Comprehensive reforms to the Iraqi banking sector amid US pressure to combat currency smuggling.
With the end of the Oliver Wyman consulting firm’s mission approaching, the Central Bank of Iraq intends to launch a comprehensive reform initiative aimed at reviving the banking sector from its prolonged stagnation, promoting financial inclusion, and supporting economic expansion. This initiative includes updating payment systems, implementing strict governance standards, and increasing capital adequacy and liquidity for private banks.
This move comes amid escalating US pressure to confront the smuggling of hard currency, as Washington has imposed sanctions on 34 out of 44 banks, affecting their ability to conduct foreign transfers in dollars. Reports indicate that Iran has exploited this situation through financial networks and relations with influential militias and parties, making Iraq a vital economic outlet for it.
A banking expert confirmed that the current experimental phase represents an opportunity to assess the extent of banks’ commitment to the new standards, which include improving the ownership structure, conducting eligibility tests for board members, and developing internal audit and transparency systems. The spokesperson for the Central Bank of Iraq indicated that the bank is working in cooperation with international financial institutions to ensure the modernization of the sector’s financial infrastructure and the banks’ compliance with international standards, which contributes to gradually lifting the restrictions imposed on banks.
This plan represents a crucial step in combating dollar smuggling and strengthening the stability of the banking sector, but it comes in the context of major challenges related to suspicious transfers and regional influences on the local economy.
source: 961 today
