Iraq agrees to open another bank in the US to establish relations with its banks in transfer operations.
The Governor of the Central Bank of Iraq, Ali Al-Alaq, revealed an agreement to establish another bank in the United States to establish relationships with Iraqi banks for money transfer operations.
The Governor of the Central Bank of Iraq said in an interview followed by (Al-Rabia) that he “has begun work on developing a plan to issue cards for small traders, after completing consultations with companies, so that it can accommodate the requests of traders – a large class in Iraq – to cover their foreign trade without passing through long paths, so that transfers are made directly, which will create a major shift in accommodating traders who do not use the official methods of transfer.”
He indicated that the Central Bank of Iraq, in agreement and consultation with the Treasury and the Federal Reserve, had completed the organization of cash dollar sales operations, and that they were now “in an ideal position, by their own testimony.”
The rise in the value of the national currency has local and international causes.
The Iraqi dinar’s exchange rate against the US dollar has witnessed a significant improvement over the current period, supported by a number of internal and external factors. Most notably, the country’s large financial reserves, the prudent monetary policies pursued by the Central Bank of Iraq, and signs of a thaw in US-Iranian relations have combined to boost the value of the national currency.
Deputy Governor of the Central Bank of Iraq, Dr. Ammar Hamad, said that the improvement in the Iraqi dinar’s exchange rate against the dollar in local markets is due to the central bank’s recent policy.
financial reserves
He added that the country’s massive financial reserves are one of the main reasons behind the improvement in the value of the dinar against the dollar, and we expect the dinar’s value to continue to improve in the coming period. He pointed out that the Central Bank of Iraq is working to consolidate the national currency by adopting policies that are consistent with Iraq’s financial capabilities and the requirements of the national economy.
dollar flow
Dr. Nabil Al-Abadi said: “The past few days have witnessed a significant improvement in the exchange rate of the dinar against the dollar, which is the result of a combination of internal and external factors. On the monetary policy side, the Central Bank has taken strict measures, including restricting the flow of dollars through auction platforms and imposing strict oversight on banks. It has also raised the interest rate on dinar deposits, which has stimulated the transfer of some cash liquidity. External factors, such as the improvement in oil prices and the accompanying increase in foreign reserves, have also contributed to this improvement.”
Stabilization
He added that these measures, while effective in achieving short-term stability, remain subject to several risks. The Iraqi economy’s dependence on oil revenues makes it hostage to global market fluctuations. Furthermore, some austerity measures, such as import restrictions, could negatively impact citizens’ purchasing power if they are not accompanied by policies that support local production.
productive sectors
He stated that ensuring the sustainability of this improvement requires structural reforms, starting with diversifying the economic base and reducing dependence on oil, through developing productive sectors such as agriculture and industry. This also requires a comprehensive overhaul of the banking system and simplifying customs procedures to boost non-oil exports, as well as enhancing investment confidence through stabilizing legislative policies.
He stated that improving the exchange rate is not an end in itself, but rather must be a starting point for deeper economic reform. International experience demonstrates that sustainable monetary stability can only be achieved through a productive economy capable of confronting external shocks.
global pressure
Financial expert Dr. Mustafa Akram emphasized that while there is a reason for the gap between the official exchange rate and the parallel exchange rate of the dinar against the dollar, the gap has its causes. He pointed out that the opening up between the United States and the Islamic Republic has eased global pressure on remittances to Iran, reducing demand for the dollar in local markets and strengthening the value of the national currency. This coincides with ample supply from the Central Bank in the form of remittances and other forms of financing, which necessitates strengthening this phase.
electronic card
He pointed out the importance of the Central Bank of Iraq taking action to reach an agreement with the United States and establish an official platform for transactions by creating an electronic payment card for use in Iran, Russia, and other sanctioned countries. This would reduce demand for dollars, he noted, noting that this would serve small traders and travelers, address many problems, reduce smuggling and illegal trade, and increase the value of the local currency.
An expert calls on the government to diversify funding sources and establish a sovereign fund.
Economic expert Rashid Al Saadi called on the government, on Sunday, to seriously consider finding non-oil financial resources to support the general budget, stressing the importance of establishing a sovereign fund aimed at supporting future generations.
Al-Saadi confirmed in a statement to Al Furat News Agency that “the government’s steps to support the private sector remain modest despite its relentless efforts in this direction,” noting that “there is an urgent need for practical, applied steps to support the private sector, especially with regard to the dealings of bureaucrats.”
The economic expert criticized what he described as “the lack of a professional culture among some officials,” noting that “quotas play a role in appointing incompetent individuals to certain positions.”
Al-Saadi stressed the need for the government to pay greater attention to diversifying the country’s sources of income and moving away from its total dependence on oil. He asserted that establishing a sovereign wealth fund represents a vital step toward ensuring the future of future generations and the sustainability of the national economy.
Central Bank of Iraq and Securities
The number of banknotes issued by the Central Bank during January 2025 amounted to 6 billion banknotes, with a value of 100.3 trillion Iraqi dinars, an increase of 4.7% compared to January 2022, when the number of banknotes issued amounted to 5.7 billion banknotes, with a value of 78.2 trillion dinars.
The largest increase was in the 50,000 denomination, whose numbers increased by 167% to reach 792 million banknotes, compared to 295 million banknotes issued in January 2022.
As for the 5,000 dinar category, the number issued decreased by 22%, falling to 754 million notes, compared to 973 million notes in January 2022.
The number of notes in the 10,000 dinar category also decreased by 10%, as did the 25,000 dinar category, which decreased by 1.65%.
The 25,000 dinar category still holds the largest share of banknotes at 32%, followed by the 10,000 dinar category at 13.5%, and then the 250 dinar category at 13.44%.
PM Stresses the Importance of the Project Financing Initiative and its Effective Impact on Industrial Sector Growth
Prime Minister Mohammed Shia al-Sudani stressed on Monday the importance of the Project Financing Initiative and its effective impact on the growth of the country’s industrial sector. He noted that launching initiatives must be credible, through the provision of the necessary infrastructure.
The Prime Minister’s Media Office stated in a statement received by the Iraqi News Agency (INA), that “Prime Minister Mohammed Shia al-Sudani chaired a meeting to follow up on the implementation of the Industrial Project Financing Initiative and the reasons for the delay in implementing Cabinet Resolution No. 24930 of 2024.”
“The meeting witnessed a detailed discussion of the overall dimensions of the initiative, and its beneficiaries. Effective solutions were reached to ensure the sustainability of project support, including providing the necessary funding to launch project lending through the Industrial Bank and inviting industrialists to begin promoting their completed projects.”
According to the statement, the Prime Minister emphasized “the importance of the project financing initiative and its effective impact on the growth of the country’s industrial sector,” noting that “launching initiatives must be credible, through the provision of the necessary infrastructure for regulation, financing, and implementation. Failure to implement these initiatives will impact the development process.”
The Prime Minister emphasized “the government’s support for the private industrial sector, giving it priority in attention and support, and facilitating procedures and financing, which constitutes a foundation for advancing economic development, providing job opportunities for youth, and achieving self-sufficiency in a number of strategic industries.”
