Adnan al-Danbous, a senior member of the Reconstruction and Development parliamentary bloc, says Iraq’s liquidity crisis is mainly being driven by a lack of trust between citizens and the government.
According to al-Danbous, many people are choosing to keep their money at home instead of depositing it in banks. He believes this widespread hoarding has reduced the amount of Iraqi dinars circulating in the economy and contributed to the current cash shortage.
He explained that delays in paying government employees, contractors, and farmers are linked to a shortage of local currency in the state treasury. In his view, the problem is not a lack of U.S. dollars but a shortage of Iraqi dinars available within the financial system.
Al-Danbous said citizens have lost confidence because previous government promises were not fully delivered, leading many to avoid the banking sector and keep their savings outside the formal economy.
To address the problem, he called on the government and the Ministry of Finance to take practical steps to stimulate economic activity. He stressed the importance of supporting the agricultural and industrial sectors as a way to strengthen the local market and increase the flow of money throughout the economy.
He also urged authorities to expand lending programs for citizens, factory owners, and farmers, arguing that easier access to financing would help boost production and create economic growth.
In addition, al-Danbous called for stronger support for locally made products. He suggested enforcing laws that protect domestic industries and imposing higher customs duties on imported goods that compete with products already produced inside Iraq.
According to al-Danbous, rebuilding public confidence, increasing economic activity, and supporting local production are key steps toward easing the liquidity crisis and strengthening the country’s economy.
