What is the role of private banks in the recovery of the parallel market for the dollar?[You must be registered and logged in to see this link.] |Today[You must be registered and logged in to see this image.]
Baghdad Today - Baghdad
Member of the Parliamentary Finance Committee, Representative Mudar Al-Karawi, confirmed today, Monday (November 13, 2023), that the role of banks must be reflected in financing development projects and providing liquidity and lending to citizens and projects, but the role of private banks in Iraq is limited to currency trade.
Al-Karawi said in an interview with “Baghdad Today” that “recent years have witnessed the opening of dozens of private banks in Baghdad and the rest of the Iraqi governorates in a major revival of the banking sector, which is the largest of its kind since the founding of the Iraqi state more than 100 years ago.”
He added, “Despite our support for the establishment of banks, what is more important in our view is what they provide to the national economy, especially since banks are concerned with many issues, most notably financing development projects and overcoming obstacles in providing lending liquidity to citizens, companies, and businessmen, and entering into economic partnerships that directly revive the investment file, but what we see is It is different in most cases, and the role of banks is directly defined in the currency trade file.”
He pointed out that "the presence of more private banks than government banks, or vice versa, does not constitute a factor affecting the exchange rate of the dollar or the parallel market, if the latter is managed in a way that contributes to stopping its smuggling and speculation, ending the dollarization file, and returning the dinar for all internal financial transactions," pointing out that " The file of private banks needs real reconsideration and evaluation in order to push them to open up towards financing investments and increasing the pace of financial lending.”
He continued, "It is unacceptable that some banks turn into more like banking offices and earn money through the currency auction, which needs an objective reconsideration."
The total number of banks in Iraq is 81 banks, of which the number of government banks is only 7, while the number of private banks is 74 banks, according to economic statistics.
On the other hand, the list of dollar sales in the Central Bank of Iraq shows that the number of banks participating in the currency auction, whether for cash sales or foreign transfers in general, ranges between 25 and 30 banks only.
Economic and political circles have accused specific banks of taking over the currency auction at the Central Bank, while experts point out that this comes because of the so-called “correspondent banks” these banks own in other countries, which makes them capable of organizing foreign financial transfers compared to those banks that It does not have “correspondent banks”.
However, according to a recent agreement between the Central Bank of Iraq and the Federal Bank, the number of banks capable of conducting external financial transfers will be increased from 5 banks to 10 banks, and these new banks will be strengthened with advance shares of the dollar, making them able to carry out external transfers by relying on the correspondent banks that they own in the country. Several countries.