq, citing safety concerns. A US Embassy spokesperson told Al-Monitor on Thursday that the ordered departure applies to both the US Embassy in Baghdad and the consulate in Erbil. US Secretary of Defense Pete Hegseth authorized the voluntary departure of military family members from the Middle East on Wednesday.
On Thursday, an Iraqi military spokesperson said that diplomatic missions in the country are safe.
“All diplomatic missions, both Arab and foreign, operating in Iraq are functioning within a highly secure environment, enjoying broad freedom of communication and operational effectiveness,” Sabah Al-Numan told the official Iraqi News Agency.
Numan called the US decision an “internal procedural and precautionary measure,” saying the move was “not related to any actual security threats within Iraqi territory.”
The Iraqi dinar fell slightly on the black market on Thursday amid the tensions. The dinar was trading at around 1,430 to the US dollar on the informal market, up from roughly 1,410 dinars the day prior, according to Iraqi media reports. The official rate is 1,320 dinars to the dollar.
Background: Tensions have been rising between the US and Iran amid the nuclear talks between the two. Trump told reporters on Thursday that Iran will need to "give us some things they're not willing to give us" in the negotiations, but that he does not seek war. "I'd love to avoid the conflict," he said.
Trump added that an Israeli strike on Iran is a possibility. "I don't want to say imminent, but it's something that could very well happen."
On Wednesday, Iranian Defense Minister Aziz Nasirzadeh said that “all US bases are within our reach,” referring to the possibility of a war breaking out.
The United States and Iran began negotiations over the Islamic Republic’s nuclear program in April. A series of meetings have failed to yield an agreement, and Trump has repeatedly threatened to bomb Iran if it does not come to a deal that would limit its nuclear capabilities. Iran denies accusations it is pursuing a nuclear weapon.
Omani Foreign Minister Badr al-Busaidi said on Thursday that the next round of talks will take place in Oman on Sunday.
Iraq, which neighbors Iran and hosts around 2,500 US troops, has been caught in the crosshairs between the two countries in the past. The US assassinated IRGC Quds Force commander Qasem Soleimani in Baghdad in early 2020, following attacks by Iran-backed militias on the US Embassy in Baghdad. Iran responded by striking US military positions in Iraq.
Know more: In February of last year, a US strike killed several members of Kataib Hezbollah, another Iran-backed militia, in Baghdad. The attack followed the militias striking US forces in response to the Gaza war.
Rosaleen Carroll contributed to this report.
