Baghdad/Nina/ The Central Bank of Iraq announced on Tuesday the increase in the ratio of total cash credit to total deposits for banks operating in Iraq.
A statement from the Central Bank stated that “the credit-to-deposit ratio is one of the most important indicators used to measure the liquidity of banks, as this ratio compares the volume of credit granted by banks
compared to their total deposits, as this percentage recorded an increase in the fourth quarter of 2024 of (59.3%) after it was (51.9%) in the fourth quarter of 2023.”
He added that “the rise in this percentage indicates that banks exploit the deposits of their customers effectively in making profits by granting credit, which may be part of the increase due to the increase in banks’ credit provided to the government and the centralization.” /Finished 2
Member: Today is supposed to be a big day…..watching and waiting for big news.
Member: Sending love & Tuesday blessings! Let's pray that today is everything that they are anticipating!!
MZ: We only have a little bit out of Iraq today. There are a number of people that are supposed to be traveling to Zurich….right now…
..as we speak. Including representatives from the US Treasury. We are waiting to see who hits the ground there. Its 4 or 5 o’clock over there right now so surprised I have not heard anything yet.
MZ: I have a number of contacts traveling along with attorneys and paymasters (as we speak) to Europe. So far I have identified 6 or 7 historic bond groups that are traveling for final contracts. All of this is happening today.
MZ: Watching for updates. But I don’t have anything from groups today. They are in place right now…but no update.
Baghdad-Mil Member of the Finance Committee in the House of Representatives, Hussein Mounes, revealed today, Monday, two proposals by the committee to develop the banking sector in Iraq . “Digitizing the banking system in Iraq is part of the government program voted on in the House of Representatives, so it is a necessity that must be adopted. We see that there is a major transformation and it is an opportunity to ensure the principle of transparency, limit the amounts of money and reduce banknotes. It is also a necessity that must be taken into account, given that there is a global trend in the issue of digitization and the adoption of bank transfer companies ,” Mounes said in a statement followed by “Mil”.
He pointed out that “the Financial Committee is following up on the financial digital transformation process and is in contact with the Central Bank to develop plans to resolve this issue,” indicating that “we have no choice as a country trying to launch its banking system but to proceed quickly and quickly to resolve matters .”
Mounes added, “The Finance Committee has two proposals: the first is to amend the law of private banks to ensure their participation and raise the efficiency of local banks, and we have a proposal to adopt the Federal Revenue Control Authority, and these two legislations are very important for developing the banking system in Iraq .”
In a recent address, Salah, the financial adviser to the Prime Minister of Iraq, emphasized the importance of transitioning from informal to formal trade mechanisms in the foreign currency market.
This transition is crucial for increasing Iraq’s foreign reserves and combating money laundering. Salah highlighted that the shift aims to reduce reliance on the parallel market, which poses several challenges due to regional geopolitical issues.
He noted that the Central Bank of Iraq’s shift away from the compliance platform has enabled a more flexible approach to financial transfers through official banking channels, with the official exchange rate set at 1,320 dinars to the dollar.
This transformation is designed to facilitate external financial transactions and improve the overall stability of Iraq’s economy.
🌍 Geopolitical Controls Impact Trade: Salah pointed out that geopolitical constraints on informal trade lead to increased reliance on official foreign currency outlets.
💵 Shift from Parallel to Official Markets: The focus is on moving away from informal financing in the parallel market, particularly in light of changing behaviors among small traders.
📈 Boosting Foreign Reserves: The transformation aims to enhance Iraq’s foreign reserves and combat illicit money smuggling.
🏦 Facilitating External Transfers: The new approach simplifies external financial transactions through Iraqi banks that maintain relationships with
international banking correspondents.
📅 End of Compliance Platform Phase: The conclusion of the compliance platform phase adopted by the Central Bank has led to greater flexibility in financial operations.
💡 Official Exchange Rate: The official exchange rate has been set at 1,320 dinars per dollar, promoting stability in foreign currency dealings.
