Al-Alaq: The Central Bank is working on two plans to reform the banking system... We have entered advanced stages.
n Friday, October 31, 2025, Central Bank Governor Ali Al-Alaq spoke about the details of two plans the bank is working on as part of reforming the banking sector, noting that the reform process has entered advanced stages .
Al-Alaq said in a press statement followed by “Al-Jabal” that “the Central Bank is now working intensively on two plans: the first to reform the government banking sector, and the second to reform private banks, in cooperation with an international company.”
The video for this My FX Buddies Blog is below here:
He added, “The two plans have made very significant progress, and we are now in advanced stages of this work. We expect to proceed with steady steps within the plan, which will lead to the achievement of a stable banking sector, capable of communicating with the outside world and of making a qualitative contribution to the national economy. It will also be able to keep pace with global transformations, especially digital ones, and respond to the requirements of various economic aspects, in harmony with general trends and major transformations.”
He pointed out that “the banking sector reform operations today are not formal or patchwork procedures, but rather radical operations related to rebuilding the banking sector,” indicating that “banks are now facing a historic decision,” noting that “the reform plan has faced mixed reactions, but the Central Bank has been clear in its position on reform.”
Al-Alaq stressed that “a meeting was held with all banks, and we explained that this plan is not an option, but rather a path linked to local and international legal, regulatory, financial and digital requirements that cannot be ignored, and there is a strong determination to implement it.”
He continued, "We have entered into a series of dialogues and discussions with the banks and listened to the different viewpoints," noting that "there is a very high rate of response from most banks to enter into the reform plan and they have given a commitment to that," explaining, "We are about to start a new phase to follow up on the implementation of the reform steps."
Al-Alaq indicated in his speech that "within five years or sooner, we will witness a different banking sector in Iraq."
The Central Bank confirms a rapid response from banks to join the banking reform plan.
Central Bank's Precautionary Foreign Reserves
In line with the strategy and principle of disclosure and transparency that the Central Bank operates on in its internal and international banking transactions.
The monetary policy indicators up to the first half of 2025 show that foreign exchange reserves reached around $100 billion, which covers the issued local currency, which amounts to around 98.4 trillion dinars, which recorded a decrease of 3.8% compared to the same period of 2024. The decrease in the issued local currency contributed to a decrease in the inflation rate to 0.8%, a decrease of 76% compared to 2024, and had a significant impact on maintaining the general price level.
Furthermore, foreign reserves at their current level are sufficient to cover 18 months of imports. In addition, there is a gold reserve of 167 tons, ranking fourth in the Arab world and thirtieth globally according to the World Gold Council. This constitutes an important part of Iraq's foreign reserves, recording a significant growth rate of 55% up to the first half of 2025, reaching a value of 22.8 trillion dinars compared to 14.7 trillion dinars in the second half of 2024. The safe investments of these reserves have contributed significantly to the growth of investment portfolios, accompanied by a healthy growth in returns to these portfolios.
We emphasize here that the growth rates achieved in foreign reserves were consistent with the Central Bank’s plan to enhance returns and build capabilities in the field of self-management of reserves, which enabled the establishment of international banking relationships and the entry into agreements and memoranda of understanding with classified international banks, reputable financial institutions, international financing and consulting organizations, the Arab Monetary Fund, and international institutions concerned with investment management, and contributed to helping our banks build international banking relationships with correspondent banks in accordance with the Central Bank’s plan to regulate foreign trade financing and implement the comprehensive banking reform program.
Government advisor: Adopting a loan default insurance policy represents a qualitative shift in the lending structure.
The Prime Minister’s financial advisor, Mazhar Muhammad Saleh, confirmed on Thursday that the Cabinet’s recent decision to adopt an insurance policy against default on payments instead of a guarantor for housing loans for employees represents a qualitative shift in the structure of bank lending towards enhancing financial inclusion and simplifying procedures.
