Advisor to the Prime Minister for Financial Affairs: 95 trillion dinars are outside banks.
Advisor to the Prime Minister for Financial Affairs: 95 trillion dinars are outside banks.
2025-04-05
The Prime Minister’s Advisor for Financial Affairs, Mazhar Mohammed Saleh, stated on Saturday that expanding the use of digital payment systems and e-commerce opens the way for providing low-cost loans to citizens and contributes to reducing reliance on dangerous and illegal parallel markets. Saleh stated in a statement that “the positive steps in activating e-commerce are in line with the government and the Central Bank’s goals to integrate hoarded funds in households, known as cash leakages, into the formal banking system, which strengthens the national economy and contributes to achieving financial stability.”
He also pointed out that “the Monetary Authority has previously developed controls and procedures to regulate the issuance of e-commerce licenses, in a move aimed at regulating the market and enhancing consumer confidence.” He emphasized that “digital transformation projects, most notably the instant payments project, local cards, and unified payment gateways, represent an integrated strategy to enhance financial inclusion and facilitate banking transactions.”
Saleh continued, “Integrating these measures with information technology is in line with the digital renaissance the country is witnessing and contributes to changing society’s financial culture, especially in light of the ongoing phenomenon of hoarding money in homes, which is one of Iraq’s most prominent economic challenges.”
He explained that “estimates indicate that approximately 87% of the money supply, equivalent to 95 trillion dinars out of a total of 109 trillion, is still held outside the banking system, meaning a significant portion of the nation’s wealth is prevented from participating in the economic cycle.”
He also explained that “increasing reliance on digital payment systems and e-commerce enables official banks to expand their lending capacity at lower costs and greater efficiency, thanks to lower interest rates compared to those charged in the parallel market.”
Saleh warned, however, that “the parallel market for usurers represents a high-risk environment, not subject to any legal regulation, and imposing very high interest rates. Furthermore, some of its activities conflict with anti-money laundering laws due to a lack of transparency and governance, which increases trading and recovery risks.”
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