\n 2026-06-01T23:21:00+00:00<\/p>\n
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Shafaq News- Baghdad<\/p>\n
Exchange and money transfer offices have expanded
\nsignificantly across Iraq in recent years, reflecting continued reliance by
\ncitizens and traders on non-bank financial services despite gradual
\nimprovements in financial inclusion.<\/p>\n
According to Prime Minister\u2019s financial adviser Mudher
\nMohammed Saleh, about 87% of Iraq\u2019s money supply, roughly 95 trillion Iraqi
\ndinars (about $72.5 billion) out of a total 109 trillion dinars (around $83.2
\nbillion), remains outside the banking system. \u201cThe trend limits banks\u2019 ability to channel
\nfunds into lending and investment and highlights the persistence of cash
\nhoarding and weak integration into the formal financial sector.\u201d<\/p>\n
Although financial inclusion indicators have improved, a
\nlarge segment of Iraq\u2019s population remains outside the banking system or uses
\nit only occasionally. The Central Bank of Iraq said financial inclusion
\nsurpassed 40% in 2025, up from around 20% in previous years. The figure
\nincludes bank accounts, electronic wallets, and digital payment tools rather
\nthan traditional bank accounts alone.<\/p>\n
Economic estimates nevertheless suggest that many adults
\neither do not have active bank accounts or rarely use them, underscoring the
\ncontinued dominance of cash transactions in the local economy.<\/p>\n
Iraq\u2019s heavy dependence on imports has also contributed to
\ndemand for exchange offices. Traders often turn to these businesses for foreign
\ncurrency and international transfers because of customs-related complications
\nand difficulties some importers face in accessing US dollars through the
\nCentral Bank\u2019s official channels.<\/p>\n
This dynamic has increased demand for dollars in the local
\nmarket, particularly among small and medium-sized traders who struggle to
\naccess formal transfer mechanisms. Regulatory estimates indicate that Iraq has
\nthousands of exchange offices and currency companies nationwide, compared with
\nroughly 900 branches operated by public and private banks.<\/p>\n
The exchange sector plays an important role in maintaining
\nliquidity flows<\/a>, but the gap between the official dollar exchange rate and the
\nparallel market rate, ranging from 15% to 20% during periods of market stress, has
\nencouraged transactions outside the banking system and fueled currency
\nspeculation. The sector is also estimated to support more than 50,000 direct
\nand indirect jobs in money transfers and liquidity management.<\/p>\n