Saleh told the Iraqi News Agency (INA): “The Cabinet’s decision to adopt an insurance policy against default on payments instead of a guarantor for housing loans for employees whose salaries are deposited represents a qualitative shift in the structure of bank lending towards enhancing financial inclusion and simplifying the procedures addressed by the government program, and is an important aspect of the economic reform process in its financial and banking aspects.”
He added: “Therefore, adopting the insurance policy constitutes a double guarantee, as it gives the citizen ease in obtaining the loan without a guarantor, and at the same time provides banks with full protection from the risks of default, which speeds up the lending cycle and increases the efficiency of Iraq’s financial system.”
He pointed out that "this step will positively impact investment in the housing sector by increasing demand for housing units and stimulating the construction and building industries, which will contribute to reducing costs and prices as a result of expanding supply and growing competition."
He explained that “the insurance policy will open up broad horizons for national insurance companies to achieve regular returns from insurance premiums, which will lead to a revival of the insurance business environment and an expansion of its products within the framework of developing the national financial market, and that such a transformation will establish an effective partnership or integration between the banking system and the insurance sector within what is known globally as (bancassurance ) .”
He added that “adopting the insurance policy instead of the guarantor is not just an administrative procedure, but a structural reform in the national financing system that supports the construction and housing sectors, stimulates the labor market, and at the same time lays the foundations for financial and economic integration that contributes to achieving the goals of sustainable development and is consistent with the principles and objectives of the National Development Plan 2024-2028.”
He noted that “the insurance policy referred to in the Cabinet’s decision is an insurance guarantee that covers the bank against the risk of the borrower not paying the loan installments for any reason (such as death, total disability, loss of employment, or any force majeure circumstances that prevent payment), but under this policy the borrower pays a simple insurance premium once or annually according to the insurance requirements, and in return the insurance company undertakes to pay the remaining amount of the loan to the bank in the event that the borrower defaults on payment for force majeure reasons, and coverage for the risks of payment continues throughout the entire loan term.”
The Central Bank of Iraq obtains the international business continuity certificate (ISO 22301:2019
Iraq and Britain discuss activating bilateral agreements and memoranda of understanding.
Prime Minister Mohammed Shia al-Sudani affirmed Iraq's openness to all areas of cooperation and the development of its investment environment.
In a phone call with British Foreign Secretary Yvette Cooper, al-Sudani stated, "Iraq is open to all areas of cooperation, and the investment environment in Iraq is developing in a way that attracts international companies and enhances their opportunities to contribute to the major strategic projects launched in the country."
According to a statement from the Prime Minister's office, the call addressed joint cooperation in the fields of economy, trade, development, and infrastructure projects, as well as activating bilateral agreements and memoranda of understanding to strengthen exchange and partnership.
Minister Cooper affirmed her country's desire to strengthen cooperation with Iraq in various fields. She praised the policies pursued by the Iraqi government to enhance Iraq's economic capabilities.
Sudani: We are committed to implementing reforms, provided they do not affect citizens with limited income.
Prime Minister Mohammed Shia al-Sudani received a group of tribal sheikhs, religious figures, dignitaries, and academic and social elites from the al-Bayaa, al-Amil, and al-Jihad districts in southern Baghdad on Friday.
Al-Sudani noted that the government, during its three years in office, has worked to implement the priorities of its program, within a framework that includes a vision and methodology for building a state based on serving the people and preserving the country's stability.
He emphasized that the government has not shirked its responsibilities and has worked according to a plan and program to complete stalled and suspended projects and launch new ones. He explained that the government has spent only 12 trillion dinars on service projects and has been able to achieve significant accomplishments.
He added, "Our government has dedicated efforts to completing stalled projects, particularly in the health sector, and we have completed projects for eight hospitals in Baghdad alone." He pointed out that oil cannot be relied upon as the sole source of income in the long term, as it is subject to price fluctuations and regional events.
He explained that "spending has increased significantly due to the budget deficit approved by the Council of Representatives, and some are deliberately misleading public opinion for their own purposes." He clarified that "the state's expenditure in 2024 was 150 trillion dinars out of a total budget of 220 trillion dinars."
