Central Bank: We will launch a major initiative to finance industrial projects
The Central Bank of Iraq announced on Sunday its intention to launch a major initiative to finance industrial projects in cooperation with the Trade Bank of Iraq and the Industrial Bank.
The video for this My FX Buddies Blogpost is below here:
"We are currently making arrangements to finance major industrial projects through coordination between the Trade Bank of Iraq and the Industrial Bank. This will be done by utilizing the liquidity available at the Trade Bank of Iraq and recycling this money in the Industrial Bank to launch a major initiative to finance industrial projects in Iraq, which will soon see the light of day," Central Bank Governor Ali Al-Alaq told the National News Agency, as reported by Kalamah News.
He added, "This initiative was recently proposed by the Cabinet as part of the government's banking sector reform program and government measures with the Central Bank," noting that "the Cabinet agreed to cooperate between government banks with a financial surplus to finance a package of industrial projects through the Industrial Bank."
He explained that "all other projects are funded according to their sectoral channels, as part of the government's general approach to supporting industrial, agricultural, housing, education, health, investment, and other projects."
from Kurdiish News MAR 30 25
Massive U.S. Airstrikes Hit 100+ Houthi Targets in Yemen
In a dramatic escalation of its military campaign in Yemen, the United States has launched what officials are calling the most extensive wave of airstrikes to date, targeting more than 100 Houthi-linked positions across six Yemeni provinces.
The strikes, which took place overnight, mark the most violent single night in Yemen since the U.S. began operations in the region aimed at deterring Houthi aggression in the Red Sea.
American fighter jets and drones carried out at least 44 airstrikes in Sanaa, Saada, Al-Hudaydah, Al-Jawf, Amran, and Marib. The campaign, according to U.S. officials, focused on degrading the Houthis' offensive capabilities and neutralizing key military infrastructure.
Targets included air defense systems, weapons depots, command centers, and facilities used to coordinate maritime attacks.
Speaking to The Wall Street Journal, a U.S. military official confirmed that several high-ranking Houthi commanders were killed in the operation. However, the official emphasized the challenge of gauging exact results due to the Houthis' tendency to downplay American successes and overstate their own retaliatory capabilities. "It is largely because of the nearly 10 years of support provided by Iran," he noted.
According to a detailed report by The Wall Street Journal, despite what President Trump called an “unbelievably successful” campaign, the strikes have not yet achieved the core objective of deterring the Houthis.
The group continues to fire missiles almost daily toward Israel and remains capable of harassing international shipping routes. Recent days have seen renewed attacks on the USS Harry S. Truman and commercial vessels transiting the Red Sea.
The Houthis, supported militarily and financially by Iran, maintain an extensive network of missile stockpiles and drone assembly lines, many believed to be hidden in rugged mountainous terrain and underground facilities.
The White House confirmed the latest strikes in a statement outlining their strategic objectives. "The targets included key Houthi leadership, air defense systems, command and control centers, and weapons manufacturing and storage sites," the statement read. The administration emphasized that operations will persist until the Red Sea is secured and safe passage for commercial and naval vessels is guaranteed.
The Houthi-affiliated Al-Masirah news outlet also reported on the attacks, claiming that dozens of airstrikes had targeted multiple locations across Yemen. According to the outlet, seven airstrikes hit the capital, Sanaa, including two that struck the city’s airport. Ten airstrikes were reported in Saada, while Al-Hudaydah and Al-Jawf each witnessed three. Nineteen airstrikes were said to have hit Amran, and four others targeted the province of Marib.
Houthi health authorities reported seven injuries in Sanaa’s Bani Hashish district, although there has been no independent confirmation of casualties.
While the strikes have reportedly killed dozens and damaged critical infrastructure, observers cited by The Wall Street Journal caution that airpower alone may be insufficient to defeat the Houthis. The group, which controls large swaths of Yemen including areas housing two-thirds of its population, has previously survived eight years of aerial bombardment by the Saudi-led coalition. Analysts warn that the group’s ability to endure and adapt, combined with its strategic use of asymmetric warfare, poses a persistent challenge.
The Journal also noted that this new phase of U.S. strikes appears far more targeted and coordinated than previous campaigns, aiming to dismantle the Houthis' senior command structure. Houthi leaders have reportedly reduced their social media presence and communications to avoid detection, while continuing to claim that their operations against the U.S. and Israel will persist.
