Iraq Embraces Digital Banking: Widespread Adoption of Bank Accounts and Payment Cards

The Central Bank of Iraq (CBI) has spearheaded a transformative shift in the nation's financial sector by implementing electronic banking procedures. These measures, supervised by the US Treasury Department, have significantly contributed to Iraq's economic growth and stability.

One of the most notable outcomes of this initiative is the substantial decline in the dollar exchange rate against the Iraqi dinar. Economist Jabbar Goran highlighted the impact of these changes, stating, *"The implementation of electronic procedures by the Central Bank of Iraq under the supervision of the US Treasury Department had a clear impact on economic growth, which also contributed to the decline in the value of the dollar against the Iraqi dinar."*

The CBI's efforts have also led to a significant increase in the use of electronic payment cards and bank accounts across Iraq. Currently, 90% of transactions in Iraq are conducted in dinars, with the exception of the Kurdistan Region. This shift towards digital transactions has facilitated easier and more secure financial dealings for both individuals and businesses.

Why this matters: The widespread adoption of digital banking in Iraq has significant implications for the country's economic growth and stability. This shift towards modernizing Iraq's financial infrastructure could lead to increased economic integration with the global economy and improved financial security for its citizens.

Local merchants have particularly benefited from these changes, as 85% of them can now handle external transfers through banks to import materials from abroad. This capability has streamlined the import process and integrated Iraq more closely with the global banking system. Economist Jabbar Goran noted, "The monetary financial policy currently followed in the country has made the difference between the exchange rate of the dollar and the dinar shrink to the limits of ten thousand dinars and this difference is considered normal for many reasons."

The Iraqi government's commitment to improving the country's economic situation has been evident through its support for the CBI's initiatives. By promoting the use of electronic payment systems and linking the Iraqi financial system to the global banking network, the government aims to develop a more robust and resilient economy.

As Iraq continues to embrace digital banking, the country's economic growth is expected to further accelerate. The widespread adoption of bank accounts and electronic payment cards marks a significant step towards modernizing Iraq's financial infrastructure and enhancing its integration with the global economy.

Key Takeaways

• Iraq's Central Bank implements electronic banking, supervised by US Treasury Department.
• Dollar exchange rate against Iraqi dinar declines significantly.
• 90% of transactions in Iraq are now conducted in dinars, with 85% of merchants handling external transfers.
• Digital banking adoption leads to increased economic integration and financial security.
• Iraq's economic growth expected to accelerate with continued digital banking adoption.