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Wednesday, December 17, 2025

HANTOUSH: INTERNATIONAL FINANCING DIFFICULTIES AND EXCHANGE RATE CHALLENGES THREATEN THE STABILITY OF THE IRAQI ECONOMY

 HANTOUSH: INTERNATIONAL FINANCING DIFFICULTIES AND EXCHANGE RATE CHALLENGES THREATEN THE STABILITY OF THE IRAQI ECONOMY

Economic and banking expert Mustafa Hantoush confirmed on Thursday that Iraqi companies and the private sector are facing significant difficulties in obtaining international loans to finance major projects due to Iraq’s low credit rating and the high costs of guarantees and interest rates on foreign loans.

Hantoush added, in a statement to Al-Maalouma, that “the Iraqi banking system is going through a difficult period, with the possibility of several banks exiting the market, which limits the ability of domestic financing to cover major projects.” He pointed out that “international financing depends heavily on sovereign guarantees provided by the state, which remain limited in Iraq.”

He noted that “the cost of external financing has risen significantly, with interest rates increasing from 5% to approximately 8-9% due to the risks associated with Iraq’s credit rating, placing additional burdens on Iraqi investors.”

Regarding the dollar exchange rate, which has reached 2,000 dinars, Hantoush affirmed that “Iraq is experiencing relative monetary stability, and the Central Bank has no intention of changing the exchange rate at present, despite speculation about the incoming government’s intentions in this regard.”
He warned that any “exchange rate adjustment without addressing the root causes of the country’s financial problems would be a half-measure, potentially leading to widespread negative consequences, including increased poverty rates and a decline in the value of salaries, thus exacerbating the suffering of large segments of the popula

tion.”

He explained that “Iraq possesses substantial resources in the form of government assets estimated at hundreds of billions of dollars, in addition to vast tracts of land and real estate, but the weakness in combating corruption and activating tax collection hinders the effective utilization of these resources.”
He pointed out that “seriously confronting corruption and activating domestic revenues could reduce the need to adjust the exchange rate or resort to temporary solutions that could harm the economy and society.”

He also noted the existence of “huge amounts of cash held in homes, estimated at 70 to 80 trillion dinars, which have contributed to speculation in the real estate market and an unjustified rise in prices, necessitating a sound monetary policy to control the markets.” He concluded by emphasizing that “the continuation of the current situation without genuine reforms will lead to a deterioration of economic and social conditions, with increased poverty rates and greater pressure on salaries and market liquidity.”


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