This surge in military action comes amid a sustained campaign by the Houthis to disrupt maritime traffic through the Red Sea and the Bab al-Mandeb Strait. Their targeting of commercial vessels and alleged threats to global shipping lanes have prompted repeated warnings from Washington, culminating in this latest show of force.
U.S. officials have reiterated that the aim of the strikes is not only to protect maritime trade but also to degrade the operational command structure of the Iran-backed militia. While no new deployments have been announced, American military assets in the region remain on high alert for further retaliation or escalation by the Houthis or their regional backers.
With tensions rising and regional security hanging in the balance, the coming days will likely test the limits of military deterrence and the resolve of both the United States and the Houthis. As airstrikes continue and diplomatic efforts stall, Yemen once again finds itself at the center of a volatile geopolitical confrontation.
Parliamentary Committee: Political Disagreements Obstruct Passage of Oil and Gas Law
Th0e House of Representatives' Oil, Gas, and Natural Resources Committee acknowledged on Sunday that political differences are impeding the passage of the oil and gas law, stressing that consensus between Baghdad and Erbil is a prerequisite for its passage.
Committee member Bassem Al-Gharibawi told Al-Maalouma News Agency that “disagreements between the federal government and the Kurdistan Region are hindering the passage of the law in parliament.”
He pointed out that "political ambiguity remains an obstacle to resolving the issue during the current parliamentary session."
He pointed out that "the law is considered controversial legislation, and it can only be passed with political consensus among all parties."
Iraq surpasses Saudi Arabia in oil exports to the US
The U.S. Energy Information Administration announced on Sunday that Iraq's oil exports surpassed those of Saudi Arabia last week, reaching 203,000 barrels per day.
The administration explained, in its weekly schedule, that "the average US imports of crude oil from ten major countries reached 5.648 million barrels per day, an increase of 975,000 barrels from the previous week, when the average was 4.673 million barrels per day."
She added, "Iraq's oil exports to the United States have risen to 203,000 barrels per day, meaning that Iraq has surpassed Saudi Arabia, whose exports reached 144,000 barrels per day."
Regarding other countries, the administration indicated that "the largest US oil revenues last week came from Canada, at a rate of 3.983 million barrels per day, followed by Mexico, at a rate of 393,000 barrels per day, then Brazil, at a rate of 241,000 barrels per day, and Venezuela, at a rate of 195,000 barrels per day."
The report continued, explaining that US crude oil imports also included Colombia at a rate of 190,000 barrels per day, Saudi Arabia at a rate of 144,000 barrels per day, Ecuador at a rate of 127,000 barrels per day, and Libya and Nigeria at a rate of 86,000 barrels per day each.
Iraq's budget in limbo: Funding woes and oil risks grow
Iraq’s 2023–2025 budget, approved in June 2023, is the largest in the country’s history, allocating around 198.9 trillion dinars ($153 billion) annually. With a focus on infrastructure development, public sector salaries, and fostering economic growth, the budget promises to play a pivotal role in shaping Iraq’s future.
The Kurdistan Region is set to receive 12.67% of the total budget, amounting to over $12 billion annually. With oil prices projected at $70 per barrel, Iraq expects oil revenues to reach approximately 117 trillion dinars each year.
However, despite the budget's expansive scope, its implementation has faced significant obstacles. What was intended to be a smooth, multi-year framework has, instead, transformed into a series of annual plans, delaying progress and creating uncertainty.
Still, the government remains committed to ensuring economic stability.
Implementation Hurdles
Mudher Mohammed Saleh, financial adviser to Prime Minister Mohammed Shia Al-Sudani, reaffirmed that the 2025 budget is legally grounded under Law No. 13 of 2023, which mandates a three-year spending plan.
Saleh acknowledged delays in allocations but emphasized that 90% of Iraq’s financial operations remain unaffected, stating, "The financial and economic situation is stable, with a high degree of certainty." He underscored the close collaboration between legislative and executive authorities.
Nevertheless, slow disbursements have raised concerns. Moein Al-Kadhimi, a member of the Parliament’s finance committee, warned that delays in finalizing both operational and investment budgets could harm market liquidity, hinder businesses, and stifle economic growth. “The key issue isn’t just a budget approval, it’s funding,” Al-Kadhimi remarked.