He continued, "Our government is committed to implementing reforms in various sectors, provided that they do not negatively impact citizens with limited incomes. We inherited 2,582 stalled projects, some dating back to 2005, with a value of 131 trillion dinars." He emphasized that "our government has outlined the features of Iraq's foreign policies and relations, based on the exchange of mutual benefit and shared interests, while preserving sovereignty."
Want to Support My FX Buddies?
.png)
Support My FX Buddies Big or Small I appreciate it all
BuyMeACoffee CashApp:$tishwash
https://paypal.me/tishwash
.jpeg)
The Central Bank of Iraq obtains the international business continuity certificate (ISO 22301:2019
Trump's envoy: Iraq is of paramount importance to the region and the United States
The new US envoy to Iraq, Mark Savaya, affirmed on Friday that Iraq is of paramount importance to the region and the United States, and that it is one of the United States' strongest and most valuable partners, stressing that the Iraqi leadership has taken important steps to steer the country in the right direction.
In a statement posted on his X platform account, Savaya said: “Over the past three years, the Iraqi leadership has taken important steps to steer the country in the right direction, politically and economically, and Iraq has begun to recover as a sovereign state, working to reduce external influences and put all weapons under government control.” He added that “Iraq still needs continued support to continue this path and that there will be no place for armed groups operating outside the authority of the state in Iraq, and all groups must be unified under one leadership.”
He added that “Iraq’s stability and prosperity depend on the existence of unified security forces under the leadership of one government and one flag that represents all Iraqis,” noting that “the interests of the Iraqi people and the region as a whole depend on an Iraq that enjoys full sovereignty, is free from foreign interference, and is committed to serving its citizens and living in peace with its neighbors.”
He pointed out that “unity and cooperation between the Iraqi federal and regional authorities are essential to ensuring sustainable security, economic growth and national cohesion,” noting that “Iraq is a pivotal country in the region, and it must play its natural role in promoting peace, security and regional stability, and Iraq should not go back to the past or adopt an approach that hinders progress and unity.”
The US envoy continued: “My mission, on behalf of President Trump, is to engage with Iraq and support its ongoing pursuit of stability, sovereignty, and prosperity. Iraq remains of vital importance to both the region and the United States, and will remain one of America’s strongest and most valued partners. I am committed to strengthening this relationship as I assume this honorable role as envoy.”
A rare opportunity
The US interest rate cut and its impact on Iraq: A new test of the seriousness of "investing" in global changes
In a move closely watched by the world, the US Federal Reserve decided to cut interest rates by a quarter of a percentage point, bringing them to a range of 3.75% to 4%, marking its second such cut this year. The decision, aimed at supporting sluggish US growth and stimulating spending, has reignited questions about its repercussions on dollar-linked economies, most notably Iraq.
Although the decision was made thousands of kilometers from Baghdad, its financial repercussions are far from insignificant. The Iraqi dinar has been pegged to the dollar for nearly two decades, and monetary policy in Baghdad moves cautiously in response to every change emanating from Washington. However, as economic expert Rashid al-Saadi explained to Baghdad Today, "The potential effects will be indirect and limited in the short term, because the Central Bank of Iraq's policy is geared more towards stabilizing the exchange rate than adjusting interest rates."
Iraq lives in the shadow of US monetary policy: every move in the interest rate there leaves its mark on the financial mood here, but belatedly and within a narrow scope.
Al-Saadi explains that the interest rate cut "could lead to a slight decline in returns on dollar-denominated assets globally, prompting some investors to look to emerging markets, which could boost limited financial flows into the region." However, Baghdad is not yet a magnet for such funds due to a sluggish investment environment and weak regulatory confidence.
In contrast, experts say the stability of the dinar is paramount. The Central Bank of Iraq has pegged the currency at around 1,300 dinars to the dollar for over two years and does not rely on interest rates as a primary monetary policy tool, unlike Western central banks. Therefore, the US decision will not fundamentally alter the course of Iraqi monetary policy, but it may open up greater flexibility for government financing if the cost of borrowing in dollars decreases globally.
