Central Bank Governor Ali Al-Alaq
Baghdad
The Central Bank of Iraq has reduced reliance on the ""US dollar in commercial transactions, according to the Governor of the Central Bank of Iraq, Ali Mohsen Al-Alaq, adding that the project to remove zeros in Iraq is under continuous review and study at the bank.""
Countries remove zeros from their currency to revalue their national currency and simplify financial transactions. This is done by removing a specific number of zeros from the nominal value of the currency, making it appear less inflationary and more stable.
Al-Alaq confirmed, in an extensive interview with Al- News which was reviewed by "Al-NEWS Outlet", that the Central Bank responded to global economic challenges, such as rising energy and raw material prices, by ""amending some monetary policies in line with the international situation and to enhance confidence in the Iraqi dinar and prevent a sharp decline in its value.""
He also stressed that the Central Bank of Iraq increased its holdings of foreign exchange and gold reserves to strengthen the country's financial position and financial stability in order to enhance its ability to confront potential economic crises. These are the details of the dialogue:
What steps have you taken to address the crisis of the dollar’s rise against the Iraqi dinar and reduce the gap between the official price and the black market price?
The Central Bank of Iraq has created new mechanisms to cover the accounts of local banks with their senders in other currencies (Chinese yuan, Indian rupee, euro and UAE dirham) in addition to the dollar, ""which has reduced reliance on the US currency in commercial transactions for the clients of these banks"", as the ""Central Bank seeks to withdraw excess liquidity in the economy"" that puts pressure on the exchange rate and to prevent the exported currency from growing in an undesirable manner.
What is the status of the country's foreign reserves?
Foreign exchange reserves are the tool used by all central banks to maintain the stability of the local currency exchange rate against foreign currencies, as well as to ""reduce exposure to external crises ""by maintaining liquidity in foreign currency"" to absorb shocks in times of crisis.
The Central Bank of Iraq has a level of reserves that enables it to achieve this stability and provides it with sufficient flexibility to meet the demand for foreign currencies to meet the requirements of the balance of payments and other obligations.
According to the latest data on the level of foreign reserves adequacy, the foreign reserves of the Central Bank of Iraq cover 83.62% of the broad money supply, i.e. covering the cost of importing 15 months, while the global standard rate is 20%, covering 6 months of importing.
However, foreign reserves management faces global and local challenges according to the economic nature of each country and the economic and geopolitical conditions it is going through.
What are the most prominent contributions of the Central Bank of Iraq in supporting the Iraqi economy?
The Central Bank responded to global economic challenges, such as rising energy and raw material prices, by adjusting some monetary policies in line with the international situation and ""to enhance confidence in the Iraqi dinar ""and prevent a sharp decline in its value. The Central Bank raised interest rates to counter inflationary pressures resulting from changes in global prices and domestic demand, and issued new instructions to Iraqi banks to control cash liquidity.
The Central Bank of Iraq has increased its holdings of foreign exchange reserves and gold to strengthen the country's financial position and financial stability.
The bank also launched programs and initiatives aimed at increasing financial inclusion, including enhancing the spread of digital banks and online financial services, in addition to the Central Bank of Iraq’s contribution to sustainable development.
It also played an important role in financing economic and development projects by providing soft loans and special financing programs aimed at supporting productive sectors while continuing to finance small and medium enterprises.
Has the banking sector in Iraq been affected by US sanctions imposed on some banks?
The sanctions imposed on banks are related to the decision to ban dealing in dollars, as the banks were not included in the sanctions list issued by the Office of Foreign Assets Control, and therefore the banks’ activities continue, according to the applicable procedures and in all currencies except the dollar.
As for the situation of the Iraqi banking sector, it is experiencing a state of stability, as government banks still control approximately 79% of the total assets of the banking sector, compared to 21% for private banks.
Are there any restrictions on the bank's use of its funds in the United States?
There are no restrictions on our US accounts, taking into account the application of international standards to combat money laundering and terrorist financing in foreign transfers.
What are the reasons for the low rate of bank card usage in Iraq compared to neighboring countries? What are your steps to overcome this situation?
There are major reasons behind the low use of bank cards in Iraq, most notably the preference of many Iraqis to use cash in their daily transactions due to prevailing customs and traditions, in addition to the limited spread of banking services, as a large percentage of the population, especially in rural areas, remains unconnected to banks.
Finally, lack of financial awareness plays a major role in the reluctance to use bank cards.
