Resilience of Iraq's banking system: Economist's confidence amid US sanctions

Shafaq News/ Iraqi economists express confidence in the resilience of Iraq's banking system despite the sanctions that the US Treasury imposed on a group of banks in Iraq.

Mahmoud Dagher, an economic expert and former director-general of the Central Bank of Iraq (CBI), clarified that this measure was not a sanction, rather, it was a restriction, which adversely affected the banks, the people, and the import financing process.

However, Dagher emphasized in an interview with Shafaq News Agency, "despite the pressure and harm caused to these banks, the banking system will not collapse as a result of these sanctions and restrictions."

The US Treasury imposed the sanctions on 14 Iraqi banks in July 2023 as part of a campaign against Iran's dollar transactions. The sanctions were reportedly prompted by the banks' involvement in "suspicious" money transfers during the past year.

Deputy Prime Minister and Foreign Minister Fuad Hussein has appealed to the United States to reconsider the sanctions imposed on 21 Iraqi banks that contribute to financing essential food items for low-income families.

Furthermore, the CBI issued an official letter in February, indicating that 8 Iraqi banks were banned from participating in the foreign currency sale and purchase window.

Following the fall of Saddam Hussein's regime after the US invasion in 2003, Iraq's private banking sector has experienced significant growth, with over 70 private banks now operating in the country.