Another impact comes through the oil sector. Al-Saadi believes that “a reduction in US interest rates could support global energy demand if economic activity in the United States improves, which would positively affect oil prices,” adding that this “could translate into an increase in public revenues and a decrease in the cost of external borrowing, which could provide cheaper financing opportunities for government projects in the future.”
Analysts point out that this oil link is crucial for Iraq, as over 85% of its public revenues come from crude oil sales. If prices rise thanks to US economic stimulus, the Iraqi budget automatically benefits from an additional influx of funds, even if domestic interest rates are not directly affected.
The recent interest rate cut may give emerging markets some breathing room after two years of US monetary tightening, but turning this breathing room into actual investment requires serious domestic reforms.
Al-Saadi says: “Iraq needs to capitalize on such developments in global monetary policy to promote economic diversification and improve the local investment environment, benefiting from any stability or stimulus in the US economy, which continues to influence global markets.”
In other words, the impact of the American decision will not bring about change in Iraq, but it can help those who prepare for it. Opening new investment markets, simplifying banking procedures, and expanding the base of non-oil projects are all factors that can make Iraq a beneficiary rather than a spectator.
Observers believe that pegging the dinar to the dollar has been a stabilizing factor for political and economic stability in a turbulent country for decades. However, it has also made Iraqi monetary policy more dependent than independent. When the Federal Reserve raises interest rates, Iraq remains neutral, and when it lowers them, so does Iraq.
This stability spares the Iraqi market sharp fluctuations, but at the same time deprives it of flexible tools to cope with changes. While other countries benefit from interest rate cuts to stimulate investment, Iraq remains constrained by exchange rate restrictions and dollar financing limitations.
However, this system remains the least risky option, as it provides the dinar with a safety net in a country that relies on oil to finance more than 90% of its budget and imports most of its needs in dollars. A US interest rate cut does not mean Iraq will enter a period of immediate financial prosperity, but it sends a positive signal to global markets that may gradually have repercussions for countries pegged to the dollar.
The real impact will appear if the decision is accompanied by a rise in oil prices or an improvement in global liquidity, but the Iraqi economic structure still needs more than an external decision to change, according to economic affairs specialists.
Washington identifies potential targets in Venezuela and hints at imminent strikes.
Sources familiar with the matter told the Miami Herald and the Wall Street Journal that Washington could launch airstrikes against these targets "within days or even hours," while the decision on a ground strike has not yet been finalized. The sources confirmed that the aim is to send a clear message to Venezuelan President Nicolás Maduro that "it is time for him to step down."
This comes amid an intensified US military presence near Venezuela, including the deployment of the world's largest aircraft carrier and the dispatch of warships to Trinidad and Tobago, about 10 kilometers from the Venezuelan border.
Trump accused Maduro of involvement in drug trafficking, while the latter denied this, asserting that Washington is using the drug issue to change the regime and control Venezuelan oil, calling for avoiding a "crazy war".
Since last September, the United States has conducted airstrikes in the Caribbean and Pacific Oceans against boats suspected of being used for drug smuggling, resulting in the deaths of at least 43 people.
Trump’s pot shop pal takes charge of Iraq with MAGA message
The new US special envoy to Iraq and the founder of a chain of marijuana dispensaries says his mission is to help Iraq shun resistance groups and free it from what it called "external interference", after President Donald Trump stressed that Mark Savaya will help "advance the interests" of Washington in the Arab country.
In an official statement published on his X account on Friday, Mark Savaya, a Michigan-based businessman of Iraqi descent, began with an acknowledgment of the recent progress made in Iraq.
“Over the past three years, Iraq’s leadership has taken important steps to guide the country in the right direction, both politically and economically," Savaya wrote.
“Iraq has begun to reemerge as a sovereign state, working to reduce external influences, bring all weapons under the control of the legitimate government, and open its markets to international companies to help rebuild and develop the country’s fragile infrastructure,” he added.
