Mazhar Muhammad Saleh, advisor to Prime Minister Muhammad Shia al-Sudani on financial and economic affairs, witnessed an agreement between the Central Bank of Iraq and a representative of the US Federal Bank on strengthening and increasing the balances of Iraqi banks in dollars, as well as strengthening other local banks with balances from an international currency basket, as “a step towards stabilizing the dollar exchange rate” in the country.
“The Iraqi Monetary Authority holds foreign currency reserves, which are the highest in Iraq’s financial history,” Saleh said in a press statement, stressing that “Iraq has the highest foreign currency reserves and high commercial efficiency.” Today, the reserve currencies are adequate for Iraqi commerce for the next fifteen months.” In comparison, the global standard is (three months).”
He explained that external financing for the private sector is done through the compliance platform, which required conditions that lasted a year from last October to this November, and thus the banks adapted on the basis of global compliance with the use of foreign currency for trade and not for other purposes that cause problems for the government.
He went on to say, “The agreement between Iraq and the United States indicates the presence of high flexibility in financing the private sector, by strengthening a number of banks in dollars, which have adapted themselves to global compliance and will finance Iraq from major global commercial centers.”
Saleh stated that more than 85% of foreign currency demand is made through the Central Bank of Iraq’s external platform, by increasing the balances of foreign banks, while the parallel market accounts for only 15% of the speculators’ market, emphasizing that this agreement marks the beginning of price stability in the exchange market.
An Iraqi government source previously reported an Iraqi-American deal aimed at increasing the dollar balances of ten Iraqi banks. He also announced that the number of Iraqi banks whose balances in Chinese yuan will be enhanced through the Singapore Development Bank has increased to 13, while the number of banks whose accounts in Indian rupees have been strengthened with the Development Bank of Singapore has increased to 2.