Some “Iraq News” Posted by Clare at KTFA 4-2-2025
KTFA:
Clare: Mazhar Muhammad Salih: The urban renaissance continues thanks to the three-year budget.
4/2/2025
The Prime Minister's financial advisor, Mazhar Mohammed Salih, confirmed that the financial and legal flexibility provided by the budget law (the three-year budget), in accordance with the amended Financial Management Law No. 6 of 2019, has enabled the executive authority to implement its government service program without interruption, which has contributed to achieving a continuous urban renaissance in all governorates of the country.
Saleh explained to Al Furat News Agency that "the 2025 financial tables, which will soon be submitted to the House of Representatives in accordance with Article 77/Second of the Triennial Budget Law, will include some important adjustments in spending, revenue sources, and deficit management, especially after the House of Representatives approved, in early February, the amendment to Article 12 of the law, related to the mechanisms for calculating the extraction of Kurdistan Region oil in the areas of production and transportation."
He pointed out that "the financial track is proceeding smoothly and with a high level of governance, transparency, and financial integrity, through coordination between the legislative and executive authorities."
From.. Raghad LINK
Clare: Iraq's foreign reserves rise to a record high
4/2/2025
The Prime Minister's financial advisor, Mazhar Mohammed Salih, confirmed on Wednesday that foreign reserves are at their highest historical levels, helping to achieve economic balance and stability for the country. He also indicated that reserves still cover more than 100% of the currency in circulation.
Saleh said in a press statement: “The slight decline in the Central Bank’s reserves, estimated at 1% of the country’s total foreign reserves, is linked to two factors: First, the increased level of foreign currency reinforcements provided by the Iraqi banking system to its correspondents abroad for the purposes of financing trade and external transfers, which led to a significant decline in the dollar exchange rate against the dinar in the parallel market and an increase in the value of the dinar in that parallel market.”
He explained that "control over domestic liquidity levels has become high, significant, and influential in light of the increasing external value of the dinar, which continues to indicate a decline in the effectiveness of the parallel or secondary market in the country. There has also been a very clear decline in growth rates in the general price level and a very high level of price stability, unlike anything the country has ever witnessed before."
He added, "The other issue depends on the degree of growth in the amounts in which the public finances exchange monthly oil revenues in foreign currency for the dinar for the benefit of total spending (which is the basis of foreign reserves) and converting them into Iraqi dinars," noting that "this is also linked to the degree of discipline and control of public expenditures on the one hand, and thus the slowdown in the liquidation of government foreign currency proceeds into domestic liquidity that can be spent on the other hand through the general budget."
He pointed out that "taking into account the risks of fluctuations in average export oil prices of about $70 or less per barrel in energy markets, which occurred in recent months, this means that the compatibility between the level of replenishment of foreign reserves (through collecting them through cash issuance), which may have become slower and less rapid on the part of public finance, and external transfers in foreign currency for the benefit of financing private sector trade on the part of the monetary authority, which is still at a relatively high pace, is what caused this deficiency or slight decline in foreign reserves."
Saleh continued, "Foreign reserves remain at their highest historical levels, achieving economic balance and stability for the country. The function of foreign reserves remains to defend price stability. However, it is also wise for the Central Bank of Iraq to closely monitor the movements of the current account of the balance of payments to maintain the stability of foreign reserves and monitor their growth safely."
He stressed that "these foreign reserves still cover more than 100% of the currency in circulation and enjoy a high commercial efficiency of more than 15 months of imports, compared to the global standard of three months." He added that "the monetary authority is the only competent entity responsible for managing the country's monetary policy at the domestic and external levels, with a high degree of consensus in terms of balance and transparency to
achieve and maintain economic stability." LINK
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Clare: The performance of the Iraqi banking sector during the year: decline in some indicators and growth in others.
4/2/2025- Baghdad
The Iraqi banking sector witnessed significant changes in its financial indicators over the past year, according to published data. These data reflect the performance of commercial banks, cash flows, dollar purchases and sales, and the policies of the Central Bank.
Commercial banks: decline in some assets and growth in private deposits
Data showed a 0.92% decline in commercial bank assets, falling from KWD 205.25 trillion at the end of 2023 to KWD 203.36 trillion at the end of 2024. Current deposits also declined by 9.38%, while private deposits increased by 10.63%, indicating increased consumer confidence in private banks compared to traditional current deposits.
Dollar movements: Central bank purchases drop sharply
The Central Bank's dollar purchases recorded a significant decline of 61.97%, falling from $8.35 billion to $3.18 billion. In contrast, cash dollar sales saw a slight decline of 0.92%, reflecting a decline in demand for hard currency in local markets.
Cash: A decrease in the money supply and a decline in the issued currency reserves
The issued currency decreased by 1.36%, while cash outside banks decreased by 10.26% to 130.35 trillion dinars, compared to 145.26 trillion dinars the previous year. The ratio of required reserves to issued currency also decreased from 143.14% to 129.64%, indicating a decrease in cash liquidity available in the market.
Central Bank: Increase in loans and decrease in gold reserves
Loans granted to small and medium enterprises (SMEs) saw a significant increase of 47.02%, reflecting a trend toward supporting economic development through project financing. Meanwhile, gold reserves fell by 8.69% to 189.90 trillion dinars, compared to 207.96 trillion dinars last year.
