Iraq Economic News and Points to Ponder Tuesday Evening 3-4-25
Iraq Sets July 2025 Deadline To End Cash Payments, Digitize Payroll
Prime Minister Mohammed Shia Al-Sudani Electronic Payment Systems -- 2024-11-04 Shafaq News/ Prime Minister Mohammed Shia Al-Sudani directed, on Monday, that salaries for private sector employees be processed through bank accounts, similar to the system for government employees, as part of a push to phase out cash payments across government institutions by July next year.
According to a statement issued by Al-Sudani’s media office, “In line with the government’s financial and economic reform plan, which is one of its top priorities, Al-Sudani has directed the implementation of several steps to enhance and develop electronic payment systems and services:
Work towards the domiciliation of salaries for private sector employees, similar to the public sector, by tasking the Ministry of Labor and Social Affairs and the Central Bank of Iraq to collaborate with select private sector institutions to establish an appropriate mechanism for this purpose.”
“All ministries and government institutions shall transition from cash payments to electronic payment for payment collections and related transactions. Each ministry or government institution must submit a comprehensive plan for this transition by December 31, 2024, with full implementation to commence by July 1, 2025,” as per the statement.
https://shafaq.com/en/Economy/Iraq-sets-July-2025-deadline-to-end-cash-payments-digitize-payroll
Iraq Pushes For Full Electronic Payment Transition By 2025
Published: 4th November, 2024 In alignment with Iraq’s ongoing financial and economic reform agenda, Prime Minister Mohammed S. Al-Sudani has directed the government to implement key initiatives aimed at advancing and modernising electronic payment systems and services across the country.
This move comes as part of broader efforts to streamline economic processes, reduce reliance on cash, and foster greater financial inclusion.
A significant step in this reform involves the domiciliation of salaries for private sector employees, a model already in practice within the public sector. To achieve this, the Prime Minister has mandated the Ministry of Labor and Social Affairs and the Central Bank of Iraq to engage with selected private sector institutions to devise a mechanism that will facilitate this transition. The aim is to enhance the financial stability of private sector workers and integrate them more effectively into the formal financial system.
Furthermore, in a bid to modernise public sector financial operations, Prime Minister Al-Sudani has instructed all ministries and government institutions to transition from cash-based payment methods to electronic payment systems for all transactions, including payment collections.
To ensure a smooth implementation, each ministry and institution is required to present a comprehensive transition plan by December 31, 2024. The full shift to electronic payments is expected to commence by July 1, 2025.
These initiatives mark a substantial effort to modernise Iraq’s financial infrastructure, reflecting the government’s commitment to economic growth, transparency, and technological advancement.
The Prime Minister’s Media Office continues to emphasise that these measures are pivotal for economic stability and will contribute to more efficient government operations and improved public services.
Source: Prime Minister Office https://www.iina.news/iraq-pushes-for-full-electronic-payment-transition-by-2025/
Government Advisor: Electronic Payment Enhances Dinar Stability, Shrinks Parallel Market
2025/03/04 Read: 1,275 times {Economic: Al Furat News} The financial advisor to the Prime Minister, Mazhar Muhammad Salih, confirmed that the public’s increasing conviction in using electronic payment cards for travel purposes or paying dues to small companies has achieved great success in reducing the size of the parallel market for the US dollar, which has contributed to its gradual decline.
Saleh explained in a statement to {Euphrates News} agency, that "the modern monetary policies that were recently implemented have proven their effectiveness in achieving financial and economic stability, as annual inflation rates have decreased to levels not exceeding 3%, which reflects the strength and stability of the Iraqi dinar against foreign currencies.
The financial advisor pointed out that the new monetary policy tools adopted by the Iraqi government, in cooperation with the Central Bank, have directly contributed to directing cash liquidity towards official channels, which has enhanced public confidence in the dinar and led to a reduction in informal transactions in the dollar.
Saleh stressed the importance of continuing efforts to enhance the use of electronic means in financial transactions, given its pivotal role in supporting the national economy and combating illegal practices associated with the parallel currency market.
He stressed that these achievements come within the framework of a comprehensive strategy aimed at achieving sustainable financial stability and enhancing the confidence of citizens and investors in the future of the Iraqi economy, calling on all segments of society to engage more in the use of electronic payment tools in the interest of the national economy. LINK
Al-Alaq: 20 Iraqi Banks Practice Direct Transfer Operations
Banks Economy News – Baghdad The Governor of the Central Bank, Ali Al-Alaq, confirmed today, Tuesday, that there are 20 Iraqi banks that practice direct transfer operations in 8 foreign currencies.
Al-Alaq said, in an interview with the Iraqi News Agency, followed by "Al-Eqtisad News", that "the recent quarterly meetings with the US Federal Reserve and the Treasury Department held in Dubai were very positive, as the steps taken by the Central Bank to improve the foreign transfer system and convert operations to international practices in a safe, transparent and highly organized manner were praised.
" Al-Alaq pointed out that "this transformation is the first of its kind in Iraq, which witnessed transitional stages from (the window) to (the platform) and then to correspondent banks."
He continued, "Today, there are 20 Iraqi banks practicing direct transfer operations with international correspondents in eight foreign currencies, within the new system."
Al-Alaq explained that "other banks that are still outside this framework are now working to qualify them according to specific standards, in cooperation with an international consulting company, to apply the necessary standards that qualify them to join foreign transfer operations."
He stressed that "there are no new sanctions or changes, but on the contrary, there is praise and appreciation from international bodies, especially with regard to the mechanism for selling cash dollars."
Al-Alaq stressed the "necessity of focusing on these successes to show a positive image of the transformations in the Iraqi banking sector, which will be positively reflected in the dealings of international financial institutions with Iraqi banks." https://economy-news.net/content.php?id=53121
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