LIQUIDITY CRISIS IN IRAQ IS “WORSENING”.. 70% OF MONEY IS HOARDED IN HOMES 23 JAN

 LIQUIDITY CRISIS IN IRAQ IS “WORSENING”.. 70% OF MONEY IS HOARDED IN HOMES

The head of the Diyala Chamber of Commerce, Muhammad Al-Tamimi, confirmed today, Friday (January 17, 2025), that the liquidity shortage crisis in Iraqi financial institutions is becoming more complicated, attributing the reason to the hoarding of 70% of money inside homes and the lack of interaction of large segments of society with the banking system.

Al-Tamimi said in an interview with Baghdad Today, “The lack of liquidity is something we expected two years ago, and we warned about it repeatedly, especially with citizens continuing to hoard money inside their homes instead of depositing it in government or private banks, in addition to the absence of real investments for frozen money.”

He added, “The current situation requires a clear government roadmap that includes incentives to encourage citizens to deposit their money in banks, and to mobilize the hoarded funds through investment projects capable of attracting companies and businessmen to participate.”

He pointed out that “the state has great financial capabilities, but the liquidity crisis will increase with time if serious steps are not taken. Among them is the actual implementation of the Cabinet’s decision to move to electronic payment in markets and economic activities, which will combat smuggling and limit the circulation of counterfeit money.”

Al-Tamimi stressed that “implementing this decision will contribute to solving no less than ten problems that the Iraqi markets and economy suffer from, provided that the chambers of commerce are supported with the appropriate tools to implement the decision and provide high flexibility in the procedures to encourage citizens to interact with these mechanisms, which will achieve great economic gains.” Earlier today,  economic affairs expert Alaa Al-Fahd revealed the reason for the recent increase in gold imports into Iraq.

Al-Fahd told Baghdad Today, “The increase in gold imports has several economic implications, including that citizens are working to keep gold as part of their savings, as it is more reliable and stable, as a result of the fluctuations in the dollar.”

He explained that “the other reason is an improvement in income levels with a savings surplus, and this is what drives citizens to buy gold, and this is part of the positive situation, as the process of increasing gold imports is a healthy economic situation, and this is reflected in the Iraqi market.”