Minister of Finance Discusses Support for Development Projects in Iraq with World Bank
Minister of Finance Taif Sami discussed with the World Bank Representative to Iraq on Sunday enhancing cooperation to support development projects.
The ministry said in a statement received by the Iraqi News Agency (INA): "Minister of Finance Taif Sami Mohammed received the World Bank Representative to Iraq and his accompanying delegation to discuss plans to enhance cooperation to support development projects by leveraging the technical and financial support provided by the Bank in implementing strategic projects to stimulate economic growth, especially in the areas of infrastructure and human development."
The statement added, "The two parties discussed developing the private sector and encouraging investment as the primary driver of sustainable economic growth, in addition to the need to support financial reforms to achieve stability and growth."
The statement explained that "the Bank Representative expressed his commitment to continuing to support Iraq in achieving its development goals and enhancing its ability to confront economic and development challenges." link
The data supports big things are about to take place...The last 3 to 4 days have been really powerful information.
It shows Iraq is integrating into the international financial system, into the global community. They're talking about it, the UN is talking about it specifically...
We know we've had the support from the United States Treasury, the World Bank, IMF, UN, major financial institutions, other central banks in the region, a successful Arab League conference...powerful information...
Iraq's financial infrastructure has long been in need of significant transformation. With less than20%of the population owning a bank account, Iraq has one of the lowest financial inclusion rates in the Middle East, paling in comparison to54%in Saudi Arabia and69%in the UAE.
In an effort to close this gap, the Iraqi government and financial sector have focused on the adoption of digital payments,
with over two trillion Iraqi dinars worth of e-payment transactions recorded in August 2024 alone. The growing shift towards digital-first payment solutions, enabled by partnerships with global fintech partners, is beginning to bridge the shortfall in financial inclusion and power economic growth across Iraq.
Retiring Iraq's Legacy Infrastructure
Iraq's financial sector has faced challenges in expanding its customer base and has experienced limited banking penetration, leaving a large portion of the population unbanked and dependent on informal financial systems. This low access to formal banking services has left many Iraqis unable to take advantage of modern financial products and services, reducing savings rates and fostering financial instability among individuals and businesses.
Further compounding this issue is widespread reliance on outdated regulatory frameworks, disincentivising the adoption of modern financial technology including cloud-based solutions. In addition, Iraq's financial institutions are hampered by legacy systems often unable to support modern solutions, increasing the complexity of implementing faster, more secure digital payment platforms. Replacing legacy infrastructure will allow financial institutions to enhance transaction speed, strengthen fraud prevention efforts, and expand their services in line with international payment standards.
Laying the Foundations for Digital Transformation
Over the past few years, the Iraqi government has taken crucial steps to address these challenges and modernise the financial system of one of the fastest growing economies in the Middle East. The Ministry of Planning, in collaboration with the Central Bank of Iraq (CBI), recently introduced mandates requiring financial institutions to upgrade their digital and technical systems. These upgrades are intended to align Iraq's banking sector with international standards, especially in the key areas of fraud prevention, anti-money laundering (AML), and cybersecurity.
In line with these modernisation efforts, the CBI is promoting digital financial services, particularly among younger age groups with higher smartphone adoption. This shift is expected to foster a generation more reliant on card payments and digital transactions, moving away from Iraq's dependency on cash. The CBI is also accelerating digital transformation by granting a higher number of licences to Payment Service Providers (PSPs) and introducing digital banking licences. These initiatives align with the CBI's goal of building a digital-first economy, paving the way for faster and more secure infrastructure in Iraq's financial industry.
As part of these ongoing efforts, Iraqi banks are adopting advanced cybersecurity defences to combat rising cyber threats as the country embraces digital transformation. Key measures include encryption, multi-factor authentication, AI-driven threat detection, and real-time monitoring. Banks are also enhancing access control with biometric authentication, securing online transactions with encryption and tokenisation, and implementing Security Incident and Event Management (SIEM) systems. Protecting both institutions and their users from these threats is key to building trust in Iraq's digital financial infrastructure.
Complementing these financial sector advancements, Iraq's e-government initiatives are digitalising public services, such as the Ministry of Interior's adoption of digital systems for processing visas and passports. Through collaboration between the Ministry of Interior and PSP partner Tabadul, Electronic Payment Gateways are being implemented, streamlining payments for e-visas and passports, and furthering the country's digital transformation.
