On Monday, Ali Al-Alaq, the Governor of the Central Bank of Iraq, announced that the interest rate for deposits in banks has been increased to 7.5%. This move is aimed at encouraging citizens to deposit their money into banks and to discourage them from keeping their money outside the banks. The Ministerial Council for the Iraqi Economy has also confirmed that they are studying the possibility of increasing the interest on deposits.
This event took place during the presidency of the Iraqi Foreign Minister, Fuad Hussein. It was the 31st session of the Ministerial Council for the Economy, and was attended by the Ministers of Planning, Finance, Labor and Social Affairs, the Secretary-General of the Council of Ministers, the Governor of the Central Bank, the Undersecretary of the Ministry of Oil, the Vice-President of the National Investment Authority, the Chairman of the Securities Commission, and advisors to the President, specifically those involved with Economic and Legal Affairs.
Agency received a statement that the Council hosted Atwan Al-Atwani, Chairman of the Finance Committee in the Iraqi Parliament, and committee members to discuss the dollar exchange rates in Iraqi markets.
The Governor of the Central Bank of Iraq, Ali Al-Alaq, provided a detailed explanation of the tasks and objectives of the Central Bank and monetary policy in Iraq.
According to the statement, Al-Alaq noted that the exchange rate in Iraq is mainly influenced by imports and not local production. He also mentioned that the exchange rate in Iraq has unique characteristics because it is linked to the price of oil. As oil is the primary source of hard currency in Iraq, it has a significant impact on the exchange rate.
During his explanation, he stated that the exchange rate is influenced by multiple factors, with the most significant one being the outflow of the US dollar to neighboring countries, local market trades in currencies other than the national currency, and inadequate control over smuggling and ports.
Al-Alaq stated that inflation had significantly decreased and that officially imported goods were experiencing price stability due to being covered by the official price.
The Governor of the Central Bank has announced that a special lounge has been opened at Baghdad International Airport for private banks to sell dollars to travelers. In addition, the interest rate for deposits in banks has been raised to 7.5% to encourage citizens to deposit their money in banks and reduce the amount of cash held outside the banks.
The head of the Ministerial Council for the Economy, Fouad Hussein, has announced that after objective and serious discussions, the council will conduct a thorough study on the localization of salaries for all workers in the government sector, followed by the mixed sector and then the private sector.
Hussein stated that the Ministerial Council will review the possibility of raising the interest rates for deposits. He also mentioned that they aim to develop essential tools for the Central Bank and the Ministry of Finance, to help them carry out their duties effectively and efficiently.