The Iraqi government is currently navigating a significant transition in its foreign and domestic policy as the United States moves toward a full military withdrawal from the country. Prime Minister Ali al-Zaidi has signaled a strategic pivot, aiming to move Iraq beyond its traditional role as a battleground for influence between Washington and Tehran. This shift is characterized by a renewed emphasis on internal stability, including comprehensive banking reforms and the strengthening of state institutions.

Recent diplomatic engagements, such as the meeting between Iraqi Prime Minister al-Zaidi and Iranian President Masoud Pezeshkian, highlight Baghdad's efforts to cultivate a more independent path. Analysts suggest that the success of this transition depends heavily on the broader geopolitical climate, specifically the potential for a formal agreement between the US and Iran. If such an agreement materializes, it could provide Iraq with the necessary breathing room to pursue a more autonomous foreign policy. However, the country remains in a delicate position, as it attempts to maintain functional relationships with both Western and regional powers while simultaneously insulating its economy from external volatility. The focus on banking reform is viewed as a critical step in this process, intended to modernize the financial sector and reduce vulnerabilities that have historically been exploited by competing foreign interests. While the departure of US troops marks the end of a decades-long security arrangement, the Iraqi government is framing this period as an opportunity to assert sovereignty and prioritize national development over regional proxy dynamics.