Liquidity crisis hits Iraq’s major state banks
Shafaq News- Baghdad
Government banks in Iraq, including Rafidain and Rasheed, are facing a severe liquidity shortage, with cash becoming increasingly scarce, an economic source told Shafaq News on Monday.
Citing security concerns, particularly the conflict involving the United States, Israel, and Iran, depositors have increasingly withdrawn funds from government banks, potentially threatening Iraq’s financial security and economic stability.
“At some Rafidain and Rasheed branches, customers are asked to wait or return later to access their full funds, while others provide only partial amounts, postponing the remainder,” the source explained, adding that these practices have affected service quality and weakened public confidence in the government banking sector.
The banks also continue to face administrative and legal challenges. Over the past years, modernization efforts have remained limited, with many relying heavily on paper-based processes instead of electronic systems and modern banking technology.
On February 28, the United States and Israel carried out airstrikes on targets inside Iran, including Tehran. The attacks caused significant damage and civilian casualties and killed Iranian Supreme Leader Ali Khamenei along with several senior Iranian Revolutionary Guard Corps (IRGC) commanders. Iran responded with retaliatory actions affecting multiple countries in the region, including Iraq, Israel, Jordan, Kuwait, Bahrain, Qatar, the United Arab Emirates, and Saudi Arabia.
