Iraq’s Central Bank reports growth in gold reserves, low inflation, 30 DEC

Iraq’s Central Bank reports growth in gold reserves, low inflation

Shafaq News/ Iraq’s Central Bank (CBI) announced significant growth in its gold reserves, describing the country’s inflation rates in August and September 2024 as among the lowest in the region.

In a statement outlining third-quarter economic indicators, the Central Bank attributed the positive developments to its monetary policies implemented throughout 2024.

The bank reported a 57% increase in gold reserves, which reached 16.8 trillion dinars in the third quarter, compared to 10.7 trillion dinars during the same period in 2023. 

It also noted that Iraq’s annual inflation rates were 3.7% in August and 3.1% in September, reflecting what the bank called “price stability and effective monetary policy.”

“Total deposits in Iraqi banks grew by 4.2% in the third quarter of 2024, amounting to 127.6 trillion dinars compared to 122.4 trillion dinars in the same quarter of 2023. Credit extended by public banks rose by 11.6%, reaching 72.7 trillion dinars, up from 65.1 trillion dinars a year earlier.” CBI said.

Private banks also saw notable growth, with deposits “increasing by 14% to 18.7 trillion dinars and credit rising by 15.1% to 12.2 trillion dinars.” 

“These figures reflect growing trust in private banking institutions.”

In addition, deposits from the private sector increased by 3% to 56.1 trillion dinars, while credit extended to the sector grew by 8.6%, reaching 42.8 trillion dinars in the third quarter of 2024.

The Central Bank reported a 4.1% increase in narrow money supply, which totaled 158.6 trillion dinars, compared to 152.4 trillion dinars in 2

The bank highlighted the growth in reserves and credit as indicators of economic stability and increased confidence in the financial sector.

Shafaq.com

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 [via Judy Byington] 

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Expert: Central Bank decisions threaten banking sector and stability of national economy, 30 DEC

 Expert: Central Bank decisions threaten banking sector and stability of national economy

Researcher and specialist in financial and banking affairs, Mustafa Hantoush, confirmed today, Monday, that the decisions of the Central Bank threaten the banking sector and the stability of the national economy.

Hantoush said in a statement to Al-Maalouma Agency that "the recent decisions of the Central Bank of Iraq, which included stopping the financial transfer platform (FITR) and handing over the management of the Iraqi dollar to four banks owned by investors, some of which belong to countries such as Jordan and the Gulf, constitute serious repercussions.”

He pointed out that "these policies may lead to the collapse of the Iraqi banking system and the exacerbation of economic crises, noting that more than 100,000 jobs in the private banking sector are threatened with loss in favor of foreign banks, which constitutes a major blow to banking autonomy.”

He explained that "the monopoly of the dollar by these banks will lead to difficulty in stabilizing the exchange rate and increasing volatility, which will exacerbate the economic situation and weaken competition in the banking sector."

As part of the solutions, Hantoush called for "extending the work of the money transfer platform in coordination with the new US administration, and enabling Iraqi banks to open dollar accounts in international banks such as Citibank and JP Morgan, as is the case in the countries of the region."

He also stressed the "importance of transparency and announcing the mechanisms of cooperation with Ernst & Young regarding transfers in other currencies such as the euro, yuan and dirham, in addition to revealing the results of the contract with Oliver Wyman regarding the status of the 28 sanctioned Iraqi banks."

At the end of his statements, Hantoush called for “addressing the central banks of countries such as Turkey, the Emirates, China and India to open branches of Iraqi banks in those countries, which would contribute to transforming the banking relationship from remittances to a direct commercial partnership. link

NADER FROM MID EAST CC HIGHLIGHTS NOTES, 30 DEC

 NADER FROM MID EAST CC HIGHLIGHTS NOTES

Summary

In a recent statement, the Central Bank of Iraq announced a series of positive financial indicators for the third quarter of 2024, showcasing a robust growth trajectory compared to the same quarter in 2022 and 2023. This growth is attributed to the successful monetary policies implemented throughout 2024.

 Key highlights include a 4.2% increase in total bank deposits, rising to 1,276 trillion Dinars, and an impressive 11.6% growth in cash credit from public banks, reaching 792.7 trillion Dinars. 

Private banks outperformed with a 14% rise in deposits and a 15.1% increase in cash credit, reflecting growing confidence among economic units in the private banking sector. The private sector also saw a 3% increase in deposits and an 8.6% increase in cash credit, signifying a strong trust in banking institutions. 

The money supply metrics indicated a healthy economy, with narrow money growing by 4.1% and broad money by 3.3%. Significantly, gold reserves surged by 57%, bolstering the Central Bank’s financial standing. 

Furthermore, Iraq’s inflation rates remain relatively low, with figures recorded at 3.7% and 3.1% for August and September 2024, respectively, pointing towards price stability and effective monetary management.

