Iraq’s cash reserves are {reassuring}
Two economic experts believe that Iraq’s current cash reserves are “reassuring” and are the best compared to previous years.
Iraq ranked third in the Arab world in terms of foreign exchange reserves in 2024, after Saudi Arabia and the UAE.
Academic Dr. Nabil Al-Marsoumi told Al-Sabah: “Iraq ranked third in the Arab world in terms of foreign exchange reserves for the year 2024, noting that despite the slight decrease in foreign exchange reserves in the Central Bank of Iraq from (109,153) billion dollars in 2023 to (106.7) billion dollars in 2024 according to data from the Central Bank of Iraq, as a result of the deduction of remittances to the Iraqi government, the financial situation in Iraq is still cohesive, and it occupies the third place after Saudi Arabia and the Emirates, whose reserve ratio is (499) billion dollars for Saudi Arabia and (210) billion dollars as reserves for the Emirates.
currency reserve
He added that the country has large cash reserves, which are greater than 100 percent of the volume of the issued currency, considering the percentage for a country like Iraq that maintains cash reserves equivalent to between 20 and 40 percent of the volume of the issued currency as positive, indicating that the financial situation is reassuring as it has exceeded 100 percent, and thus the cash reserves in the country are very large, pointing out the importance of the matter, as it represents a firewall in the face of crises that may occur, even if they are caused by a decrease in the price of oil.
Remittance discount
He pointed out that the Central Bank can provide a major source of protection for the Iraqi government if it needs some financial supplies by deducting remittances from government banks, noting that the financial situation the country is experiencing is one of the most prosperous years in terms of foreign exchange reserves.
He pointed out that this contributes to reassuring foreign investors and providing a safe investment environment and maintaining the fixed parity rate that Iraq adopts for the dinar against the dollar, noting that the monetary stability of any country is a very important goal in attracting and reassuring foreign investors, in addition to its work in promoting local investment, especially since the Central Bank has initiatives, especially those related to housing and sustainable development movement initiatives.
Third place
Al-Marsoumi stated that Iraq’s ranking third in the Arab world in terms of foreign exchange reserves is extremely important, for economic reasons, most notably, helping to maintain the value of the local currency at a fixed price, and maintaining liquidity to meet international financial obligations, in addition to financing domestic projects and reassuring investors, not to mention diversifying investment portfolios.
Financial stability
For his part, the economic researcher, Imad Al-Muhammadawi, considered the cash reserve of any country to be a source of financial stability and a buffer against any financial storms that the economy might face, noting that it avoids financial pressures and stimulates sustainable development.
He pointed out that cash reserves are defined as funds that can be kept to confront crises and meet needs, without the need to borrow, in addition to helping in preparing flexible financial strategies that enable the country to carry out projects with flexibility and confidence, noting at the same time the necessity of diversifying sources of income and not keeping oil as a primary source of income to increase reserves and achieve sustainable development that serves the interests of Iraq and its people.
It is noteworthy that the cash reserve is defined as the total deposits and bonds of foreign currencies held by the central banks and monetary authorities in the country, in order to support the local currency and pay the debts owed by the country. The cash reserve usually consists of several elements, which are foreign currencies, such as the dollar, the euro, the Japanese yen and other currencies, or what the central banks own of gold.
Finance confirms its commitment to adopting digital transformation in transactions
The Ministry of Finance stressed, on Thursday, the importance of adhering to the recommendations of the Council of Ministers to develop financial and banking performance, as well as emphasizing the acceleration of adopting modern electronic systems in the ministry’s formations.
The ministry said in a press statement received by Shafaq News Agency, “The Minister of Finance, Taif Sami Muhammad, held a periodic meeting of the Ministry’s opinion body, in the presence of the Undersecretary of the Ministry and the general managers of the departments, banks, bodies and affiliated companies.”
The statement added that “the meeting addressed several important topics, most notably reviewing the recommendations of previous committees, evaluating the progress made in implementing the recommendations of the committees formed by the Opinion Authority in previous sessions, and determining the rates of achievement and potential obstacles.”
He added, “The meeting also discussed the proposed amendments to improve the performance of the ministry’s departments and adapt them to the requirements of modern financial management, in line with developments in the financial and business sector. In addition, the minister stressed the importance of adhering to the recommendations of the Council of Ministers and continuing efforts to provide the necessary capabilities within the framework of the government program to develop financial and banking performance.”
The meeting stressed, according to the statement, “the need to accelerate the adoption of modern electronic systems in the ministry’s formations, especially in strategic sectors such as banks, customs, and taxes, with the aim of improving work efficiency and providing better services to citizens.”
