Economist: Markets will face a recession during Eid due to weak purchasing power

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Economic expert Salah Nouri predicted that market activity would be limited as Eid al-Fitr approaches, explaining that this is linked to the scale of citizen demand, which directly depends on purchasing power. Nouri explained in an interview with Al Furat News Agency that "most citizens are low-income, low-level employees, and covered by social welfare, which affects the level of spending in the markets." He also predicted that "the dollar exchange rate will decline on the parallel market in the coming period, due to low demand for purchases."

IMF Discusses Strengthening Iraqi Dinar

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Key discussions included: Non-oil GDP growth of 5% in 2024, driven by agriculture expansion and increased public spending, with 3.5% growth expected in 2025. Reduced dependence on oil revenues, improving economic diversification and stability. Review of actual 2024 expenditures and 2025 revenue forecasts, alongside strategies for deficit financing. Public debt strategy update, ensuring fiscal sustainability and investor confidence in government bonds. Financial sector reforms, with the IMF stressing the importance of banking modernization to attract foreign capital. Expanded collaboration with international correspondent banks to facilitate trade financing. Increased use of the Iraqi dinar in major transactions to strengthen the national currency.

Ramadan revives the Iraqi dinar and official expectations of a continued decline in the dollar ⁠

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The decline is due to several factors, most notably the strict measures taken by the Central Bank of Iraq to control imports and electronic money transfers, in addition to the decline in economic activities of the Iraqi citizen during the month of Ramadan.

"strict measures"

Government advisor Alaa Al-Fahd says the decline in the dollar price in the parallel market is due to the Central Bank’s implementation of strict measures aimed at controlling imports and electronic money transfers.

Mechanism for publishing data on buying and selling foreign currencies

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The Central Bank of Iraq explains the mechanism for publishing data on the sale and purchase of foreign currencies from the daily bulletin to the monthly report, which will include:

• Total enhancement of bank balances abroad.
• Settlements of electronic payments abroad.
• Cash sales.

The bank confirms that this decision came in conjunction with the transition from the electronic platform mechanisms to the mechanisms for enhancing the balances of authorized Iraqi banks with correspondent banks, and that the process of enhancing banks does not reflect the daily sales of bank customers until the operations are actually realized. It draws attention to the Central Bank of Iraq's possession of sufficient foreign reserves to meet all official requests for foreign currency, which enhances confidence in the national currency.

Digital Currency in Iraq: Crisis of Confidence.. The Biggest Obstacle

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In a very distinctive step aimed at modernizing the financial system, Baghdad is exploring the possibility of issuing a national digital currency, in an effort to reduce reliance on paper money and enhance financial inclusion. However, despite the promising prospects of this step, the project faces a fundamental challenge represented by the lack of confidence of citizens in Iraqi banks, as a result of the accumulation of financial crises, administrative corruption, and weak banking services. Can such a step succeed in an environment that is ranked among the highest in the world in cash circulation outside the banking sector?

Al-Alaq: We will witness a comprehensive digital transformation in the financial sector

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He added that "this great work is accompanied by the work of the Central Bank, like other central banks, in thinking about having a digital currency under the supervision of the Central Bank. We are not talking about encrypted currencies that are outside the framework of central banks, but rather about a digital currency issued by the Central Bank, and this is a major work being done in the Central Bank in coordination with international and Arab organizations and specialized bodies, and directly with the Arab Monetary Fund." He continued: "We believe that this trend will be the one that will be imposed in the near future, and this represents solutions to major economic, financial and social problems, and will also establish a strict framework for monitoring funds and limiting corruption, money laundering and financing terrorism, because all financial movements will be within a strict and transparent system that can monitor all financial operations, and at the same time facilitates its holders to conduct extensive operations even in other countries of the world."

‘Nothing achieved’ in Baghdad meeting over Kurdistan oil exports: Source

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The meeting in Baghdad between Iraqi and Kurdish officials as well as international oil companies has concluded without reaching any deals despite US pressure, a meeting participant told Rudaw English.

“Nothing [was] achieved and there was no breakthrough,” the source told Rudaw English on the condition of anonymity, adding that, however, they agreed to form two committees between Erbil and Baghdad to address pressing issues, including debts, assurances of payment, and how the scope of the third party consultant. A top American diplomat also attended the meeting as Washington is increasingly pressuring Baghdad to resume Kurdish oil exports swiftly, the well-placed source said.

Al-Alaq: 20 Iraqi banks practice direct transfer operations

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The Governor of the Central Bank, Ali Al-Alaq, confirmed today, Tuesday, that there are 20 Iraqi banks practicing direct transfer operations in 8 foreign currencies.

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Al-Alaq said, according to the official agency, that "the recent quarterly meetings with the US Federal Reserve and the Treasury Department, which were held in Dubai, were very positive, as the steps taken by the Central Bank to improve the foreign transfer system and convert operations to international practices in a safe, transparent and highly organized manner were praised." Al-Alaq pointed out that "this transformation is the first of its kind in Iraq, which witnessed transitional stages from (the window) to (the platform) and then to correspondent banks."

Mazhar Saleh: Geopolitical controls push towards shifting to official channels for currency trading ⁠

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Mazhar Muhammad Salih, the financial advisor to the Prime Minister, confirmed that the geopolitical controls imposed on informal trade contribute to expanding dealings with official outlets for foreign currency, which contributes to financing foreign trade through the sound international financial system. He pointed out in his statement to {Euphrates News} that "this shift aims to move away from informal financing from the parallel dollar market intensively, especially with the change in the behavior of small traders in avoiding the parallel market linked to the countries' regional and geopolitical problems."

Iraqi dinar hits nine-month high against US dollar

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On Sunday, the US Dollar was trading at 147,750 dinars, but it has since appreciated to 145,950 dinars, signaling a positive shift in the national currency's value.

This significant improvement is largely attributed to the effective measures implemented by the Central Bank of Iraq. The bank's consistent efforts in maintaining a steady supply of dollars, coupled with a decrease in demand for the US currency, have played a key role in strengthening the dinar.