Highlights

• 📈 Total Deposits Growth: Total deposits in Iraqi banks rose by 4.2%, reaching 1,276 trillion Dinars in Q3 2024, up from 122.4 trillion Dinars in Q3 2023.
• 💰 Public Bank Cash Credit Surge: Cash credit granted by public banks grew by 11.6%, totaling 792.7 trillion Dinars in Q3 2024, compared to 65.1 trillion Dinars in the previous year.
• 🏦 Private Bank Performance: Deposits in private banks increased by 14%, amounting to 18.7 trillion Dinars, and cash credit saw a 15.1% rise, highlighting the sector’s strength.
• 📊 Private Sector Confidence: Private sector deposits grew by 3%, totaling 56.1 trillion Dinars, and cash credits rose by 8.6%, indicating enhanced trust in banking institutions.
• 💵 Money Supply Indicators: The narrow money supply grew by 4.1% to 158.3 trillion Dinars, while broad money supply rose by 3.3% to 179.1 trillion Dinars, reflecting economic stability.
• 🪙 Significant Gold Reserves Increase: Gold reserves increased by 57%, amounting to 16.8 trillion Dinars, strengthening the Central Bank’s financial position.
• 📉 Low Inflation Rates: Annual inflation rates recorded at 3.7% and 3.1% for August and September 2024, respectively, demonstrating effective monetary policy and price stability.

Key Insights

• 📈 Growth in Deposits Signifies Economic Trust: The 4.2% growth in total bank deposits reflects a growing confidence among consumers and businesses in the Iraqi banking system. This increase indicates that individuals and companies are saving more, which is crucial for the financial health of the banking sector and the broader economy. A stable deposit base enhances banks’ ability to lend, thus fostering economic growth.

• 💹 Public and Private Bank Performance as Economic Indicators: The substantial growth in cash credit from both public (11.6%) and private banks (15.1%) indicates an upward trend in lending activities, which can stimulate investment and consumption. The disparity in growth rates also highlights the competitive nature of the banking sector, with private banks gaining a larger share of the credit market.

• 💼 Private Sector’s Confidence in Banks: The 3% growth in private sector deposits, alongside an 8.6% increase in cash credit, underscores an evolving trust in private banking institutions. This trend can lead to enhanced business operations as companies feel more secure in their financial dealings, fostering innovation and expansion.

• 💵 Money Supply Growth as a Stability Indicator: The increases in narrow and broad money supply (4.1% and 3.3% respectively) are indicative of a stable economic environment. A growing money supply can facilitate increased spending and investment, which are essential for economic expansion. However, it’s crucial to monitor the pace of this growth to prevent potential inflationary pressures.

• 🏆 Gold Reserves as a Financial Safety Net: The remarkable 57% growth in gold reserves signifies the Central Bank’s commitment to maintaining a robust financial buffer. Gold serves as a hedge against economic volatility and currency fluctuations, enhancing the overall stability of the Iraqi financial system. This increase may also bolster investor confidence in the Central Bank’s management of the national economy.

• 📊 Controlled Inflation as a Success Metric: The reported inflation rates of 3.7% and 3.1% for August and September 2024 are low compared to regional standards, suggesting that the monetary policies in place are effectively controlling price levels. This stability is fundamental for economic growth, as businesses and consumers can plan their finances with greater certainty.

• 🔄 Monetary Policy Effectiveness: The overall positive trends in bank deposits, cash credit, and inflation rates underscore the effectiveness of the monetary policies adopted by the Central Bank of Iraq. These policies seem to be successfully fostering a conducive environment for economic growth and stability, which is essential for attracting both domestic and foreign investments.

In summary, the Central Bank of Iraq’s recent report highlights a period of significant financial growth and stability, suggesting a favorable economic outlook for the country. The encouraging trends in banking metrics, combined with low inflation rates and increasing gold reserves, paint a picture of a resilient economy navigating through challenges with a strategic monetary policy approach.

🚨 Breaking News: U.S. Greenlights Iraq's International Status! 💵

Uncertainty over the 2025 budget.. Parliament: We don't know anything about it yet, 30 DEC

  Uncertainty over the 2025 budget.. Parliament: We don't know anything about it yet

 Member of Parliament Ahmed Al-Sharmani explained Thursday (December 26, 2024), that Parliament does not know anything about the 2025 budget schedules, suggesting that the government is deliberately delaying sending it.

Al-Sharmani said in an interview with "Baghdad Today", "According to the Financial Management Law, the budget or its schedules must reach the House of Representatives at the end of the month (10) of each year, and any delay in doing so is considered a legal violation, especially since this violation has been repeated for many years."

He explained that "the 2025 budget tables are not known to the House of Representatives so far, and the delay in sending them is a violation, and there is no specific date for sending those tables. "

Al-Sharmani added, "Perhaps the government will link sending the tables with amending the law proposed in Parliament, and this will delay sending the tables for a long time due to disagreements over the origin of the amendment."

MP Jawad Al-Yassari confirmed on December 19, 2024, that political differences over amending the budget law will delay voting on the 2025 budget schedules, indicating that “the Iraqi government is waiting for Parliament to amend the budget law, so that it can send it the schedules for 2025 according to the amendments.”

It is noteworthy that Member of Parliament Mustafa Al-Karaawi announced on December 8, 2024, the postponement of the second reading of the amendment to the General Budget Law until after the legislative holiday.  link