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FRANK26:"THE GOV STAYED BEHIND TO DEAL WITH THE MONETARY REFORM PROOF".......F26
The Governor of the Central Bank of Iraq speaks to Al-Hurra about restructuring the country's banks
The Governor of the Central Bank of Iraq, Ali Al-Alaq, revealed in an interview with Al-Hurra TV that Iraq has begun the process of “restructuring Iraqi banks” and has a broad plan to “reform the banks” by attracting strategic partners to modernize the Iraqi government banking system.
Al-Alaq confirmed that “investigations are continuing regarding the work of the violating Iraqi banks,” noting the formation of a committee with the US Treasury Department and the Federal Reserve “to correct the violations of the sanctioned banks.”
The full interview will be broadcast as part of the Iraqi program, on the Al-Hurra Iraq channel, Sunday, at 11:00 pm Baghdad time.
(THE GOV OF THE CBI IS GOING TO MAKE AN ANNOUNCEMENT TO THE IRAQI CITIZENS -F26)
Al-Alaq pointed out that “an American company has been assigned to audit the work of these banks,” and its results will be presented to the Iraqi government and the American side to take a decision on it.
In late 2022, the Iraqi banking sector adopted the SWIFT electronic transfer system with the aim of providing better control over the use of the dollar, ensuring compliance with US sanctions on Tehran, and also in order to limit the prosperity of the informal economy.
The financial standards that were adopted encouraged the emergence of a parallel market for currencies, attracting those seeking to obtain the dollar outside official channels.
The governor expressed his support for fair competition between private and government banks to diversify revenue sources, but he explained that citizens prefer to deal with government banks.
Al-Alaq stated that the Iraqi government delegation visiting Washington agreed to discuss the file of Iraqi banks punished by the US Treasury and deprived of dealing in dollars in Iraq, adding that the visit indicates his country’s connection to the United States financially and economically.
To ensure compliance with American standards regarding money laundering and sanctions on Iran, about 20 Iraqi banks were prevented from making dollar transfers, but they still operate in Iraq using the dinar.
The banking sector in Iraq has adopted an electronic platform, the aim of which is to monitor the uses of the dollar and tighten control over a thriving informal economy, while tax evasion attracts some importers and traders.
Al-Alaq spoke about Iraqi funds in the Federal Reserve, pointing out that Iraq invests its money from inside and outside the United States, noting that Baghdad’s financial relationship with Washington is “close” and characterized by “continuous coordination and understanding,” stressing Iraq’s openness and compliance with the rules of financial institutions in the world.
The governor stressed that the Central Bank closely monitors suspicious financial fraud operations and always warns against them, and pointed out that there are precise steps to prevent citizens from falling victim to financial fraud.
Regarding the government's economic priority, Al-Alaq said that reducing foreign debt is the first goal of his government, as it was able to reduce debt to reach 9 billion dollars. While the internal debt constitutes a value of 70 trillion Iraqi dinars, he also explained that the central bank was able to reduce the inflation rate from 7.5 percent to about 3.8 percent despite what he described as challenges.
Al-Alaq stressed that "the Iraqi government is focusing on the economy, services and infrastructure," stressing the need for Iraq to arrange its financial policies in a manner consistent with international financial standards to diversify sources of income.
The Central Bank of Iraq announced in a statement that it had decided, as of January, “to limit all commercial and other transactions to the Iraqi dinar instead of the dollar” inside the country.
While the dollar can be naturally withdrawn in cash from previously existing deposits in hard currency, starting in 2024, it will become necessary to withdraw every money transfer from abroad in dinars exclusively and according to the official exchange rate.
Al-Allaq heads the Iraqi delegation participating in the 2024 spring meetings of the International Monetary Fund and the World Bank Group, which will be held in Washington, D.C., until April 20.
Regarding Iraq's relationship with the World Bank and the International Monetary Fund, the governor confirmed that it is strong - as Iraq needs their efforts, coordination and consultation, revealing that Iraq is addressing the International Monetary Fund for the purpose of cooperation and providing technical support, indicating that the Fund welcomes this cooperation.
He said that a delegation from the International Monetary Fund will visit Iraq soon to start this program.
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