Experts from the International Monetary Fund mission praised the measures taken by the Central Bank of Iraq, which contributed to maintaining the stability of the Iraqi economy and working to raise its capabilities.The mission said in the final statement on the sidelines of the meetings held in the Jordanian capital, Amman, that “growth in the non-oil sector returned strongly in 2023, with inflation receding. Growth in real non-oil GDP is estimated at 6 percent in 2023. After declining in 2022, overall inflation declined from the high level it reached at 7.5 percent at the beginning of 2023, to 4 percent by the end of the same year, reflecting the decline in food and energy prices at the international level.”The mission attributed these developments to “the return of trade financing operations to their normal course and the stability of the foreign exchange market. After some interruptions occurred following the implementation of the new anti-money laundering and counter-terrorist financing controls on cross-border payments in November 2022, improved compliance with the new system, The Central Bank of Iraq’s initiatives to reduce transaction processing times have led to a recovery in trade financing in the second half of 2023. This has ensured that the private sector can obtain foreign currency at official rates for import and travel purposes.”The mission welcomed “the initial steps taken towards establishing the Treasury Single Account (TSA), which is considered a critical tool for improving cash liquidity management.”The mission praised the efforts made by the Central Bank of Iraq aimed at getting rid of excess liquidity. The Central Bank increased the interest rate on monetary policy tools and raised mandatory reserve requirements, and also began issuing treasury bills with a maturity of 14 days last summer. The Fund called for Supporting existing efforts by the Central Bank by consolidating unused government deposits in the unified treasury account, refraining from pro-cyclical financial policy, reducing reliance on monetary financing, and improving public debt management, noting the continuation of efforts aimed at establishing an interbank market with support. “From the technical assistance provided by the International Monetary Fund. The mission also welcomes the steps taken by the authorities to accelerate the pace of digitalization of the economy, reduce dependence on cash and enhance financial inclusion.”
Central Bank of Iraq Information Office
