The Central Bank of Iraq decided to reduce the interest rate and reactivate the use of securities in the country’s banks, for the first time since June 2023.
According to a document issued on Thursday by the Central Bank of Iraq and addressed to banks operating in Iraq, the bank decided to reduce the interest rate from 7.5% to 5.5%, in addition to reactivating the securities (Islamic certificate of deposit and money transfers) according to an annual plan and with two terms: with a return of 4% for a period of 14 days and a return of 5.5% for a period of 182 days.
The maximum investment ceiling was set at no more than 50% of the total private sector deposits in the bank, and the bank’s investment ceiling in a single auction should not exceed (500) billion Iraqi dinars.
This decision comes within the framework of the Central Bank’s preparations to end direct monitoring of financial transfers at banks, after launching an electronic platform in early 2023, which aims to enhance proactive monitoring of financial transfers.
According to an informed source in the bank, in a previous press statement, dealing in dollar transfers was limited to only six banks, while 13 banks will trade in other currencies, while the banks subject to US Federal Reserve sanctions remain under review by international auditing companies.