Savaya, however, described this progress as “incomplete”, emphasizing Washington’s opposition to the presence of anti-terror and resistance groups in the country.
“However, the work is not yet complete, and Iraq still requires continued support to remain on this path.”
“The United States Government has made it clear that there is no place for armed groups operating outside the authority of the state,” Savaya said, linking the nation’s entire future to the resolution of these groups.
“The interests of the Iraqi people and of the wider region depend on a fully sovereign Iraq, free from malign external interference,” he stated, referring to the Arab country's anti-terror groups as “Iran’ proxies”.
His remarks come despite the illegal US military presence in Iraq and implicitly dismiss the history of how these Iraqi resistance groups emerged and how they have been woven into Iraq’s security landscape.
After the rise of Daesh in 2014, a range of Iraqi paramilitary formations—including those under the umbrella of the Popular Mobilization Forces (PMF)—played a key role in battling the extremist group.
In his inaugural statement, Savaya added that his mission also aims to strengthen bilateral relations with Baghdad.
“Iraq remains of great importance to both the region and the United States. It will continue to stand as one of America’s strongest and most valued partners, and I am committed to further strengthening this relationship as I assume this honorable role as Envoy. MAKE IRAQ GREAT AGAIN,” Savaya concluded, echoing a refrain reminiscent of Trump’s presidential campaign's slogan: “Make America Great Again”.
Announcing his appointment as special envoy to Iraq on October 19, Trump confirmed that “Mark’s deep understanding of the Iraq-US relationship, and his connections in the region, will help advance the interests of the American people.”
Savaya has no government experience at the local, state or federal level, but was “a key player in my [Trump’s] campaign in Michigan”.
He’s a business owner in the area around Detroit, where he founded a chain of marijuana dispensaries.
Last month, the United States designated four popular groups in Iraq as terrorist organizations over their alleged links to Iran.
In a statement on its website on September 17, the US State Department said it had designated Harakat al-Nujaba, Kata’ib Sayyid al-Shuhada, Harakat Ansar Allah al-Awfiya, and Kata’ib al-Imam Ali as Foreign Terrorist Organizations.
Iran has openly declared that it has a policy to support groups and entities that fight occupation and bullying in the West Asia region.
However, the country has indicated that those groups are entirely independent in their decision-making and do not receive direct orders from Tehran.
Video Title
Washington Affirms Support for Iraq's Path to Stability, Sovereignty, and Prosperity
https://www.youtube.com/watch?
This message comes from Washington to Baghdad:
0:04
This time with a new voice but a clear message.
0:09
The United States affirms its support for Iraq's path towards
0:14
stability, sovereignty, and prosperity in its statement.
0:17
The first since his appointment as Special Envoy of the President
0:20
American President Donald Trump. Mark Savaya affirmed that
0:24
Iraq is moving in the right direction politically
0:28
and economically after steps he described as important to strengthen
0:32
state institutions and reduce foreign interference.
0:37
Savaya stressed that Iraq's stability will not be achieved
0:41
except through unifying the security forces under
0:44
the banner of the central government, and that there is no room for any
0:48
force operating outside State authority, and in doing so, he places
0:53
the security decision-making unit at the heart of policy
0:55
American policy towards Baghdad, and in an indirect
0:59 signal, the US envoy warned against foreign interventions
1:03, stressing that the future of Iraq and the region
1:07
depends on neutralizing negative influences
1:10
regional, especially those that affect the sovereignty
1:14
of the country. Economically, Savaya called for opening
1:18
markets to international companies to participate in
1:21
the reconstruction of Iraqi infrastructure in
1:24
a step that shows Washington's desire to link political stability with economic prosperity
1:28
with this speech, the Trump administration is outlining a new phase
1:36
in relations with Baghdad, a phase based on
1:40
supporting the central state and opening the door Imam
1:44
Long-term economic partnership
No comments:
Post a Comment