The Key Role of Fintech in Iraq's Digital Transformation
Technology vendors are playing an essential role in Iraq's digital transformation journey. Companies like BPC, with global expertise and modern future-proven solutions, can help both startups and established financial institutions implement secure, scalable platforms that meet local regulatory requirements.
In addition, banks and payment providers in Iraq are increasingly collaborating with global fintech partners to enhance their fraud prevention capabilities. By integrating fintech solutions into their systems, they can offer more secure and reliable services to their customers, monitoring and preventing threads from both local and international bad actors.
For instance, Qi Card has enhanced its digital payment capabilities, allowing users to access government salaries and conduct transactions with biometric authentication. Similarly, Cihan Bank is pioneering mobile banking applications by providing customers with convenient access to their accounts.
Public sector support has been strong with the Kurdistan Regional Government's MyAccount initiative so far registering over 600,000 civil servants with their own bank accounts. The initiative aims to ensure one million civil servants have their own bank accounts with around 1,000 ATMs available across the region.
Additionally, BPC provides a platform that enables banks to issue digital payment cards, facilitate QR code payments, and enhance mobile banking solutions. These technologies are especially valuable in regions where access to traditional banking services is limited, helping to promote financial inclusion across the country.
The Road Ahead for Iraq's Financial Infrastructure
The introduction of mobile banking solutions, as demonstrated by fintechs including Zain Cash, has helped to bring financial services to underserved populations in Iraq. Zain Cash alone has onboarded over 1.2 million users, allowing them to make payments, send remittances, and conduct financial transactions without needing a traditional bank account. This growth in mobile wallets will to be a key driver in expanding access to financial services, particularly in rural areas where traditional banking infrastructure is limited, boating financial inclusion the country.
Furthermore, modernising Iraq's financial systems could significantly boost economic growth. Digital payments can formalise Iraq's economy and bring small and medium-sized enterprises (SMEs) into the banking system, whilst also enabling access to key financial tools. With SMEs making up 88% of businesses in Iraq, providing them with access to digital finance promises spur economic development and transform the Iraqi economy.
Recent developments from the Central Bank of Iraq (CBI) and the World Trade Organization (WTO) that suggest the dinar may currently be undervalued.
The report explains that the real effective exchange rate (REER), which accounts for inflation-adjusted strength against a basket of currencies, indicates increasing Iraqi economic competitiveness.
The involvement of a global institution like the WTO signals growing international confidence and deeper integration of Iraq into world trade, which could lead to significant currency reforms or adjustments.
How a rising REER usually increases investor interest, driving foreign investment and trade, which in turn boosts the demand and value of a currency—in this case, the dinar.
It lays out practical implications for dinar holders, where a revaluation would enhance purchasing power and potentially raise the exchange value significantly without necessarily removing zeros from the currency, unlike past inflation countermeasures in other countries.
The historical context of fluctuations in the Iraqi dinar influenced by war, sanctions, and corruption, but stresses that recent improvements in infrastructure, oil revenue management, and transparency have paved the way toward economic stabilization and growth.
Oil revenues, as a cornerstone of Iraq’s economy, support foreign currency reserves, further underpinning the potential for a revaluation.
Stay informed through official sources, remain patient, and carefully consider their investment strategies amid evolving economic conditions. Remain vigilant, well-prepared, and cautious to capitalize on what could be a pivotal moment for IQD holders worldwide.
Highlights
🔥 Central Bank of Iraq’s data reveals the Iraqi dinar may be undervalued based on its real effective exchange rate (REER).
🌍 The World Trade Organization’s attention reflects increasing global confidence in Iraq’s economy and currency stability.
💹 Rising REER suggests improved trade competitiveness, attracting foreign investment and potentially driving a revaluation.
💵 A possible revaluation could increase the dinar’s purchasing power without removing currency zeros, simplifying the process for holders.
🛢 Oil revenues play a crucial role in bolstering Iraq’s foreign currency reserves and currency stability.
📈 Recent reforms have improved inflation control, infrastructure, and government transparency, setting the stage for currency growth.
⏳ Timing and staying informed through reliable sources are key for investors to make strategic decisions amid unfolding economic changes.
