Mawazine News – Baghdad
Economic expert Abdul Karim Al-Issawi said: “Today, in fact, the Central Bank of Iraq has already moved to the stage of direct relations with correspondent banks, and it is in the experiment stage while monitoring the changes that occur in all the process for the purpose of fortifying the transformation.
Al-Issawi told Mawazen News: The platform was aimed at enhancing transparency and ensuring compliance with international laws, especially with regard to combating money laundering and terrorist financing.
He pointed out that:
**Potential benefits:
1. *Facilitating transfers*: Direct relationships may make transfers faster and more flexible.
2. *Reduce remittance costs*: Relying on a platform may require additional costs that may be retreated with the new system.
3. *Enhancing international confidence*: If these relations are well managed, it may help boost the confidence of the international community in the Iraqi banking system.
As for the potential challenges: “
1. Compliance risks: Easing controls can increase the risk of money laundering and terrorist financing, which could damage Iraq’s reputation internationally.
2. Complexity of banking operations: Some banks may face difficulties in managing complex international relations directly without mediation from the central bank.
3. Impact on monetary policy: The central bank may lose some control over external money flows, which may affect monetary policy.
It is important that this transition (if it takes place) takes place gradually and deliberately, while ensuring that strong control mechanisms are in place to ensure that the Iraqi banking system is not exploited for illicit purposes.
The final decision will require a balance of benefits and risks, and will certainly have a significant impact on the Iraqi economy and international relations.
The economist stated that the Central Bank of Iraq is negotiating with the US Federal Reserve regarding the termination of the electronic platform for foreign transfers and replacing it with direct banking relations between Iraqi banks.
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