A senior financial advisor to the Iraqi Prime Minister has said that nearly 90% of Iraq’s money supply is being held outside the banking system, with much of it stored in homes instead of financial institutions.
Mazhar Mohammed Salih explained that cash hoarding has long been a common practice in Iraq, but the situation has now reached a concerning level.
According to Salih, keeping such a large amount of money outside banks reduces the ability of the financial sector to support economic growth, provide credit and strengthen investment activity. Iraqi Dinar
He noted that when money remains outside the formal banking system, banks have fewer resources available for lending to businesses and individuals, which can slow economic development.
Salih stressed the importance of increasing public confidence in the banking sector and encouraging citizens to deposit their savings in banks rather than holding large amounts of cash at home.
He indicated that addressing this issue is an important step toward improving financial stability, expanding banking services and supporting broader economic reforms in Iraq.
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