Although the 2024 budget is in place, funding for regional development and ministries remains stalled, delaying new projects.
Al-Kadhimi projected total revenue from oil and non-oil sources at no more than 140 trillion dinars ($107 billion). He also called for a cap on allocations at 150 trillion dinars—127 trillion for operations and 23 trillion for investments—to preserve fiscal stability.
The Crude Calculation
Iraq’s heavy reliance on oil revenues continues to strain the country’s finances. The 2023 budget projected oil exports at 3.5 million barrels per day at $70 per barrel.
However, actual exports fell to 3.2 million barrels per day, creating a 3 trillion dinar ($2.3 billion) gap. This shortfall has compounded the financial pressure, with oil prices fluctuating between $60 and $80 per barrel.
Ahmed al-Jassim, a financial analyst, pointed out, "Oil prices, the backbone of Iraq’s budget, remain highly volatile. The government faces mounting pressure to manage expenditures carefully."
Looking ahead to 2025, Iraq anticipates a budget deficit of 64 trillion dinars ($48 billion), the same as in 2023 and 2024. While total budget allocations have risen from 198 trillion dinars to 211 trillion dinars, the persistent shortfall raises concerns about the need for increased borrowing, potentially draining foreign reserves and destabilizing the economy.
Former Prime Minister Mustafa al-Kadhimi stressed the importance of diversifying Iraq’s revenue sources to mitigate these risks.
With oil prices potentially falling to $60 per barrel, he emphasized the need to boost non-oil revenues through customs duties, taxes, telecom revenues, utility fees, and state property income.
"Current non-oil revenues are below 15 trillion dinars but should reach at least 30 trillion," al-Kadhimi asserted.
Despite these challenges, al-Kadhimi remains optimistic. As long as Iraq maintains an export rate of 3.5 million barrels per day, liquidity should remain intact, with a funding ceiling of 50 trillion dinars.
However, without significant reforms or a reduction in the deficit, Iraq risks excessive borrowing and depletion of foreign reserves, endangering long-term financial stability.
Baghdad-KRG Rift
The budget delays have been primarily driven by a long-standing dispute between Baghdad and the Kurdistan Regional Government (KRG).
Abdul-Hassan Al-Ziyadi, an economic expert, highlighted the inefficiency of Iraq’s budgeting process, which often extends for months, sometimes even a full year. "This uncertainty ripples across both public and private sectors, making strategic planning nearly impossible."
At the heart of the deadlock is a revision to Article 12, Section (C), which recalculates the cost of producing and transporting crude oil from the Kurdistan Region. Initially set at $10 per barrel, the cost was raised to $16, sparking disputes that have delayed the 2025 budget submission.
The conflict also reflects deeper political and economic rifts. The KRG insists on maintaining control over its oil revenues, a right it claims is enshrined in Iraq’s Constitution. However, Baghdad argues for central oversight, citing the national importance of oil revenues.
A key point of contention is Article 14 (7), which allows Baghdad to allocate funds directly to KRG provincial governments if the regional administration fails to distribute them fairly.
The Kurdistan Democratic Party (KDP) opposes this provision, with spokesperson Shaswar Abdulwahid describing it as “an unconstitutional power grab” that undermines the Kurdistan Region’s authority over its own resources. Baghdad, however, argues that the measure ensures equitable distribution of resources across Iraq.
Compounding the crisis is the KRG’s growing financial strain, exacerbated by the suspension of its independent oil exports through Turkiye.
Since March 2023, a dispute between Baghdad and Ankara over the legality of Kurdish oil exports has shut down the Ceyhan pipeline, severing the region’s primary revenue stream.
The resulting losses, estimated at $5 billion, have made it increasingly difficult for the KRG to meet its financial obligations, including salary payments.
Late Is Better Than Never
An official source revealed to Shafaq News that Iraq is preparing to submit its final 2025 budget to Parliament in the coming days.
The finalized budget is expected to be delivered either after the Eid al-Fitr holiday on March 31st or by mid-April for legal review. This schedule aligns with the government’s financial priorities and requirements.
