Shafaq News- Baghdad

Iraq’s Central Bank (CBI) cleared private banks to resume cross-border transactions and issue letters of credit in multiple foreign currencies, in a move aimed at strengthening trade financing and accelerating banking reform, the CBI said on Thursday.

In a statement, the bank noted it completed “a key phase of a comprehensive reform process covering commercial and Islamic banks and branches of foreign banks.” The step required institutions to submit documentation for review under “minimum requirements,” selecting one of three paths: continuing operations as independent banking institutions, merging with other banks, or exiting the market.

All Iraqi banks have submitted the required documents in line with the path each chose, and they will address any identified gaps in the coming months, the CBI added.

Under the new initiative, private banks that meet specific standards based on the central bank’s assessment will be permitted to resume cross-border transactions and issue letters of credit in several international currencies, including the euro, UAE dirham, Chinese yuan, and Jordanian dinar, among others.