The IMF mission commends the Central Bank of Iraq.

 The IMF mission commends the Central Bank of Iraq. 

June 25, 2025

The International Monetary Fund (IMF) mission, led by Jean-Guillaume Poulain, which met with the Central Bank of Iraq (CBI) from May 4 to 13, 2025, commended the CBI's work in several areas. It confirmed that the CBI has made progress in absorbing excess liquidity by increasing the issuance of short-term debt instruments (CBI drafts and Islamic certificates of deposit), adjusting subscription limits for banks in CBI auctions, and improving liquidity forecasting tools and practices.

The statement issued by the International Monetary Fund stated that the mission commended the efforts of the Central Bank of Iraq to successfully transition to the new trade finance system, indicating that commercial banks now process trade finance transactions entirely through their relationships with correspondent banks. 

The Central Bank of Iraq has achieved significant progress by transitioning to the new system for financing foreign trade through correspondent banking channels, instead of relying on the daily dollar auction. This development has contributed to enhancing banks' compliance with international transparency requirements, such as OFAC regulations and others, and improving their relationships with global correspondent banks. 

This step has resulted in narrowing the gap between the official dollar price and its parallel price, indicating relative success in curbing illegal speculation and reducing currency leakage. The foreign exchange management methodology has become more effective compared to the past, especially with the Central Bank of Iraq continuing to take complementary measures, such as requiring traders to submit genuine import invoices and simplifying procedures for obtaining hard currency for legitimate importers.

In parallel, the mission welcomed the progress made in the use of digital technology and the Iraqi authorities' intention to implement a comprehensive reform of the banking sector, calling for its completion to be accelerated without delay. 

The Iraqi government, with technical support from the International Monetary Fund and other international bodies, has begun implementing initial steps to reform government banks, including auditing the quality of assets, estimating the size of non-performing loans, and developing a draft plan to restructure the two largest government banks (Rafidain and Rashid) financially and administratively. 

The Iraqi financial sector has also witnessed an increasing trend towards digitization and the adoption of modern financial technology, whether in electronic payment services or the launch of banking platforms via the Internet and mobile phones.

The International Monetary Fund believes that these technical improvements, along with steps to enhance cybersecurity in banks, promote financial inclusion, expand private banking activity, and restructure government banks, will enhance the efficiency of financial services and increase foreign correspondents' confidence in the Iraqi banking sector.

The report also noted the expansion of private banks' activity in trade finance and small business financing, with expectations of further increases if obstacles are removed. Initiatives to enhance financial inclusion, modernize electronic payment systems, and reduce reliance on cash in the economy are also crucial to strengthening banking depth. The Central Bank of Iraq launched a national financial inclusion strategy during the first half of 2025. 

The report also included important recommendations to enhance financial stability and facilitate the transfer of monetary policy effects to the real sector, including: reducing the phenomenon of dollarization, in which Iraq has made significant progress over the past two years; the importance of accelerating the completion of the comprehensive restructuring plan for banks to enhance their solvency; the importance of strengthening corporate governance for banks, developing digital infrastructure and cybersecurity for the financial sector; strengthening the role of private banks in financing economic development; and continuing to improve anti-money laundering and counter-terrorism financing procedures.

 It is also important for the Central Bank of Iraq to continue increasing the issuance of short-term securities to ensure better management of excess liquidity.

 Central Bank of Iraq 

Media Office

https://cbi.iq/news/view/2916

Exciting Updates from Markz!! #iraqidinar #iraqidinarinvestor #iraq

 

IMF: Iraq has made progress in transitioning to a new system for financing foreign trade

 IMF: Iraq has made progress in transitioning to a new system for financing foreign trade. 

6/25/2025

The International Monetary Fund (IMF) mission considered that the Central Bank of Iraq has achieved "significant progress" by transitioning to a new system for financing foreign trade.

A statement issued by the bank quoted the mission as confirming that "the Central Bank of Iraq has made progress in absorbing excess liquidity by increasing the issuance of short-term debt instruments (central bank transfers and Islamic certificates of deposit), adjusting subscription limits for banks in central bank auctions, and improving liquidity forecasting tools and practices."

The statement added, "The mission commended the Central Bank of Iraq's efforts to successfully transition to the new trade finance system," noting that commercial banks now process trade finance transactions entirely through their relationships with correspondent banks.

According to the mission, "the Central Bank of Iraq has made significant progress by transitioning to a new system for financing foreign trade through correspondent banking channels, instead of relying on the daily dollar auction."