The 2025 budget, projected at around $200 billion, faces a significant deficit. This gap is primarily due to a sharp decline in Iraq’s strategic reserves of gold and foreign currency, as well as liquidity shortages.
Furthermore, the government’s ongoing commitment to large-scale projects requiring substantial funding has put additional strain on Iraq’s finances.
As a result, the operational budget will see reductions, and the pace of government service projects will slow.
Sectors under Siege
Public Service Strain
The budget crisis has had far-reaching consequences, particularly in the public services sector. Disruptions in funding have left healthcare, education, and social programs in limbo, directly affecting millions of Iraqis who rely on government services.
Manar Al-Abidi, executive director of the Iraq Future Foundation, noted, "Each delay not only disrupts contractors and businesses but directly affects citizens. From hospitals to schools, funding interruptions have stalled essential services, straining the systems people depend on."
According to the Ministry of Planning, up to 30% of essential public services have been affected.
Salary delays for 2.5 million government employees, including teachers and doctors, have fuelled public frustration, while pensioners continue to struggle with delayed payments.
The Ministry of Health has warned that 60% of public hospitals are running low on essential medical supplies, forcing patients to seek private care.
Meanwhile, more than 7,000 schools have had operations delayed, impacting 2.8 million students and raising concerns about Iraq’s long-term educational prospects.
Economic researcher Ahmed Eid described the situation as a “major crisis” that could upend Iraq’s economic stability.
"A budget isn’t just a financial document, it’s the backbone of economic growth, job creation, and financial security," Eid emphasized.
He warned that continued delays risk stalling progress, scaring off investors, and weakening market confidence.
Private Sector Struggles
The private sector is also feeling the strain. The Ministry of Planning reports that 42% of key development projects planned for 2024, worth more than $12 billion, have been put on hold. This is particularly evident in the construction sector, where activity has dropped by 20% due to the suspension of government contracts.
Businesses dependent on public sector spending are also facing mounting challenges. "This delay is fuelling economic uncertainty," Eid cautioned. "Companies are hesitating to invest, and hiring freezes are spreading across industries."
The Federation of Iraqi Industries has reported that 35% of small and medium-sized enterprises have experienced declining revenues, while private sector employment has shrunk by 8% in the first quarter of 2024.
As the budget impasse continues, experts are urging a swift resolution. "The budget is not just about numbers—it’s about Iraq’s future," Eid concluded.
"It’s crucial that the government prioritize public interests over political bargaining to safeguard the country’s economic future."
Iraq is accelerating its efforts to wean itself off Iranian gas. What are the immediate alternatives?
Member of the Parliamentary Electricity and Energy Committee, Hatem Al-Saadi, confirmed on Sunday that the government has begun to look for alternatives to Iranian gas to power power plants, especially with the approaching summer season and increased energy demand. He also pointed to a number of alternatives to compensate for Iranian gas, which is under US sanctions.
Al-Sudani and Allawi discuss government efforts to achieve economic reform.
Prime Minister Mohammed Shia al-Sudani discussed with former Prime Minister Iyad Allawi on Saturday strengthening government efforts to achieve economic reform.
Prime Minister Mohammed Shia al-Sudani receives former Prime Minister Iyad Allawi, and they discuss strengthening government efforts to achieve economic reform.
Prime Minister: We renew our commitment to implementing the government's program and continuing to work under all circumstances without interruption.
A statement from the Prime Minister's Office, a copy of which was received by {Euphrates News}, quoted Al-Sudani as saying: "On the occasion of the blessed Eid al-Fitr, we pray to God Almighty to bless its days for our noble Iraqi people and for the entire Islamic nation, and to accept our acts of obedience, good deeds and striving to please Him, and to spread peace and security throughout the world."
He added, "We renew our commitment to implementing the government's program in all its service, social, and economic dimensions, and to continue working at all times and under all circumstances without interruption, and to exert every effort for reconstruction and development, in accordance with what is required by the supreme interests of our people and the aspirations of all its citizens."
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News for MON MAR 31 25
Trump to visit Saudi Arabia in mid-May
The American website Axios revealed the date of US President Donald Trump's visit to Saudi Arabia. The website quoted a source as saying: "Trump may visit Saudi Arabia on his first foreign trip in mid-May."
