The Governor of the Central Bank of Iraq, Ali Al-Alaq, announced on Monday that the interest rate on deposits in banks has been raised to 7.5% in order to encourage citizens to deposit their funds in banks and withdraw monetary mass from outside institutions, while the Ministerial Council for the Iraqi Economy confirmed the study of increasing the price of… Deposit interest.
This occurred during the presidency of Iraqi Foreign Minister Fuad Hussein, at the 31st session of the Ministerial Council for the Economy, in the presence of the Ministers of Planning, Finance, Labor, and Social Affairs, the Secretary-General of the Council of Ministers, the Governor of the Central Bank, the Undersecretary of the Ministry of Oil, the Vice-President of the National Investment Authority, and the Vice-President of the National Investment Authority.
According to a statement obtained by Shafaq News Agency, the Council hosted Atwan Al-Atwani, Chairman of the Finance Committee in the Iraqi Parliament, and a number of committee members to discuss the dollar exchange rates in Iraqi markets.
The Governor of the Central Bank of Iraq, Ali Al-Alaq, offered a thorough description of the Central Bank’s functions and aims, as well as Iraq’s monetary policy.
According to the press release, Al-Alaq pointed out that “the exchange rate depends mainly on imports, not on local production, and that the exchange rate in Iraq has peculiarities because it is linked to the price of oil, as it is the largest source of providing hard currency.”
He went on to say that “many factors affect the exchange rate, the most important of which is the leakage of the dollar to neighboring countries, internal trading in local markets in a currency other than the national currency, as well as the lack of complete control over ports and smuggling.”
He went on to say, “The level of inflation has decreased significantly and that the goods that enter officially are witnessing price stability, because imports are covered by the official price.”
The Governor of the Central Bank mentioned the creation of a special lounge at Baghdad International Airport for private banks to sell dollars to visitors, as well as hiking the interest rate on deposits in banks to 7.5% to encourage residents to deposit their money in banks.
Following objective and serious discussions, Fouad Hussein, the head of the Ministerial Council for the Economy, stated that “the Council will study in detail this important issue, and will follow up on the localization of salaries for all workers in the government sector, then the mixed sector, and finally the private sector.”
Hussein went on to say, “The Ministerial Council will study increasing the interest rate on deposits,” adding that “We are looking forward to building basic future tools that will help the Central Bank and the Ministry of Finance assume their role in a manner commensurate with the nature of their work.”