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Iraqi Government Intensifies Efforts to Reform Banking Sector, Address Exchange Rates

Iraqi Prime Minister Mohammed Shiaa Al-Sudani directs the directors of government banks to submit a plan within one month to enhance their operations (Iraqi National News Agency)
Iraqi Prime Minister Mohammed Shiaa Al-Sudani directs the directors of government banks to submit a plan within one month to enhance their operations (Iraqi National News Agency)
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Iraqi Government Intensifies Efforts to Reform Banking Sector, Address Exchange Rates

Iraqi Prime Minister Mohammed Shiaa Al-Sudani directs the directors of government banks to submit a plan within one month to enhance their operations (Iraqi National News Agency)
Iraqi Prime Minister Mohammed Shiaa Al-Sudani directs the directors of government banks to submit a plan within one month to enhance their operations (Iraqi National News Agency)

Iraqi Prime Minister Mohammed Shia al-Sudani has instructed the directors of government banks to present a development plan within one month.

In light of this news, government sources revealed a set of measures taken by the Iraqi government to address disruptions and the continuous decline in the exchange rates of the Iraqi dinar against foreign currencies, especially the US dollar.

Al-Sudani chaired on Tuesday a meeting, which brought together the Minister of Finance, the Central Bank Governor, and directors of government banks, to discuss the mechanisms and measures implemented in the administrative and banking reforms initiated by the government.

These reforms are among the top priorities of the comprehensive economic reform in the country, according to a statement from al-Sudani’s media office.

The statement revealed that the development plan ordered by al-Sudani should include optimal use of financial, human, and technological resources.

It also marks a significant shift from paper-based to electronic work, and from manual to online transactions for all banking activities.

The plan also involves developing work mechanisms, including control and regulatory tools.

Al-Sudani confirmed that the bank directors would be evaluated based on their application of the plan and the level of achievement.

This performance-based assessment will ensure that those at the helm of the banking sector are held accountable for its advancement.

The meeting, as per the statement, also discussed the implementation of the comprehensive banking system through the use of advanced e-programs and modern technology in all banking transactions.

The premier directed the banking administrations to draw upon international expertise by contracting specialized consultants in banking and financial work.

This move, which includes the development plan presented by Ernst & Young for the restructuring of Rafidain Bank, indicates a commitment to adopting global best practices and standards in the banking sector in an effort to scale up growth and development.

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Moody's Upgrades Saudi Arabia's Credit Rating

Moody's indicated that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification. Reuters
Moody's indicated that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification. Reuters
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Moody's Upgrades Saudi Arabia's Credit Rating

Moody's indicated that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification. Reuters
Moody's indicated that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification. Reuters

The credit rating agency “Moody’s Ratings” upgraded Saudi Arabia’s credit rating to “Aa3” in local and foreign currency, with a “stable” outlook.
The agency indicated in its report that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification and the robust growth of its non-oil sector. Over time, the advancements are expected to reduce Saudi Arabia’s exposure to oil market developments and long-term carbon transition on its economy and public finances.
The agency commended the Kingdom's financial planning within the fiscal space, emphasizing its commitment to prioritizing expenditure and enhancing the spending efficiency. Additionally, the government’s ongoing efforts to utilize available fiscal resources to diversify the economic base through transformative spending were highlighted as instrumental in supporting the sustainable development of the Kingdom's non-oil economy and maintaining a strong fiscal position.
In its report, the agency noted that the planning and commitment underpin its projection of a relatively stable fiscal deficit, which could range between 2%-3% of gross domestic product (GDP).
Moody's expected that the non-oil private-sector GDP of Saudi Arabia will expand by 4-5% in the coming years, positioning it among the highest in the Gulf Cooperation Council (GCC) region, an indication of continued progress in the diversification efforts reducing the Kingdom’s exposure to oil market developments.
In recent years, the Kingdom achieved multiple credit rating upgrades from global rating agencies. These advancements reflect the Kingdom's ongoing efforts toward economic transformation, supported by structural reforms and the adoption of fiscal policies that promote financial sustainability, enhance financial planning efficiency, and reinforce the Kingdom's strong and resilient fiscal position.