Prime Minister’s Advisor Explains Details Of “Bridge Borrowing”
Economy Yesterday, 13:19 Baghdad- WAA- Amna Al-Salami The Prime Minister’s Advisor, Mazhar Muhammad Salih, explained today, Thursday, the details of “bridge borrowing“, while indicating that
more than 50% of the domestic debt is concentrated in the investment portfolio of the Central Bank. Saleh told the Iraqi News Agency (INA):
“Historically, government borrowing through treasury transfers is a type of short-term borrowing from the banking market that British public finance has adopted since the reign of Queen Victoria.”
He added that “this type of borrowing was done for limited periods not exceeding weeks or financial quarters, and is known as (bridge borrowing), as
it aims to bridge the temporary deficit gap resulting from the slowdown in revenues compared to actual expenditures.” He pointed out that
“due to the monthly financial obligations, public finance may resort to issuing treasury transfers as a financing tool to bridge the temporary deficit in the budget until cash flow stabilizes in the next period of the fiscal year.” He added that
“in light of the fluctuations in the oil revenue cycle on the general budget over the past ten years, the government was forced to borrow multiple and accumulated,
which led to an increase in expenditures in three stages: the
first during the war on ISIS terrorism, the
second due to the economic closure caused by the pandemic, and
finally the increase in expenditures in the areas of reconstruction and implementation of suspended projects.” He added that
“these circumstances resulted in the accumulation of domestic public debt, part of which was borne by government banks, as more than half of it was deducted from the Central Bank of Iraq through open market operations.” He stressed that
“this necessitated a complementary monetary issuance that led to a significant increase in the monetary mass,
especially since the domestic public debt, amounting to 82 trillion dinars, is still mostly within the government financial and banking system, more than 50% of this debt is concentrated in the investment portfolio of the Central Bank.” He added,
“On the positive side, this debt is covered by foreign currency by more than 100%, which reflects a high level of monetary stability, as the annual inflation growth rate did not exceed 3%.”
He added that “despite these challenges, both the monetary and fiscal authorities seek continuous consultation in order to gradually extinguish the domestic debt,” stressing that
“the government relies on enhancing financial sustainability by reducing the public debt balance annually and
reducing the annual budget deficit to a percentage not exceeding 3% of the gross domestic product.” He concluded that
“this approach is part of a fiscal policy aimed at providing financing and protecting economic activity, which contributes to achieving stability and sustainable economic growth through coordination between fiscal and monetary policies.”
https://www.ina.iq/229426–.html
In Numbers … The Banking Sector During 2024 Is Witnessing A Decrease In Total Deposits
Economics 2025-03-06 |Source: Alsumaria News 616 Viewed Alsumaria News -banking sector witnessed During the year 2024, the Iraqi a noticeable decrease in total deposits, as
it decreased by 9%, to decrease from 133.5 trillion Iraqi Iraq Future Foundation dinars at the end of 2023 to 123.5 trillion Iraqi dinars, registering a loss of 10 trillion dinars, according to a report published by the independent concerned with economic affairs.
The head of the Foundation, Manar Al-Ubaidi, said in a post that Alsumaria News followed,
this decline is mainly due to a decrease in government sector deposits by 14%, as it decreased from 47.3 trillion dinars to 42.8 trillion dinars.
The deposits of public institutions decreased by 7.4%, declining from 29.6 trillion dinars to 27.4 trillion dinars. As for the
deposits of the private sector, it witnessed a decrease of 6.52%, as it decreased from 56.5 trillion dinars to 53.2 trillion dinars. At the level of the types of deposits, the
current deposits recorded the largest decline by 11.6%, to decrease from 107.5 trillion dinars at the end of 2023 to 97.4 trillion dinars. As for
fixed deposits, it declined slightly, from 9.67 trillion dinars to 9.62 trillion dinars, in return, the
savings deposits witnessed a marginal increase of 0.7%, up from 16.3 trillion dinars to 16.43 trillion dinars, according to Al-Ubaidi.
Al-Ubaidi added that this decline raises important questions about the impact of the trend towards electronic payment and the use of modern payment techniques on the banking sector. As
it was expected that the spread of these technologies will contribute to increasing the volume of deposits, especially the ongoing ones, by stimulating banking transactions and reducing dependence on criticism. However, the
current data reflects a different reality, which requires reviewing electronic payment mechanisms and assessing the extent of their effectiveness in achieving the desired financial and banking goals. He added that
electronic payment is a means, not an end, as
it is supposed to contribute to enhancing financial inclusion and increasing dependence on banks by raising deposit rates.
As bank deposits continue to decline in this large percentage, it becomes necessary to review the electronic payment policies and its application mechanisms. The
expansion of this system must be accompanied by motivational and encouraging measures that enhance the confidence of individuals and companies in banking transactions,
instead of being a technical transformation that does not achieve the required impact on the financial sector.
https://www.alsumaria.tv/news/economy/518581/بالأرقام-القطاع-المصرفي-خلال-2024-يشهد-انخفاضًا-في-إجمالي-الودائع
Digital Currency .. And An Advanced Financial Future
Economic 2025/03/05 D. Nabil Al -ordinary
In line with the framework of rapid global developments in financial and technological systems, the
Central Bank of Iraq, in the context of keeping pace with development, is heading towards launching an alternative digital currency for paper cash.
This step, which is not just a transformation in the method of financial transactions,
is a fundamental shift in seeing the Iraqi financial system.
Digital currencies are a new innovation that the world has witnessed, and
it reflects the rapid shift towards the digital age. The
digital currency allows the possibility of
making transactions faster and more safely compared to paper criticism, through the use of this currency, as well as
reducing the costs of transactions, which contributes to
enhancing economic efficiency.
As for the potential benefits of the digital currency in Iraq, they are summarized in
improving the efficiency of the financial system, and then will help
accelerate transactions and
reduce the time required to accomplish them,
which reflects positively on the movement of internal and external trade.
It is also an effective means of
enhancing transparency and
fighting corruption, and that its use and intended digital currencies may contribute to
reducing informal monetary transactions, which
reduces the chances of financial corruption as well as job evasion.
Perhaps the most prominent advantage of this type of currency is that
it will contribute to
increasing the amount of financial inclusion: the prospects for
access to financial services for new groups of society may open, especially for those who do not deal with banks directly. In my estimation, the
digital currency can contribute to encouraging innovation in the financial market, giving many startups to provide new services that depend on financial technology. Although
this type of currency has these advantages and despite the great benefits,
it is not without challenges, and
it must be paid attention to, foremost of which is concerns related to cybersecurity and data protection, and
citizens must be educated about how to use this currency and
this requires a clear legal and organizational framework that guarantees the protection of the rights of users. The
launch of the digital currency in Iraq represents a new and important stage in the development of the financial system,
this initiative
reflects Iraq’s commitment to move forward towards an advanced technological age, and
will have positive effects in the economy and society, however, the
success of this step depends on
addressing the challenges associated with it, which we pointed to some of them in the context of this article, and the
need to provide adequate support to achieve its goals. https://alsabaah.iq/111170-.html
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