Central Bank of Iraq sets out banking reform roadmap with Oliver Wyman and phased restoration of foreign currency activity

The Central Bank of Iraq presented its banking reform agenda and future structural plans, framing reconstruction of the banking sector as its main priority and linking the programme to an engagement with Oliver Wyman to deliver comprehensive reforms and align banking institutions with international standards. The Governor said the Oliver Wyman contract followed a ban on a number of Iraqi banks dealing in USD, and noted that assurances had been received that these banks could return to normal operations once required remediation stages are completed. All Iraqi banks have signed a reform document, and banks that comply will be granted the ability to transact in other currencies through gradual steps, with international bodies closely monitoring progress. On digitisation, the digital Iraqi dinar project is under implementation but will require time and integrated infrastructure before an optimal launch. The Governor also reiterated that monetary policy aims to maintain low inflation through stability of the official exchange rate, cautioning that reducing the IQD exchange rate would undermine price stability and confidence in the national currency, and arguing that structural fiscal deficits should be addressed through broader structural reforms rather than exchange rate adjustments.