Perhaps the best word to describe the news for today is “climax”. Having the privilege of holding the Arab Summit in Iraq alone shows prestige and honors from the Arab community. This climax is in part from all the reforms necessary to satisfy their plan laid out in the White Paper implementing the Pillars of Financial Reform.
All this investment money pouring into the U.S. and Iraq from the U.S. is nothing but amazing.
Remember I always asked the question as to when will the U.S. finally step up and realize the investment potential in Iraq. Well…now is the time under President Trump.
The absence of oil and gas law is causing numerous issues between Baghdad and Erbil, and its passage would help resolve these problems, Iraqi President Abdul Latif Rashid told Al Sharq Channel.
He added that the relationship between the federal government and the Kurdistan Region is good, with ongoing meetings and negotiations aimed at resolving the outstanding disputes.
: Iraqi Presidency
SANDY INGRAM: BREAKING Iraqis are hiding billions in cash and it's hurting the economy
Summary
In Iraq, a significant portion of the country’s wealth remains outside the banking system, with only around 20 trillion Iraqi dinars actively circulating in the market out of a total 105 trillion.
This widespread mistrust in banks stems primarily from historical financial losses, scams, and a lack of faith in institutional protections. Many Iraqis prefer hoarding their money at home rather than depositing it in banks or investing due to fears of theft, fraud, unstable currency values, and prohibitive costs of starting businesses. This practice severely limits Iraq’s economic growth as large amounts of idle cash fail to contribute to rebuilding efforts, job creation, and industrial development.
Experts stress the urgent need to overhaul the banking system by implementing transparent rules, strong protections, and incentives to rebuild trust and encourage the public to participate in the financial system.
A potential solution floated is the introduction of a new currency by the Central Bank of Iraq, enabling a controlled exchange that could solve cash hoarding both domestically and abroad. Until such reforms or currency changes take place, Iraq’s economic future remains constrained by the entrenched fear and mistrust surrounding money management and banking.
Highlights
💰 Majority of Iraq’s money is hoarded at home, limiting economic growth.
🏦 Historical loss of bank deposits fuels widespread distrust in banks.
⚠️ Real fraud cases and weak legal consequences deepen public fears.
💸 Currency instability and high costs discourage investments and business startups.
🔧 Expert calls for banking reform focused on security, transparency, and incentives.
🌍 Potential introduction of a new Iraqi currency aims to resolve cash hoarding issues.
📢 Continuous monitoring and updates on economic reforms are essential for Iraq’s progress.
Key Insights
💡 Cash Hoarding’s Economic Impact: The fact that over 80 trillion Iraqi dinars are kept out of circulation reveals a critical blockage in the economy. Cash stashed away in homes is effectively removed from productive use, depriving businesses, government projects, and new industries of vital capital. This stagnation contributes to slow economic recovery and high unemployment. The idle money could otherwise stimulate investment, consumption, and public revenue. Understanding and addressing why people hold onto their currency is fundamental to reversing economic stagnation.
🏦 Trust as the Foundation of Banking: Iraq’s banking crisis illustrates how essential institutional trust is for financial systems. The trauma of losing money overnight during unstable periods, combined with real stories of scams that go unpunished, creates an environment where people refuse to entrust banks with their funds. Restoring trust requires systemic changes beyond cosmetic fixes—it demands transparency, reliable legal enforcement, and guarantees that deposits are secure. Without this, banks will struggle to attract deposits and foster investment.
⚖️ Legal and Regulatory Failures: Ahmad Allah’s story is emblematic of a larger problem—the justice system’s inability to protect victims of financial fraud. Even when culprits admit guilt, weak enforcement and lack of consequences undermine confidence. Regulatory bodies and courts must strengthen their capacity to prosecute fraud and corruption convincingly. This legal backbone needs to underpin banking reforms for the public to regain faith.
💸 Currency Volatility Discourages Deposits: Fluctuations in the value of the Iraqi dinar versus foreign currencies incentivize people to keep cash at home. When a currency loses value rapidly or unpredictably, deposits might erode in real terms, or people may fear government confiscation or devaluation. Monetary stability is crucial. The banking system must offer assurances, possibly through indexed deposits or other mechanisms, so people feel secure that their money retains value.
🏢 High Barriers to Entrepreneurship: The high cost of renting commercial spaces curtails small business development, which is vital for job creation and economic diversification. This reality intersects with financial mistrust, as even those willing to invest hesitate to start businesses due to steep upfront costs and uncertain returns. Economic reforms should tackle these financial and infrastructural barriers concurrently for maximum effect.
🔄 Currency Reform as a Game Changer: The possibility of introducing a completely new currency represents a radical but potentially effective solution. A carefully managed currency exchange window could flush out hidden cash, both inside Iraq and in foreign countries, and inject liquidity back into the formal economy. However, such a move must be accompanied by robust public communication, legal safeguards, and banking reforms to avoid repeating past mistakes.
📊 Need for Continuous Monitoring and Communication: The video stresses the importance of staying informed about ongoing reforms and policy shifts. Transparency and up-to-date information can help rebuild public confidence, ensuring people are aware of improvements and understand how their money is protected. This demands both governmental commitment and media responsibility in delivering clear, honest updates to a wary public.
In conclusion, Iraq’s economic challenges rooted in public mistrust of banks and cash hoarding are deeply intertwined with historical experiences, legal failings, currency instability, and prohibitive business costs. Addressing these issues requires a multipronged approach that combines banking reform, legal enforcement, monetary stability, and potentially a new currency.
Successfully implementing these changes could enable Iraq to unlock its idle wealth, stimulate growth, and build a more resilient financial system for the future.
FRANK26: "TRUMP FINDS EVEN MORE SECURITY & STABILITY FOR THE MIDDLE EAST FOR THE IQD"....F26
Iraq welcomes the PKK's decision to dissolve itself and lay down its arms.
5/12/2025
The Ministry of Foreign Affairs welcomed the Kurdistan Workers' Party's decision to dissolve itself, cease armed conflict, and lay down its weapons, considering it a positive and important step
that contributes to enhancing security and stability in Iraq and the region.
The Foreign Ministry said in a statement, a copy of which was received by {Euphrates News}, that "this announcement represents a real opportunity to advance peace efforts and end the protracted conflicts that have cast a shadow over the peoples of the region for decades." The statement added, "This development also constitutes a natural pretext for reconsidering the pretexts and justifications that have long been used to justify the presence of foreign forces on Iraqi soil." The Ministry of Foreign Affairs affirmed its "support for all efforts aimed at consolidating peace and stability," emphasizing "the importance of addressing security challenges through dialogue and understanding, in order to achieve the aspirations of the region's peoples for security and development.
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ISTANBUL/ANKARA, May 12 (Reuters) - The Kurdistan Workers Party (PKK) militant group, which has been locked in bloody conflict with Turkey for more than four decades, has decided to disband and end its armed struggle, group members and Turkish leaders said on Monday.
Since the PKK launched its insurgency in 1984 - originally with the aim of creating an independent Kurdish state - the conflict has killed more than 40,000 people, exerted a huge economic burden and fuelled social tensions. . LINK
Once the parallel market gap is gone and the dollar matches or better (1:1), the CBI official rate of 1320, my contact told me the “official” rate will then revalue.
My guess is it will be around 1166ish or better.
They might go straight to 1 dinar = $1 dollar even.
Was 1166 not the “official” rate of the Dr Shabibi era when in 2012 he announced the Project to Delete the Zeros was targeted for the fall of that year?
I think Ali Alaq has a better plan going, better because he can, while in Dr Shabibi era Iraq was still under sanctions.