Key Insights
📊 Real Effective Exchange Rate (REER) as an Accurate Indicator: The REER is a more comprehensive metric than nominal exchange rates, as it adjusts for inflation and measures the dinar’s strength relative to multiple foreign currencies. The CBI’s highlighting of a rising REER suggests that the official exchange rate may not yet fully reflect the true economic value of Iraq’s currency. This metric provides investors with a data-driven rationale to anticipate increased dinar valuation rather than relying on speculation.
🌐 WTO Involvement Signals Global Economic Integration: When the WTO takes interest in a country’s currency and economic policies, it signifies that Iraq is becoming more embedded in global trade systems. This is a strong signal that Iraq’s economic reforms and trade activities are gaining international recognition, which increases investor confidence and the likelihood of currency stabilization or appreciation.
💹 Investor Magnet Effect Caused by Currency Strength: A strengthening currency typically draws foreign investors, as it suggests a robust economy and promising returns. Increased demand for the dinar from international markets can create a positive feedback loop: more investment leads to greater economic growth, which in turn supports higher currency value, reinforcing the potential for revaluation.
💵 Unique Potential for Revaluation Without Zero Removal: Unlike countries such as Brazil and Turkey, which removed zeros during currency reforms to tame inflation, Iraq may boost the dinar’s exchange rate without redenomination. This simplifies the process for domestic holders and foreign investors alike, allowing current banknotes to appreciate in value directly—a factor that could increase investor enthusiasm and reduce transition complexities.
🛢 Stabilized Inflation and Strong Oil Revenues Strengthen Currency Fundamentals: Iraq’s economic reforms have begun addressing inflation control and improving oil revenue management. Given oil’s dominant role in Iraq’s economy and foreign reserves, stable or rising oil prices significantly contribute to building a solid foundation for currency value appreciation, making the dinar less susceptible to devaluation pressures.
⏳ Long-Term Economic Improvements Create a Positive Outlook: Despite years of instability due to war and sanctions, recent efforts in transparency, infrastructure restoration, and trade expansion since 2021 have positioned Iraq for gradual but sustained economic growth. The currency is likely to benefit from this newly established momentum, presenting a more optimistic scenario for long-term investors.
🔍 Importance of Ongoing Research and Strategic Positioning for Investors: The video stresses that timing and access to reliable information are crucial. Investors should stay connected with official CBI updates, global trade reports, and credible financial news outlets. Preparation and patience are highlighted as essential traits, as major currency changes often happen quietly and without extensive prior announcements.
Conclusion
This update signals a potential pivotal moment for Iraqi dinar holders and investors, supported by official economic data and increasing global attention.
While risks remain, the strengthening of Iraq’s economic fundamentals, enhanced trade ties, and rising REER indicate a real possibility of revaluation that could significantly increase the dinar’s purchasing power.
Careful monitoring, strategic planning, and reliance on verified information will be key to navigating this evolving landscape successfully.
Shafaq News/ Iraq’s Ministry of Finance, through the General Commission of Customs, has begun implementing a new, unified customs tariff across all border crossings and customs centers, including those in the Kurdistan Region.
The Commission stated that the revised valuation system is based on Cabinet Resolution No. 270 of 2023 and recommendations from the Economic Ministerial Council. The update is designed to standardize procedures and curb manipulation in customs valuations—particularly for imported vehicles and goods entering through northern borders.
"We provided the Ministry of Trade with a digital copy of the reference pricing lists to help synchronize implementation across all entry points."
Implementation will follow jointly approved price lists agreed with the Kurdistan Region on December 19, 2023, using reference tables from 2022 and 2024. In cases of discrepancy between invoice values and average international prices listed in the ASYCUDA system, the higher value will be
applied.
A source from the Northern Customs Directorate told Shafaq News that the tariff took effect on Monday, June 2, 2025. Customs checkpoints in Kirkuk, particularly at Jemen and Darman, have tightened inspection protocols in line with the new regulations.
The recent visit of Border Crossings Authority Director Omar al-Waeli to these checkpoints was aimed at reinforcing compliance with the updated system.
Economic analyst Abdullah Hussein described the unification of tariffs between the federal government and the Kurdistan Region as a significant reform. He noted that previous inconsistencies in valuation created vulnerabilities in the national economy, and that the new approach is expected to close gaps and ensure fairer trade practices.