Prepared by: Asst. Prof. Abdulmahdi Rahim Department of Business Administration Currency devaluation is an exceptional measure adopted by economic policymakers to address structural imbalances and finance the budget deficit. Several factors may prompt monetary authorities to resort to this option, foremost among them a sharp decline in public revenues resulting from external shocks or falling oil prices. This is particularly relevant to the Iraqi economy, which relies heavily on oil revenues. Other contributing factors include the urgent need to strengthen foreign exchange reserves and reduce the budget deficit. In terms of its economic consequences and effects, this measure may offer certain short-term advantages, particularly by increasing government revenues denominated in Iraqi dinars from oil exports priced in US dollars. This can help the government meet its salary obligations and finance operational expenditures. However, currency devaluation also produces immediate adverse effects on domestic markets, most notably inflationary pressures and rising prices for imported goods and food products. These developments reduce citizens’ purchasing power, particularly that of low-income groups. In conclusion, currency devaluation represents a bitter remedy and a temporary instrument for alleviating financial crises. Nevertheless, it remains insufficient in the absence of genuine structural reforms, including diversifying sources of income, supporting domestic production, and encouraging investment to achieve sustainable economic stability.