US urges Iraq to work with KRG to develop gas production

 ERBIL, Kurdistan Region - US President Donald Trump’s administration has urged the Iraqi government to work with the Kurdistan Regional Government (KRG) to start gas production following major gas contracts between the Kurdish government and American firms, a state department spokesperson said on Thursday. 

Two major energy contracts were signed in Washington between the Kurdistan Regional Government and US-based HKN Energy and WesternZagros on Tuesday. They were valued at a combined $110 billion over their lifespans. However, Baghdad has rejected these deals, deeming them illegal. 

“We support these deals, and we have encouraged Baghdad and Erbil to work together to get gas production to commence as soon as possible,” US State Department Spokesperson Tammy Bruce told Rudaw during a press briefing. 

She added that the “massive” deals between the KRG and US firms “will help Iraq harness its own domestic resources to become energy independent, which we've again talked about, it's really great.”

Iraq suffers from chronic electricity shortages, especially felt when summer temperatures reach scorching levels of over 50 degrees Celsius. The high temperatures subsequently lead citizens to consume very high amounts of power.

In March, the US rescinded a waiver that permitted Iraq to purchase electricity from Iran as part of President Trump’s maximum pressure campaign against Iran, which also aims to drive Tehran’s oil exports down to zero.

Iraq relies heavily on Iranian gas imports to operate its power plants. Baghdad now is seeking to export electricity from Turkey and Gulf countries. It already buys electricity from the Kurdistan Region. 

Kurdistan Region Prime Minister, who arrived in Washington on Saturday, met with US Energy Secretary Chris Wright on Thursday. The two said the meeting was very good. 

Barzani is expected to meet with US Secretary of State Marco Rubio on Friday. 

Bruce confirmed the meeting to Rudaw and said the two will “discuss expanding trade and investment between the United States and the Iraqi Kurdistan Region.”

She emphasized that Rubio has stated that Washington supports the “Kurdish autonomy” and “urged the Government of Iraq to respect this economic lifeline that is necessary to prosper and succeed.”

A2Z : The fact that bankers are reaching out to set appointments about currency and wealth management? That’s a clear sign we’re getting close to RV time

 To clarify, YES, the YouTube comment in the picture refers to our A2Z Adam Stephens. His upcoming appointment is at a regular bank—not a redemption center. He does not have an advanced-tier rating; he is still considered Tier 4B.

Today, he’ll be on a fact-finding mission to learn what the bankers are willing to say or offer. We expect he’ll report back with any insights afterward.

The fact that bankers are reaching out to set appointments about currency and wealth management? That’s a clear sign we’re getting close to RV time. They want our business!

Stay grounded. Yes, we believe this could pop at any moment and we’re watching closely. But no, we don’t know the exact timing—just like everyone else. We thought it could’ve gone overnight, and it didn’t.

Still, we are not disappointed or discouraged. Eyes forward—the next window could be opening by midday!

❤️ A2Z DREAMZ

GOLDILOCKS: Iraq and Vietnam are already set up their already "in place" digital platforms!! #iqd

 

Iraqi Dinar Hoarding "Has Reached Critical Levels"

 90 percent of Iraq’s money supply held outside banks: PM advisor

ERBIL, Kurdistan Region - Nearly 90 percent of Iraq's money supply is held outside the formal banking sector, largely hoarded in homes, a senior financial advisor to the Iraqi premier told Rudaw. The vast “leakage" of cash poses a serious challenge to the country's financial stability and long-term economic growth.

Mazhar Mohammed Salih, advisor to Prime Minister Mohammed Shia’ al-Sudani, stated that the hoarding of cash, while historically common, has reached critical levels, with leakage rates between “87 to 90 percent.”

He explained that a large portion of the currency in circulation is held outside banks.

“If, for example, we have approximately 100 trillion dinars [approximately $714.3 million] in total currency in circulation today, around 91-92 trillion dinars [approximately $657.15 million] are currently outside the banking system,” Salih elaborated.

According to senior financial advisor, the exceptionally high rate of cash held outside banks is largely driven by public distrust in financial institutions.
Other reasons include religious and cultural factors – including the fear of engagement of usury (interest) that is prohibited in Islam – and the general unfamiliarity with banking services, Salih added.

Pointing to the unbalanced financial landscape, Salih noted that "while the economy has ample liquidity, banks themselves are liquidity-poor. The government faces similar challenges, and meanwhile, the public holds large cash surpluses that are effectively idle.”

To reintegrate these hoarded funds into the formal economy, Salih stressed the need for strategic reforms. These measures include strengthening deposit insurance through broader advertising and clearer public communication to reassure Iraqis that their bank deposits are fully insured against any bank failures, the financial advisor suggested.