"This will be his first foreign trip since returning to the White House," he added. The website noted that Trump's first foreign trip during his previous presidency was also to Saudi Arabia. Earlier, Trump said he planned to visit Saudi Arabia, citing a major $1 trillion investment deal from the kingdom in the United States. When asked if he would meet Russian President Vladimir Putin in Saudi Arabia, Trump confirmed his intention to visit the kingdom, noting that commercial motives were primary. He recently said he decided to visit Saudi Arabia instead of Britain on his first trip in 2017 because the kingdom had promised to purchase $450 billion worth of American products. Trump has established close business ties with Saudi Arabia, with the Trump Organization announcing in December the construction of a Trump Tower in Jeddah. The Trump administration has pledged to move quickly to persuade Saudi Arabia to normalize relations with Israel.
Iraq's domestic debt is expected to rise to 81 trillion dinars in 2024.
The Central Bank of Iraq announced on Monday an increase in domestic debt, while also noting a decline in foreign reserves for 2024.
The bank stated in its report on monetary and financial indicators in Iraq, which was reviewed by the Iraq Observer, that "the Central Bank's net foreign reserves for 2024 amounted to 130.81 trillion dinars, a decrease of 10.18% compared to the same period in 2023, when they amounted to 145.64 trillion dinars."
He added, "The reason for the decline in foreign reserves is the rise in domestic public debt, which is needed to cover the real deficit in the state's general budget."
The report indicated that "Iraq's domestic public debt increased by 17.70% to reach 83.05 trillion dinars in 2024, compared to 70.56 trillion dinars in 2023."
Rafidain Bank CEO: The bank is at the beginning of a new phase with greater influence on the Iraqi financial landscape.
Al-Fatlawi said in a press statement, "The bank has witnessed a qualitative transformation in recent years, becoming a pillar of the modern Iraqi banking sector."
He explained, "We have contracted with the American University of Baghdad to implement advanced programs in banking management, financial risks, and compliance," noting that "advanced systems have been adopted to combat money laundering and terrorist financing, including the UN-backed GoAML system."
Al-Fatlawi continued, "We launched a team dedicated to developing banking initiatives and contributed to settling electronic payment revenues for most government departments."
He added, "We launched electronic payment services that made it easier for employees and retirees to receive their benefits. We aspire to make Rafidain Bank a model of banking leadership in Iraq and the region."
Rafidain Bank General Manager: Financial technology is the future of the banking sector in Iraq.
Rafidain Bank's General Manager, Ali Al-Fatlawi, confirmed that the bank has witnessed a qualitative transformation in recent years, becoming a pillar of the modern Iraqi banking sector through adopting financial technology, enhancing banking inclusion, and adhering to international standards of integrity and compliance.
Al-Fatlawi said in a statement reported by the official news agency, and reviewed by "Al-Eqtisad News," that the success was not merely the result of administrative decisions, but rather an integrated vision based on investing in human capital, building strategic partnerships, and upgrading banking services in accordance with the latest international standards.
Al-Fatlawi believes that no financial institution can achieve success and sustainability without qualified personnel possessing modern skills. Therefore, investing in the development of the bank's employees was one of our main priorities. We allocated large budgets for training, sent our staff to educational programs inside and outside Iraq, and contracted with the American University in Baghdad to implement advanced programs in banking management, financial risks, and compliance.
The General Manager of Rafidain Bank added that enhancing financial integrity was a priority, and we adopted advanced systems to combat money laundering and terrorist financing, including the UN-supported GoAML system, and cooperated with the global company K2 to develop compliance systems. He indicated that these steps strengthened the confidence of international regulatory and banking authorities in the bank and contributed to improving our position in the financial market.
He pointed out that financial inclusion is not an option, but an economic necessity. Therefore, we launched a team specialized in developing banking initiatives and contributed to the settlement of electronic payment revenues for most government departments, which reduced reliance on cash. We also launched electronic payment services that facilitated the easy collection of dues for employees and retirees.
He announced the launch of the ATM service for the first time, and the introduction of a savings card as a new service to enable customers to invest their money intelligently. We are also in the process of issuing a credit card, which will facilitate financial transactions inside and outside Iraq, placing us among the ranks of digitally advanced banks.
