The Central Bank reveals the value of the cash reserves that Iraq possesses
Baghdad-Mil
The Governor of the Central Bank, Ali Al-Alaq, revealed today, Wednesday, the value of the cash reserves that Iraq possesses.
Al-Alaq said during the second day of the “Miri 2024” forum in Erbil, which was followed by “Mil”, that “the role of the Central Bank cannot be reduced by looking at the currency selling window only,” stressing that “the Central Bank represents a fundamental pillar of economic and financial stability in the country.”
He added, “Iraq started in 2003 with reserves of nothing,” adding, “We now have more than 100 trillion dinars in circulation, and foreign currency reserves exceed 140% of the issued currency, which constitutes a great guarantee for monetary stability.”
Al-Alaq continued: “We have licensed 16 companies for electronic payment, and the Central Bank is working on licensing digital banks,” noting that “the Central Bank is establishing a national company that will organize electronic payment, using the best technologies and methods, and it has reached advanced stages.”
He explained: “We have a plan to reform government banks and a plan to reform private banks. In the coming year, we will witness major transformations in government banks and their restructuring, or as for private banks, their licenses will be re-established according to the foundations and standards of governance and transparency and will be consistent with international standards.”
Al-Alaq said that “about 40% of the banks in the world play a direct role in stimulating the economy, and Iraq is among these banks,” noting that “confronting the financial deficit in the budget is through public debt, and this matter requires control coming from the structure of the state’s public finances.”
He pointed out that “it comes from the deficit, and the large deficit in the budget comes from the continuous increase in expenditures that is not matched by growth in revenues, especially local revenues.”
Al-Alaq pointed out that “there are now binding and inflexible expenses in the state’s general budget, and Iraq still depends on oil revenues to cover its expenses almost entirely, and any fluctuation in the price of oil affects the coverage of expenses,” according to Al-Alaq, who saw that this “indicates the existence of a structural defect in the structure of the Iraqi economy.”
As for inflation, he said that “it was about 7.5% in 2023, so the bank had to work on withdrawing part of the money supply to reduce inflation.”
Al-Alaq added, “In 2020, the size of the money supply was 46 trillion dinars, and it jumped at the end of 2023 to 100 trillion dinars .”
The Central Bank Governor stated that “the level of the money supply did not increase during the year, and remained the same, and this indicates that this interest has achieved its goal,” revealing that “the external debt is less than 20 billion dollars.”
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