Central Bank of Iraq Implements Strategies to Enhance Economic Stability
The Central Bank of Iraq, under the leadership of Governor Ali Mohsen Al-Alaq, is actively working to reduce reliance on the US dollar and improve the stability of the Iraqi dinar. This initiative involves creating new mechanisms for local banks to conduct transactions in various currencies, including the Chinese yuan and euro, which aims to alleviate pressure on the exchange rate and promote economic resilience.
Strengthening Foreign Reserves and Monetary Policies
In response to rising global economic challenges, the Central Bank has increased its foreign exchange and gold reserves, ensuring that these reserves cover 83.62% of the broad money supply. This coverage significantly exceeds the global standard, providing Iraq with a robust financial cushion against external shocks. The bank's measures also include raising interest rates to combat inflation and implementing new banking regulations to control liquidity.
Digital Banking and Financial Inclusion Initiatives
To address the low usage of bank cards and promote financial inclusion, the Central Bank has launched initiatives aimed at enhancing digital banking infrastructure. With plans to establish a national electronic payment company and increase public awareness of digital banking benefits, the Central Bank is focused on improving security and transparency in the financial sector. By 2023, the number of bank cards is expected to reach 19.75 million, reflecting a growing acceptance of electronic payment methods.
- The Central Bank of Iraq is also considering the project to remove zeros from the dinar, a move often associated with revaluing a currency and simplifying transactions. This project is currently under review, taking into account the significant volume of currency in circulation and the economic context of Iraq. Furthermore, the Central Bank's efforts to localize salaries for employees in the Kurdistan Region are underway, with measures being taken to establish a framework for electronic payments and bank accounts for public sector workers. This initiative is part of a broader strategy to enhance financial systems across the country.