To address these challenges, we are working to improve and expand our digital infrastructure. In this context, the Central Bank of Iraq has initiated the establishment of a national electronic payment company to encourage the banking and non-banking sectors and public institutions to develop this infrastructure.
The Central Bank, in cooperation with public and private institutions, is organizing awareness campaigns aimed at increasing public knowledge of the benefits of using bank cards and electronic payment methods to enhance confidence in the banking system.
The number of bank cards in 2023 will rise to 19.75 million cards and the number of bank accounts will rise to 13.3 million accounts.
The bank focuses on improving security and increasing transparency, and has created a platform to manage public complaints related to the financial sector, which helps in developing strategies to address any issues facing financial institutions.
It works to encourage financial innovation by supporting the development of services such as electronic wallets, banking applications, and opening digital banks. It is also currently working to launch a national financial inclusion strategy that includes solutions to most of these challenges, in addition to financial awareness programs targeting various segments of Iraqi society.
All of this resulted in both the number of bank cards in 2023 rising to 19.75 million cards and the number of bank accounts rising to 13.3 million accounts.
Where has the digital banking project come from?
The Central Bank of Iraq issued licensing controls for digital banks in Iraq during May of this year, and is in the process of studying the submitted applications in light of the requirements for digital banks, taking into account the risks and limitations related to digital banks, especially with regard to cybersecurity risks.
The main objective of licensing digital banks is to keep pace with developments in the banking environment, as well as to provide diversity in the provision of banking services in light of technological progress that contributes to enhancing financial inclusion by facilitating customers’ access to banking services.
In light of the International Monetary Fund's statement that Iraq's internal imbalances have worsened due to the large financial expansion and the decline in oil... How do you view its demands to correct the financial situation?
Naturally, the country’s dependence on rentier resources leads to bearing the costs of external shocks that are beyond its control, such as negative oil price shocks, and because the country needs more spending than any stable country due to the conditions it has gone through during decades of wars and destruction, which requires increasing spending on infrastructure, which is the basic pillar of the shift towards economic diversification.
All of this has led to pressure on the capabilities of public finance, especially the revenue side, and thus resorting to borrowing. Therefore, we agree with the International Monetary Fund regarding reforming the public finance situation, and the positive effects this has on supporting the independence of monetary policy in achieving its primary goal, which is the stability of the general price level through controlling liquidity levels.
We agree with the International Monetary Fund regarding the reform of public finances, and the positive effects this has on supporting the independence of monetary policy.
""Will removing zeros from the dinar destabilize the financial situation in Iraq?""
The process of removing zeros from a currency means replacing the old currency with a new one in order to simplify the accounting process between consumers. It is often resorted to by countries that suffer from high inflation and have become unable to deal with paper currencies of very low value.
Many believe that the process of deleting zeros is an economic and monetary reform process and is resorted to in cases of high inflation and currency collapse, which reduces the feeling of economic collapse (a monetary illusion process). However, if this process is not supported by real economic factors and accompanied by radical reforms, it becomes negative.
""The project to remove zeros in Iraq is under continuous review and study at the Central Bank of Iraq, taking into consideration the existence of a volume of issued currency that exceeded 100 trillion dinars after it was 6 trillion in 2004, the year following the exchange of the currency that was undesirable and of poor quality.""
In addition to a wide cash supply approaching 179 trillion dinars, which requires specialized cadres, especially in the bookkeeping process, which government banks are still suffering from due to the circumstances the country has gone through.
How will Iraq's repayment of all its debts to the International Monetary Fund affect the country's economic situation as a whole?
Iraq’s repayment of all its debts to the International Monetary Fund, accumulated over the years as a result of the Fund’s loan programs to address the economic challenges that Iraq faced in previous years, could have a positive impact in the long term by enhancing credit and improving financial sustainability, in addition to its repercussions on the country’s economic situation through:
Improve Iraq's economic confidence and credit rating and obtain financing on better terms in the future.
Enhancing the confidence of foreign and local investors in the Iraqi government’s ability to meet its financial obligations.
Achieving greater independence for Iraqi economic sovereignty, making the country less vulnerable to external pressures and interference in its economic policies.
Alleviating financial pressures and reducing financial burdens, which reduces pressure on the general budget.
Directing financial resources towards infrastructure and economic development projects and improving the ability to finance development projects.
