Al-Nusairi: No sanctions on Iraqi banks and false reports cause panic
Economy News – Baghdad
Advisor to the Association of Iraqi Private Banks, Samir Al-Nusairi, confirmed that there are no sanctions on Iraqi banks, stressing that the US Treasury Department and the US Federal Bank have not issued any decisions to impose new sanctions, and that the information circulating in this regard is inaccurate and aims to create confusion in the Iraqi market.
Al-Nusairi said in an interview with the “Rudaw” media network, followed by “Economy News”, “There are no sanctions and no sanctions have been issued, and the proof is the statement of the Central Bank of Iraq issued yesterday, which clarified the results of its talks with the US Treasury Department and the US Federal Bank, in the presence of international auditing and consulting companies operating in Iraq, on which the meeting was held in Dubai.”
The Advisor to the Association of Private Banks said that “the official statement issued by the Central Bank of Iraq must be adopted, because it emphasizes the transparency of the Central Bank of Iraq, as well as the transparency of international financial and audit organizations and institutions, including the US Treasury Department and the US Federal Bank.”
He pointed out that “this statement included praise from the US Treasury Department and the US Federal Bank for the development of the monetary dollar distribution system in Iraq, according to the mechanism developed by the Central Bank of Iraq in 2024, which proved its effectiveness in reducing the manipulation and smuggling of the dollar, and was classified as one of the globally advanced systems.”
Updating external transfer mechanisms and market control
On the mechanisms of external transfers, Al-Nusairi explained that the Central Bank of Iraq “has achieved a qualitative shift in external transfer operations, as a new mechanism has been working since January 1, 2025 based on opening accounts for Iraqi banks with international correspondent banks in America and China, instead of the previous electronic platform.”
Al-Nusairi criticized the non-competent media and non-specialist analysts who published misleading information about the alleged sanctions on Iraqi banks, saying: “The heads of citizens were shocked two days ago with incorrect claims that there are sanctions on five Iraqi banks, and that the number of punishing banks will reach 37 banks, but they went so far as to promote false information about punishing Rafidain Bank, without relying on any official source.”
“The official source in Iraq is the Central Bank of Iraq, in addition to the companies and consulting and auditing organizations that we deal with, and our ongoing relations with the US Treasury Department and the US Federal Bank,” he considered.
The Central Bank of Iraq denied yesterday that Iraqi banks were subjected to international sanctions, calling for “the adoption of official channels to know the latest news”, after media reports stating the intention of the US Treasury to impose sanctions on five Iraqi banks, without specifying their names.
Reforming the banking sector and compliance with international standards
The methodology of financial and banking reform pursued by the Iraqi government and the central bank is proceeding according to a fixed plan, Al-Nusiri said, adding: “There are no banks that are punished, and the US Treasury Department has not announced any Iraqi banks covered by sanctions.”
He stressed: “The Central Bank of Iraq is the entity responsible for protecting the financial system in Iraq, and any decision issued by any international body, whether from the US Treasury Department, the US Federal Bank or any other organization, regarding the punishment on any bank, the Central Bank of Iraq will immediately take measures to stop it, transfer this punishment and stop its dealings.”
“Protecting the Iraqi financial system is a major priority for the Central Bank and the government, and cannot be compromised,” he added.
Number of banks covered by dollar restrictions
He mentioned the number of banks that have been restricted by the use of the dollar by 28 since 2022, 2023 and 2024, in addition to 4 banks punished by the US Department of the Treasury (OFAC), bringing the total number of 32 banks, “all of which have been audited by international consulting companies such as Ernst & Young, Kito, Oliver and Wyman, and none of them have been proven to violate instructions or deal with countries subject to sanctions.”
In March last year, the Central Bank of Iraq and the US Treasury agreed to reconsider the sanctions imposed on Iraqi banks, according to a statement issued by the bank at the time.
The agreement came after Iraq demanded in February that the United States of America reconsider the imposition of sanctions on 21 Iraqi banks, pointing out that the reasons behind the imposition of such sanctions were not explained.
But “Iraqi banks restricted from dealing in the dollar are currently working to correct their conditions and adhere to international standards, which was praised by the US Treasury Department and the US Federal Bank during the last meeting,” the advisor to the Association of Private Banks said.
The American measures led to the decline in the value of the Iraqi dinar against the dollar, as the official exchange rate is 1320 dinars per dollar, while it is traded in the parallel market by about 1,500 dinars.
A new mechanism for external transfers according to international standards
Advisor to the Association of Private Banks, noted that the Central Bank of Iraq “has moved since January 1, 2025 to a new mechanism in foreign transfers, where the operations take place directly between the bank, which has a correspondent bank and the correspondent bank itself, while regulatory authorities, such as the US Federal Bank and the US Treasury Department, audit remittances after sending them, and not before that as it was previously applicable.”
He explained that “the central bank no longer carries out executive procedures for remittances, but its role has become focused on economic stability and monetary policy, in accordance with international standards and with high transparency, which strengthens the pillars of monetary policy.”
The Iraqi economy has moved from the stage of “fragility”
Al-Nusairi touched on the strength of the Iraqi economy, noting that “the Iraqi economy has moved according to World Bank and IMF reports from the stage of fragility to the stage of recovery, and these are international reports based on transparent and accurate data.”
In response to a question about the availability of the dollar to traders, the advisor of the Association of Private Banks said that “the dollar is available to all merchants and companies in Erbil, Sulaymaniyah and all governorates of Iraq, according to legal banking procedures, but any trader who has not registered his company or works in retail trade without complying with banking standards will be legally held accountable.”
He stressed that “the Iraqi dinar will regain its strength and the exchange rate will return to balance sooner or later, but this depends on completing the methodology of financial and banking reform, and addressing the issue of the remaining monetary use of the dollar in the market.”
Regarding the strength of the local currency and the amount of liquidity, he explained that “the Iraqi dinar is supported and completely covered in the US dollar, with a cash reserve exceeding 117 billion dollars, while the local liquidity exported exceeded 100 trillion dinars, which means that the Iraqi economy is solid and sober, despite regional and global political and security challenges.”
Reform and reduction of the number of banks
At the end of his speech, Al-Nusairi pointed out that “Iraq currently has 72 private banks and 7 government banks, but there are plans to reform the banking sector in cooperation with international consulting companies such as Ernst & Young and Oliver Wyman, which may lead to reducing the number of banks and integrating some of them to make the final number more in line with the size of the Iraqi economy.”
He explained that “the number of banks may decrease to 40 banks or less, so that it corresponds to the actual needs of the Iraqi market.”
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