The General Manager of Rafidain Bank pointed to the establishment of partnerships with global institutions such as Ernst & Young (EY) to develop banking governance, and with K2 Global to enhance financial compliance, noting that these partnerships have increased the efficiency of our operations and made us more compliant with international banking standards.
He explained that Rafidain Bank is at the beginning of a new, more advanced and influential phase in the Iraqi financial landscape, as we continue to launch digital services, enhance financial inclusion, and expand our international partnerships. He indicated that we aspire to make Rafidain Bank a model of banking leadership in Iraq and the region.
Iranian Revolutionary Guard officers respond to Trump's threats
In response to US warnings, Iranian Revolutionary Guards Commander Major General Hossein Salami said on Monday (March 31, 2025) that "the enemy has not learned a lesson from the events that took place over the past decades."
Salami pointed out that the "enemy's" use of threatening language toward the Iranian people is a repetition of a failed habit.
For his part, the deputy commander of the Revolutionary Guards, Brigadier General Fadavi, told foreign media: "The possibility of harming the United States at sea is very great. 40% of the world's oil exports pass through the Strait of Hormuz, and we control it."
The commander of the Iranian Revolutionary Guard Corps' Air Force, Ali Hajizadeh, also threatened the Americans with strikes against their bases in the region, particularly those surrounding Iran, in response to recent US threats.
"The United States has at least 10 military bases in the region, especially around Iran, with more than 50,000 troops. This means they are sitting in a glass house," Hajizadeh said on the sidelines of Eid al-Fitr prayers in Tehran.
He added, "Those who sit in a glass house should not throw stones at others."
It's worth noting that US President Donald Trump warned Iran in remarks on Sunday that if it did not adhere to the agreement, it would face an unprecedented military response.
This morning, the Iranian Foreign Ministry summoned the Swiss ambassador to Tehran, who represents US interests in Iran, and delivered an official memorandum warning against any hostile actions and affirming the Islamic Republic of Iran's resolve to respond decisively and immediately to any threat.
Trump expresses his willingness to cooperate with Tehran if that is Iran's goal.
US President Donald Trump expressed his willingness to cooperate with Tehran on Monday (March 31, 2025) if that was "Iran's goal."
Yesterday, Trump issued a strong threat to Iran, threatening to bomb it and impose secondary tariffs if it did not reach an agreement on its nuclear program with the United States.
"If they don't make a deal, there will be a bombing," Trump said in an interview with NBC News.
Trump also indicated the possibility of reimposing economic restrictions, similar to his previous measures.
"There's a possibility that if they don't make a deal, I'll impose secondary tariffs on them, just like I did four years ago," Trump told NBC's Kristen Welker. "That put them in a position they were desperately seeking."
During his first term, Trump withdrew from the 2015 nuclear agreement between Iran and world powers, which imposed strong restrictions on Tehran's controversial nuclear program in exchange for sanctions relief.
The Iranian president said on Sunday that the Islamic Republic rejects direct negotiations with the United States over its rapidly advancing nuclear program, in Tehran's first response to a letter sent by President Donald Trump to Iranian Supreme Leader Ali Khamenei.
OTHER NEWS
Video: Iraq's Economy between US, Iran: Perceptions & Realities
The London School of Economics (LSE)'s Middle East Centre has hosted a talk by Ahmed Tabaqchali, exploring the economic and financial interactions of the Iraqi economy with the outside world, particularly the use of the dollar in relation to Iran and the US.
While the US' Iraq policy is still fluid, there have been signs that America's 'maximum pressure campaign' towards Iran will have spillover effects in Iraq, with the Trump administration viewing policy towards Iraq solely through the lens of a perceived threat of Iranian dominance in the country. Iran's economic footprint in Iraq, both perceived and real, will be an issue for Iraq and its relationship with the US and the West.
According to Tabaqchali's data, in 2024 China imported about 95 percent of Iran's 1.55 mbpd of oil exports, worth $36 billion; $3bn of LPG, and $11 billion in other imports, for a total of $50 billion, using an extensive global financial web. In the same period, Iraq imported $3 billion in gas and electricity (which Iran does not receive and which are governed by waivers for humanitarian goods), and $7.7 billion of private sector imports. "So," argues Tabaqchali, "which is the lung here?"
The session, chaired by Toby Dodge, ended by a lively 40 min Q&A session.
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