Reducing pressure on foreign reserves, which has a positive impact on the stability of the currency and the country’s ability to cover its imports and maintain financial and economic stability.
Where have the Central Bank of Iraq's procedures for localizing salaries of employees in the Kurdistan Region of Iraq reached?
We would like to point out that this bank has taken the necessary measures to complete the process of localizing salaries of employees of the Kurdistan Region of Iraq in terms of providing the Federal Court with a list of banks licensed by this bank and operating in the region, and providing the infrastructure and electronic payment systems that support the processes of localizing salaries in the region, which clarifies the controls for opening a bank account and adopting an electronic signature for the same purpose.
-------------------------------------------------------------------------------
Here we again have the Central Bank of Iraq reaffirming that the deletion of the zeros project is still on the table and under continuous review. He reiterates that Iraq has plenty of reserves and gold to defend the value of the Iraqi dinar effectively by reducing the exposure to external crisis by maintaining liquidity in foreign currency to absorb shocks in time of crises. He alleviates the worry that Iraq has any restrictions on her accounts. While also maintaining 15 months of reserves for imports that amount is be far more than what is considered normal for other countries of about 6 months. All in all this shows that Iraq has been doing a fine job and there will likely be more on the matter to come. imo ~ MM | | | |
Home
» utube 9/19/24 MM&C Iraq Dinar Update Non-Oil Revenues-Central Bank Gov- Art. 140-
» utube 9/21/24 MM&C Iraq Dinar Update | #xrpripple #iraqidinar - Iraq Budget Revenue Tables 2024 S
» Government confirms its adoption of a "constructive economic policy"
» Iraq ranks 77th globally in the Artificial Intelligence Index
» Documents prove that Baathists run the Ministry of Foreign Affairs
» It is due to Iran and Russia.. Iraq and Saudi Arabia have fallen from the top oil exporters to China
» Al-Sudani's advisor: The banking system in Iraq is rentier par excellence
» The dollar rises in local markets
» "Suspicious deals" and "monopoly".. What is happening with the file of granting lands and state prop
» Prime Minister's meeting with the Banking Association.. Decisions to support and confirm the role of
» Prime Minister Masrour Barzani participates in the ceremony marking the 75th anniversary of the foun
» Kurdistan Interior Minister thanks China for continued support, praises cultural, scientific relatio
» The Ministry of Education intensifies its awareness campaigns on the dangers of the drug scourge
» Escalating demands to expose corruption in Iraqi ports: a threat to the national economy
» “On time”... The Ministry of Finance confirms its full commitment to paying employees’ salaries
» Will Parliament resort to the courts to dismiss Al-Alaq?
» $290 million loan from Austria to Iraq
» Iraq.. A major campaign to rationalize water consumption
» American newspaper reveals the US withdrawal plan from Iraq
» Al-Sudani leaves the capital, Baghdad, heading to New York
» Despite the imminent official announcement... No clear agreement on the form of "ending the internat
» Dollar exchange rate rises in Iraq today
» Member of the Parliamentary Legal Committee: The Iraq Gateway Project must be subject to scrutiny an
» Granting presidential palaces for investment to “suspicious names”.. Parliamentary integrity is “sus
» Washington warns of threats to Iraq's security and stability
» utube 9/17/24 Iraq Dinar Update --Sudani Sadr-Development-Pro
» Oil and Gas Parliamentary: There is a major failure in the work of the Internal Control Department a
» Parliamentary Legal: All objections to the Civil Status Law will be taken into consideration
» Worth $2.7 billion.. Iraq contracts with a Korean company to supply it with a surface-to-air missile
» Revealing a parliamentary movement within the House of Representatives to decide the position of the
» Al-Alawi: The continued influx of foreign workers in an unplanned manner
» Parliamentary Legal: Concerns over Personal Status Law are Misunderstood
» ILO identifies “enormous” economic challenges in Iraq, proposes solutions to address unemployment
» Iraq imports electricity at a cost of up to $300 million annually
» Communications: The Internet will witness a significant improvement in Iraq soon
» Has Iraq overcome the problem of paying Iranian gas money?
