On Tuesday, the Parliamentary Finance Committee approved the Central Bank of Iraq’s decision to increase the interest rate for bank depositors as a step towards revitalizing and organizing the banking system.
Moeen Al-Kadhimi, a member of the Finance Committee, stated that the increase in interest rates by the Central Bank is part of the banking reform measures and aligns with Prime Minister Muhammad Shia’a Al-Sudani’s directive to reorganize and revitalize the banking system in Iraq.
He said, “Increasing the interest rate will encourage people to deposit money in banks, which will boost financial activity and lead to investment in projects. This will have the added benefit of lowering the exchange rate of the US dollar compared to the Iraqi dinar.”
Al-Kadhimi mentioned that the Central Bank of Iraq is progressing towards full automation of financial transactions within the country.
On Monday, during the 31st session of the Ministerial Council for the Economy, Ali Al-Alaq, the Governor of the Central Bank of Iraq announced a rise in the interest rate for deposits made in banks to 7.5%. This decision aims to encourage citizens to deposit their money in banks instead of keeping it outside, and to withdraw cash from circulation.