CBI SIGNIFICANT REFORMS, 11 JAN

 CBI SIGNIFICANT REFORMS

The Central Bank of Iraq has implemented significant reforms in its foreign transfer mechanisms to modernize and align with international banking standards:

1️⃣ Closure of the Electronic Platform:

• The platform, used to ensure transparency and prevent money laundering, was retired on December 31, 2024.

• This change reflects a transition to more efficient direct relationships between Iraqi banks and international correspondent banks.

2️⃣ Improved Mechanisms:

• Iraqi banks can now conduct foreign transfers using non-American correspondent banks in countries like China, Turkey, the UAE, and Europe, reducing dependency on U.S. banks.

• This approach enhances operational fluidity and expands the number of Iraqi banks participating in foreign transactions.

3️⃣ Exchange Rate Stability:

• The parallel exchange rate does not reflect market conditions but is controlled by the Central Bank.

• Official dollar sales support legitimate purposes, such as imports and personal transfers, ensuring price stability with inflation at 3.1%, below regional averages.

4️⃣ Economic Implications:

• These reforms aim to strengthen Iraq's financial infrastructure, improve global integration, and curb black-market speculation.

• The Central Bank ensures compliance with international laws and secures foreign currency for national and citizen needs.

The reforms implemented by the Central Bank of Iraq represent a significant step forward in modernizing the country's financial system and aligning it with international standards. By streamlining foreign transfer mechanisms, reducing dependency on specific banking systems, and ensuring exchange rate stability, Iraq is building a more resilient and transparent financial infrastructure. These measures not only foster trust in the Iraqi dinar but also create a strong foundation for sustained economic growth, enhanced global integration, and improved financial opportunities for both businesses and citizens. The Central Bank’s proactive approach demonstrates a commitment to economic stability and progress, paving the way for a more prosperous future.