Baghdad: The Association of Iraqi Private Banks has hailed the Central Bank’s recent discussions with the US Treasury as a pivotal development in reforming Iraq’s banking sector.

According to National Iraqi News Agency, the association praised the outcomes of the high-level talks led by the Governor of the Central Bank of Iraq, Nizar Nasser, with US Treasury officials. These discussions aligned with the initiatives taken during Prime Minister Ali Faleh al-Zaidi’s official visit to the United States, marking a significant milestone in the government’s efforts to overhaul the banking sector.

In a statement, the association expressed approval of the strategic decision to reinstate seven Iraqi banks to correspondent banking channels in foreign currencies, excluding the US dollar. This move is seen as a crucial step in the success of the initial phase of Iraq’s banking sector reform and relicensing program, steered by the Central Bank of Iraq.

The association highlighted the positive implications of this development, noting its potential to stabilize the Iraqi dinar and bolster the strength and soundness of Iraqi banks. This, in turn, is expected to enhance the banks’ ability to support foreign trade and finance local market needs effectively.

Furthermore, the association pointed out that banks still under restrictions would have the opportunity to operate in other currencies once they meet the requirements of the first phase. These banks are encouraged to intensify their efforts to comply with the Central Bank’s standards, including anti-money laundering and counter-terrorism financing procedures.

The association reaffirmed its commitment to supporting the Central Bank of Iraq’s comprehensive strategy aimed at modernizing the banking sector. This strategy seeks to enhance the sector’s resilience and competitiveness, ensuring its integration into the global financial system and facilitating the Iraqi economy’s engagement with international financial institutions.