He also advocated encouraging investment in government bonds with strong, clear, and sovereign guarantees, and implementing digital payment solutions that would encourage individuals to maintain bank accounts via electronic cards, thereby fostering digital financial inclusion.

The senior financial advisor underscored that a leap in digital financial inclusion is crucial to break the detrimental social habit of hoarding that is disrupting the income cycle and hindering economic investment and growth.

Bringing more funds into the regulated financial system, Salih said, would strengthen the overall economy. 

"The more funds there are inside the banking system, the better the situation is than when they are outside the banking system."

However, the issue of cash hoarding is just one symptom of deeper systemic problems in Iraq’s banking sector.

At its core, the sector suffers from a lack of modernization and persistent structural weaknesses. Most Iraqi banks rely heavily on the Central Bank of Iraq’s foreign currency auctions to generate profit, rather than engaging in productive investments that stimulate economic activity. This is further exacerbated by corruption, with repeated allegations that banks are complicit in smuggling money out of the country. ;

Customers often face rigid withdrawal limits - sometimes only allowed in installments - and risk theft not just from criminal actors but potentially from within the banks themselves.

Compounding the problem is a weak legal framework. Laws to protect deposits are either lacking or outdated, and restrictive regulations discourage long-term investment and reinforce a dependence on government-linked financial operations. 

As a result, Iraqi banks offer limited services by international standards and remain largely tied to state-driven “rentier” activities such as currency exchange, letters of credit, and the distribution of public sector salaries.

Although there is a growing interest in digital banking and the Central Bank has launched initiatives to support digital enrollment, progress remains slow due to the absence of essential regulatory frameworks.

The infrastructure for electronic payments is still underdeveloped, and most Iraqis continue to convert their digitally paid salaries into physical cash—reinforcing the long-standing “cash-is-king” mindset that continues to stall the country’s financial modernization.

TIDBIT FROM CLARE

 Clare 

 Article: "Iraq: Concluding Statement of the 2025 IMF Article IV Mission" Quote: "An International Monetary Fund (IMF)...met with the Iraqi authorities in Amman and Baghdad during May 4–13 to conduct the 2025 Article IV consultation...

A highly uncertain global environment, falling oil prices, and acute financing pressures, are taking a toll on economic activity and exacerbating Iraq’s existing vulnerabilities, calling for urgent measures to preserve fiscal and external stability..

Article quote continued:  "Building on recent progress, the Central Bank of Iraq (CBI) should continue modernizing the banking system.. .

The mission commended the CBI for the successful transition to the new trade finance system. Trade finance is now fully processed by commercial banks through their correspondent banking relationships. This has also supported the recent decline in the spread between the official and parallel market exchange rates. Nonetheless, further efforts are needed to further reduce the spread, including by imposing Iraqi dinar usage for car and real estate transactions, improving customs controls to curb smuggling, and simplifying FX access."

WALKINGSTICK: Aki will give us a list of the private banks that will collect the 3-zero notes for the CBI !!! #iqd

 

2025 Budget: Government Advisor Outlines Spending Priorities And Plans To Address Trillion-Dollar Deficit

 2025 Budget: Government Advisor Outlines Spending Priorities And Plans To Address Trillion-Dollar Deficit

Time: 2025/05/21 Read: 2,430 times  {Economic: Al Furat News} The Prime Minister's financial and economic advisor, Mazhar Mohammed Salih, revealed important details related to the budget for the remainder of 2025 and the impact of global economic variables on the oil market.

In a press statement, Salih confirmed that "Iraq was able to sell its oil until the end of the first quarter of 2025 at an average price of $75 per barrel, which exceeds the price specified in the general budget law of $70."

He pointed to the paradox witnessed by the global oil market, as the OPEC+ group recently lifted its restrictions on member states' production, driven by a decline in global oil inventories. However, this increase coincided with the escalation of the trade war between the United States and China, and the subsequent imposition of customs tariffs, which produced signs of a recession in the global economy.

Salih explained that a 1% decline in economic growth leads to a half-percent decline in demand for crude oil and vice versa, noting that this has created a "downward oil asset cycle."

Regarding the Iraqi general budget for the rest of 2025, Salih indicated that it will operate according to the principle of "fiscal space," which is based on flexibility in controlling public expenditures. 

He emphasized that priority in spending will be given to government salaries and wages, pensions, and social welfare, which affect the lives of eight million Iraqis. He also stressed the need to continue Spending on infrastructure projects remains uninterrupted, as they are linked to the government's development and reform agenda.

Saleh noted that the budget includes a hypothetical maximum borrowing limit of 64 trillion Iraqi dinars (about $1.5 trillion) to cover the deficit gap, out of an upper ceiling of 200 trillion dinars. He emphasized that the Ministry of Finance will borrow to finance the project when needed.  LINK