Inflation and exchange rate: a significant decline
The inflation rate fell by 35.56%, from 4.50% to 2.90%, reflecting improved price stability. The exchange rate on the parallel market also declined by 1.32%, indicating relative stability in the value of the dinar against the dollar. LINK
Clare: The Director General of Rafidain Bank identifies the importance of the AML system in enhancing financial transparency.
The Director General of Rafidain Bank, Dr. Ali Al-Fatlawi, highlighted the importance of the AML system in enhancing financial transparency, while pointing out that the bank has taken important strategic steps in the field of combating money laundering and terrorist financing.
The Director General of Rafidain Bank, Dr. Ali Karim Hussein, said that in light of the escalating challenges associated with financial crimes at the global level, anti-money laundering (AML) systems have become a top priority for financial institutions and governments.
As a cornerstone in protecting the integrity of financial markets and promoting economic stability, he stated, "With countries committed to implementing strict international standards in this area, Rafidain Bank stands out as a leading Iraqi financial institution that has adopted the latest monitoring and compliance systems, strengthening Iraq's position in the global financial system."
Regarding the importance of the anti-money laundering system and its role in financial stability, Al-Fatlawi explained that "money laundering poses a direct threat to economic systems, as it enables illegal activities to integrate into the financial system, leading to monetary instability and weakening economic policies."
He added, "For this reason, financial institutions implement strict measures to ensure compliance with international standards, such as the Financial Action Task Force (FATF) recommendations, which establish a comprehensive framework to combat these financial crimes."
He pointed out that "the Anti-Money Laundering (AML) system aims to prevent, analyze, and detect suspicious financial activities through mechanisms that include:
- Know Your Customer (KYC) verification to ensure knowledge of the true sources of funds;
- Monitoring financial transactions to detect any unusual activity;
- Immediate reporting of suspicious transactions to regulatory authorities;
- Using modern technology in financial analysis to enhance the efficiency of detecting illegal activities."
He continued, "These practices not only enhance the transparency of financial markets, but also contribute to raising countries' financial ratings and improving the business and investment environment," stressing that "there is significant support from the Anti-Money Laundering Office, and absolutely, through the development of the AML system."
He explained that "Rafidain Bank, as a banking institution with a major market share in Iraq, continues its pioneering role in developing the local banking structure in accordance with the latest international standards." He emphasized that "in recent years, the bank has taken important strategic steps in the field of combating money laundering and terrorist financing, reflecting its firm commitment to enhancing financial transparency and achieving full regulatory compliance."
Regarding the launch of the Daily Financial Transactions Monitoring (AML) system, he emphasized that "in a qualitative step, Rafidain Bank announced the launch of an advanced system to monitor daily banking transactions across its branches, making it the first Iraqi bank to adopt this supervisory approach in accordance with the latest global banking technologies."
He noted that "this project was implemented in partnership with specialized international institutions, as it aims to analyze and track all financial transactions in real time, contributing to enhancing the level of banking security and combating any illegal attempts at money laundering."
He explained that "the system included, in its first phase, six major branches of regulatory importance, including Al-Waziriya, Al-Muheet, Al-Rafie, Al-Dura Oil Complex, Zurbatiya, and Safwan, with the system to be gradually expanded to the remaining branches. This system is characterized by its ability to:
- Identify suspicious financial activities immediately, enabling rapid response;
- Analyze big data and its intersection with international sanctions lists, ensuring full compliance with regulatory standards;
- Improve financial audit efficiency by transitioning from paper-based operations to smart digital systems.
He pointed out that "this initiative confirms that Rafidain Bank is adopting a proactive approach to combating financial crimes, which strengthens its position as a trusted banking institution within Iraq, regionally, and internationally."
Regarding the economic and regional repercussions of adopting AML systems in Iraq, Al-Fatlawi explained, "Rafidain Bank's commitment to best practices in combating money laundering leads to strategic outcomes that extend beyond the bank itself to encompass the Iraqi economy as a whole.
Advanced banking systems that adopt advanced AML technologies enable:
- Achieving financial stability by preventing illicit money flows, which may negatively impact liquidity and price fluctuations.
- Strengthening international banking relations, as compliance with global standards enhances opportunities to establish partnerships with foreign correspondent banks, facilitating the smooth flow of money transfers and foreign investments.
- Stimulating foreign direct investment, as international investors seek safe financial environments free from regulatory risks.
- Improving Iraq's global financial reputation, which contributes to raising the rating of the Iraqi banking system with international financial institutions."
He continued, "Rafidain Bank is at the forefront of banking transformation, as the progress it has made in implementing anti-money laundering systems reflects its commitment to international standards and its keenness to protect the Iraqi banking sector."
He indicated that "by employing advanced financial technology, strict adherence to transparency, and integration with international regulatory systems, the bank continues its role as a pivotal financial institution in supporting financial integrity and economic stability."
He went on to say, "As the digital transformation in the Iraqi banking sector continues, Rafidain Bank's experience represents a successful model of how to achieve a balance between regulatory compliance and technological development, paving the way for a more transparent and reliable banking future, both locally and internationally."
https://www.rafidain-bank.gov.iq/verify/index.php?url=/?article=142
