The Central Bank of Iraq is 77 years in the process of challenges and reforms
On 16-11-2024, the Central Bank of Iraq has been establishing and carrying out its duties for 77 years. During it, he went through stages of economic and financial challenges that faced monetary policy applications.
During those years, he was in direct confrontation with the challenges, political influences and changes in the economic systems that prevailed at the time. However, the Central Bank has proven to be a sober sovereign financial economic institution founded in 1947 of the last century.
It is competent to chart the course and policies of the applications of monetary policy and the supervision and control of the banking sector and is considered the financial advisor to the government. His role was essential in managing the economic process in Iraq and he led his management by 24 governors who were characterized by distinguished technical and administrative experiences and specifications.
After the change in 2003 and in accordance with its new law 56 of 2004 and through its management of monetary policy and achieving its goals, Iraq went through during the past 21 years an important stage of its economic system, where the change included the beginning of new applications of economic construction that adopt the construction of the introductions to the transition from the philosophy and strategies of the central economic system in managing the economy to the philosophy, strategies and mechanisms of the market economy.
Therefore, the Central Bank of Iraq has taken great development steps towards moving from banking activity to real and developmental activity, especially during the last eight years. Since the issuance of the laws regulating banking in 2004, great achievements have been made in the field of reducing the unbridled inflation that Iraq was suffering from and reaching good and advanced rates at the level of neighboring and regional countries.
Financial data and indicators also indicate that the Central Bank of Iraq has been able to maintain for several years the exchange rate of the Iraqi dinar against the US dollar in a balanced way, despite the fluctuation and variation up and down depending on difficult economic conditions and financial and economic crises due to the decline in oil prices, the war on terrorism and speculation that occurs in the markets. It also maintained the general level of prices, as it is noted that the daily intervention of the Central Bank of Iraq in the management of monetary policy instruments in light of monetary policy data and its issuance of instructions, controls,
memorandums, regulations and guidelines that are in line with international standards and the requirements of compliance and standards, anti-money laundering and terrorist financing, and the issuance of a law regulating this with No. 39 of 2015 and the liquidation of the notes diagnosed by the Financial Action Group (FATF), which transferred Iraq from the gray zone to the usual follow-up and tried to control the violations that occur by review and evaluation, and classify banks for the purposes of comprehensive value according to the (camels) system and the use of the electronic platform for the purposes of the foreign currency selling window and foreign transfers and stimulating and encouraging banks
To create new banking relations with foreign correspondent banks in order to control the movement of foreign currency and limit the disposal of it other than the specific economic objectives for monetary policy applications and achieve the arrival of 95% of external remittances with high transparency in 2024 to the last beneficiary.
As dealing with the sale of foreign currency is one of the largest open market operations in controlling the levels of local liquidity and putting the cash surplus in the proper course. It is a good economic indicator that the exchange rate is stable despite the difficult economic conditions that Iraq went through after 2014, 2020 and 2022. The Central Bank of Iraq was also able to maintain a good foreign cash reserve that currently exceeds 100 billion dollars, in addition to its gold reserves of 153 tons. Despite the conditions of recession and global economic variables, however, the reserves formed an honest cover for the Iraqi dinar by 140% in circulation and to cover foreign trade.
They also clearly contributed to covering the deficit in the general budgets as planned through the rededuction of treasury bonds issued by the Ministry of Finance and the issuance of international treasury bonds, in addition to the World Bank’s praising for the economic and financial reform programs adopted by the Central Bank in accordance with its first, second and third strategies and its expectations of good growth rates during the next year, 2025 by 5.3% for the Iraqi economy, recording progress at the level of Arab and regional countries.
A joint committee was formed between it and finance to coordinate fiscal and monetary policies. As a result, several coordination measures have been achieved. The calculated and bold economic and financial measures taken by the Central Bank and its successful experience in providing continuous support to the Iraqi economy, in addition to its initiative to revitalize the economic cycle, stimulate the economy, launch and follow up the implementation of its multiple initiatives to finance small,
medium and housing projects, launch the national strategy for bank lending in Iraq and achieve two economic and social goals at the same time, as well as taking other important measures by establishing the Iraqi Deposit Guarantee Company, which began its tasks for the purpose of restoring confidence in the banking sector and increasing the percentage of saving the monetary mass in banks at the expense of hoarding. Preparing for the launch of the financial inclusion strategy soon, which reached a year of 48%.
All this is accompanied by structural, structural and developmental developments in all the bank’s specialized and qualitative departments and focus on comprehensive quality management, institutional development, adoption of international standards, compliance rules and regulations, risk management, counter-money laundering, terrorist financing, banking awareness, technical developments in payment systems, electronic payment, information technology, and working in an accelerated manner in cooperation with the government to move from the monetary economy to the digital economy, which contributed to the transition of the policies and procedures of work in the Central Bank to an advanced stage on the pace of achieving economic, financial and banking stability, especially agreement with international consulting and auditing companies for the purpose of structuring and developing the public and private banking sector.
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Added 2024/11/24 – 10:06 AM
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