🔄 New Financial Stage: Iraq is entering a new financial phase that promises improved financial transfers and engagement with the global financial system.
Key Insights
🌐 Geopolitical Factors Influence Financial Strategies: The geopolitical landscape significantly influences Iraq’s financial strategies. The reliance on official currency outlets is a tactical response to the challenges posed by neighboring regions. This shift indicates a broader understanding of how external factors can dictate internal economic policies and the necessity for a stable economic environment to attract foreign investments.
📊 Formal vs. Informal Markets: The transition from informal to formal markets reflects a strategic pivot that acknowledges
the risks associated with parallel markets, such as volatility and lack of regulation. By encouraging small traders to engage with official channels, Iraq aims to foster a more stable economic environment that can withstand external shocks and enhance investor confidence.
🚀 Importance of Foreign Reserves: Increasing foreign reserves is vital for Iraq’s economic stability. Reserves act as a buffer against economic shocks and are essential for international trade. Salah’s emphasis on this aspect suggests a long-term strategy to bolster national security and economic sovereignty, essential for Iraq’s recovery and growth.
🔍 Anti-Money Laundering Efforts: Salah’s comments on combating money smuggling operations highlight the government’s commitment to implementing robust financial regulations. By enhancing the monitoring of financial transactions and encouraging adherence to official channels, Iraq can work towards reducing the prevalence of illicit activities that undermine economic growth.
💱 Streamlined External Transfers: The facilitation of external transfers through Iraqi banks is a significant development. This move not only simplifies the process for traders and businesses but also integrates Iraq more closely with the international banking system. It is a step towards modernizing Iraq’s financial infrastructure and improving its global trade relationships.
🔄 Flexible Financial Transfers: The end of the compliance platform phase signifies a shift towards greater flexibility in financial dealings. This flexibility can lead to quicker transaction times and more responsive financial services, essential for businesses that rely on timely payments and currency exchanges.
🌟 Outlook for Economic Growth: With the introduction of a stable official exchange rate and a commitment to transitioning to formal markets, Iraq is positioning itself for potential economic growth. This strategic shift may attract foreign investments and facilitate trade relations, marking a significant step towards a more resilient and dynamic economy.
In conclusion, Salah’s address underscores a pivotal moment for Iraq’s economic strategy, focusing on formalizing trade mechanisms and enhancing foreign reserves. The shift from informal markets to official channels not only aims to stabilize the economy but also seeks to integrate Iraq more fully into the global financial system, setting a course for sustainable growth and development.
FRANK26: DO YOU THINK THE IMF WILL BE DOING THIS WITH THE CBI AT 1310?"........F26
Iraq discusses with the International Monetary Fund controlling expenditures and the 2024 budget
2/26/2025
The Iraqi Minister of Finance, Taif Sami, discussed with the International Monetary Fund, financial and banking reforms to support the Iraqi economy, during the periodic meetings held in the Jordanian capital, Amman.
The Iraqi Ministry of Finance said in a statement issued today, Wednesday, and received by Shafak News Agency, that the discussions focused on implementing the 2024 budget, with a review of mechanisms for controlling expenditures and enhancing the efficiency of distributing financial resources, in line with the state's economic goals.
The two parties also discussed, according to the statement, ways to improve public finances by supporting investment and directing social spending towards vital sectors, in addition to enhancing non-oil revenues and reducing dependence on oil revenues.
The meetings also included discussing banking reforms, stressing the importance of updating financial systems to keep pace with global economic changes.
It also reviewed the economic forecast for 2025 and potential strategies to increase non-oil revenues, including developing the tax system and implementing a unified accounting system.
During the meetings, Sami stressed that these meetings come within the framework of the Ministry’s efforts to enhance financial stability and achieve structural reforms that support the national economy, noting the importance of coordination with international partners and considering cooperation with the International Monetary Fund as a fundamental pillar in developing financial policies to confront current challenges.