According to the statement, the mission indicated that "this development has contributed to enhancing banks' compliance with international transparency requirements, such as OFAC regulations and others, and improving their relationships with global correspondent banks."

The statement added that this step resulted in narrowing the gap between the official dollar exchange rate and its parallel exchange rate, indicating relative success in curbing illegal speculation and reducing currency leakage.

The statement continued, citing the IMF mission, that "the methodology for managing foreign exchange has become more effective than before, especially with the Central Bank of Iraq continuing to implement complementary measures such as requiring traders to submit genuine import invoices and simplifying procedures for obtaining hard currency for legitimate importers."   LINK

TIDBIT FROM BGG

  BGG   

 Article:   "Iraq welcomes the ceasefire, stressing that it is a step towards enhancing stability in the region"

  Quotes:  "The Iraqi Ministry of Foreign Affairs welcomed, on Tuesday, the US initiative that led to a ceasefire agreement between Iran and Israel,stressing that it represents a positive development toward de-escalation and enhancing stability in the region.";  

"A ceasefire agreement between Iran and Israel entered into force earlier today, pursuant to a declaration by US President Donald Trump, which calls for a comprehensive and complete ceasefire that has been in place for 12 days."

IRAQ & DINAR STATUS EXPLAINED! @DINARREVALUATION #iraqidinar #iqd #iraq #iraqidinarnewstoday2025

 

An Economist Points To A Decline In Liquidity And The Loss Of Thousands Of Jobs In Iraq.

 An Economist Points To A Decline In Liquidity And The Loss Of Thousands Of Jobs In Iraq. 

  
Economy     2025-06-25 |Source: Alsumaria News     3,726 views   Alsumaria News - Economist Ahmed Abdul Rabbah revealed on Wednesday the reasons behind the ban on a number of local Iraqi banks from receiving foreign transfers. He emphasized that the continued ban on 32 Iraqi banks from dealing in dollars not only   leads to a decline in liquidity but also  threatens the loss of thousands of jobs at these banks.
 
Ahmed Abdul Rabbo told Sumaria News that the  banks operating in the country that handle remittances are Iraqi in terms of registration and establishment, but some of these banks hold majority ownership stakes in foreign investors,  which gives them advantages over local banks.
 
The economic expert attributes the deprivation of a number of local banks from foreign transfers to
     their lack of banking relationships with global correspondent banks such as JP Morgan and Citibank,
     unlike banks owned by foreign investors, which maintain extensive correspondent banking networks.  

He pointed out that those banks in which foreigners hold significant stakes continue to dominate the remittance sector,  benefiting from their global network of relationships.  He explained,
 
"I find it essential for the Central Bank of Iraq to diversify the basket of currencies used in emittances by adopting alternative currencies such as the  Emirati dirham, the Chinese yuan , and the  euro.
 
I also call on the Central Bank to   guarantee a number of Iraqi banks that adhere to international standards, in order to   facilitate the opening of accounts for them with international banks    such as Citibank and JPMorgan."  

He added that the  US sanctions imposed on 32 Iraqi banks remain, in his view, unjust and illogical, as they      disrupt the structure of the banking system,     negatively impact opportunities for competition and growth,     limit the liquidity of these banks, and     leave them vulnerable to bankruptcy. 

The continued ban on dollar transactions for 32 Iraqi banks not only  leads to a decline in liquidity, according to the expert, but also  threatens the loss of thousands of jobs at these banks, whether they have been closed or restricted in their operations. It also   deepens the crisis of confidence in these banks as intermediary institutions.
 
This situation has forced many companies and individuals to deal only with "dominant" banks, reducing the opportunities for local banks in the market.
 
The economic expert noted that  if
     reform efforts continue and   international standards are fairly applied,we may witness a real   decline in the role of the black market and a  gradual return of committed local banks to competition on a more equitable basis.    
  
https://www.alsumaria.tv/news/economy/531261/اقتصادي-يؤشر-أمرًا-يؤدي-إلى-انخفاض-السيولة-وفقدان-آلاف-الوظائف-في-العر  

TIDBIT FROM MILITIAMAN

  Militia Man 

 A lot of turmoil and it's been going on for...a couple years...The Middle East is very volatile...but...

even during the turmoil you're seeing Iraq has been stable and staying out of the conflict which is really good...

Even though this tension has been going for weeks Iraq has still maintained that she's opening for business...stable... has all the components for her economy to keep moving forward.  That still holds true today...