» The Civil Service Council responds to a parliamentarian regarding the availability of job grades for
» India expresses its readiness to work in Iraq in these areas
» Al-Sudani: There is no alternative but to have capable Iraqi banks that adopt all financial standard
» The Department of Economic Relations at the Ministry of Commerce discusses with an economic delegati
» Iraq and Romania discuss the development road project and the possibility of Romanian sectors partic
» Chairman of the Investment Authority: More than 100 opportunities are ready for contracting at the "
» Opening of the workshop on public-private sector participation within the project to enhance economi
» Rafidain Bank: Activating the comprehensive banking system in 42 of its branches spread across Baghd
» Parliamentary objection to the mechanism for selecting the names of those accepted for appointments
» The cost of importing electricity in Iraq is less than its construction.. A specialist details the m
» The banking sector in Iraq.. many failures and a real need to develop it
» Will taxing social media help solve the impending financial crisis?
» US Ambassador: Iraq is capable of creating an economic model to be emulated
» The housing crisis in Iraq is escalating.. The shortage of housing units threatens the future of mil
» Collecting 160 parliamentary signatures to refer these people to retirement
» New development in the parliament presidency crisis.. Learn the details
» Pardon under suspicion: Will the general amnesty law become a haven for the corrupt?
» Artawi Project: New energy ignites Iraq’s economy and extinguishes the fires of waste!
» Launching the National Environment Strategy: A Step Towards Sustainable Development and Protection o
» Saudi Arabia opens consulate in Basra, trade office in Erbil
» What is the truth about the inability of the Ministry of Finance to pay salaries?
» Details of the new draft income tax law
» $290 million loan from Austria to Iraq
» Economic reform and fighting corruption.. A glimpse into two years of Al-Sudani’s government
» Regarding maximizing revenues and quality of services.. Parliamentary Finance hosts Minister of Comm
» Artificial Intelligence Index.. Iraq ranks 77th out of 83 countries
» Monthly salaries of up to 800 thousand dinars for this category
» In the past 20 days, Iraq lost enough money to build a new power station or a luxury residential com
» utube 9/16/24 MM&C Iraq Dinar Update - #xrpripple #iraqidinar - Electronic International Payments
» Al-Sudani directs the preparation of a draft resolution obligating ministries to provide facilities
» Germany: Iraq is making progress towards economic stability
» Al-Sudani: There is no alternative but to have capable Iraqi banks that adopt all financial standard
» Iraq enters into space war confrontations.. Cyber attacks raid Tel Aviv and news indicates that th
» Contrary to expectations.. Al-Sudani's advisor: Non-oil revenues grew at record levels in 2024
» Central Bank of Iraq sells more than $250 million in auction today
» The Supreme Committee for Tax Reform reveals details of the draft of the new income tax law
» A Kurdish delegation will visit Baghdad early next week
» The Commission sets a date for approving the candidates for the Kurdistan elections
» Prime Minister receives Chairman of the Private Banks Association and a number of bank managers
» Parliamentary Investment Committee proposes solutions to cover Iraq's expenses.. What about border c
» Iraq signs $290 million loan agreement with Austrian bank
» The Council of Ministers is studying a decision obligating ministries to provide facilities to suppo
» Iraq of Four Million Employees: Will the Oasis of Jobs Last in the Desert of Opportunities?
» A parliamentarian talks about an Iraqi port in the Red Sea.. These are the details
» The housing crisis is deepening and housing unit prices are astronomical
» Najaf discusses with a specialized German company the establishment of a waste recycling plant
» Second reading increases the yield of calls rejecting the release of terrorists by general amnesty
» Prime Minister: The Central Bank has contracted with Oliver Wyman to develop the banking and financi
» Parliamentary Water Committee identifies the reasons for the continued drought and low water levels
» Al-Fatlawi: There are some parties trying to overthrow Al-Sudani's government
» Parliamentary Investment Committee calls on the government to intervene regarding the insane increas
» Iraq tightens preventive measures on imported goods, especially electronic devices
» Meetings attended by Al-Ameri.. Kurdish blocs unite to cancel Baath decisions regarding agricultural
» Oxford Economics expects Gulf economies to grow by 4.4% in 2025
» With Apple’s participation, the media and communications sector sets a roadmap to build a long-term
» Cabinet Secretariat: Stopping the sale of government properties to its employees is inaccurate
» The Ministerial Council directs the inspection of electronic devices before importing them to avoid
» The Prime Minister directs the preparation of guidelines to ensure fair competition in the banking s
» The Minister of Electricity directs the announcement and referral of the installation of solar energ
» Gulf central banks move interest rates after Fed decision
» Labor: Including allocations for increasing the salary of the full-time appointee in its budget for
» Non-oil revenues top agenda of parliamentary finance visit to Erbil next week