PM Al-Zaidi welcomes U.S. Treasury pact to rehabilitate 7 Iraqi banks

Baghdad (IraqiNews.com) — In a major development for Iraq’s financial sector, Prime Minister Ali Falih al-Zaidi officially welcomed a new understanding reached between the Central Bank of Iraq (CBI) and the U.S. Department of the Treasury. The agreement marks a critical milestone in the government’s ongoing campaign to overhaul the domestic banking sector and integrate it into the global financial system. The strategic framework explicitly paves the way for seven restricted Iraqi banks to rejoin international correspondent banking channels. Under the agreement, these seven financial institutions will initially be permitted to resume international transactions in foreign currencies other than the U.S. dollar. This phase serves as a structural stepping stone to help the banks fulfill rigorous international governance standards, ultimately preparing them to fully restore their eligibility to transact directly in U.S. dollars. Prime Minister al-Zaidi emphasized that this breakthrough directly validates the success of the comprehensive financial and administrative reforms championed by his administration. By meeting international compliance and corporate governance requirements, the rehabilitation of these banks is expected to significantly boost confidence in the Iraqi banking sector, reduce parallel market volatility, and open broader horizons for foreign investment and national economic growth. The Prime Minister reaffirmed that the government will continue to strongly back these structural fiscal reforms, entrenching principles of transparency and governance to elevate Iraq’s economic standing both regionally and internationally. Core Pillars of the CBI–U.S. Treasury Accord Global Re-integration: A formal roadmap to reintegrate sidelined domestic banks back into international correspondent banking networks. Targeted Rehabilitation: The immediate qualification of 7 Iraqi banks to conduct global transfers in alternative foreign currencies. The Dollar Pathway: Establishing a compliance-driven bridge for these institutions to regain full authorization for U.S. dollar transactions upon meeting strict anti-money laundering (AML) and counter-terrorism financing (CTF) standards. Economic Impact: Enhancing liquidity, stabilizing the local financial sector, and creating a secure, verified environment for international corporations entering the Iraqi market.