A source at the Iraqi Central Bank informed that CBI has decided to increase the capital of foreign banks in two phases at 50 million U.S dollars.
The source said in a press interview that the Central Bank of Iraq has decided to increase the capital amount of foreign banks to 50 million U.S dollars in two supposed phases. The source also pointed out that 25 million U.S dollars will be increased in the first phase until 31st December in the current year 2016. The source further added that the capital amount will be increased at 50 million U.S dollars in the second phase including the current year and at the end of December 2017. Point to be noted that the suggested raising amount was 70 million U.S dollars instead of 50 million U.S dollars, but the decision was changed after the meeting between the Governor of Iraqi Central Bank Ali Mohsin and the delegation of Lebanese banks.
It is important that Lebanese delegation had visited Iraq several times during the last three months. The source said that increase in the capital will allow permission to open up to 15 branches in Iraq. The source explained that the initial capital amount was 7 million U.S dollars to open a foreign bank in Iraq. But, the Central Bank of Iraq decided that increase in the capital of foreign banks in order to work in the Iraqi market and it is essential in making advancement in the Iraqi banking sector. Most of the financial experts believe that it would increase fluidity in the Iraqi markets. It would also reflect a positive impact on Iraqi currency. Some dinar gurus predicted that it would support Iraqi Dinar Revaluation due to an increase in the currency trading. It would also support in maintaining the Iraqi dinar exchange rate against the U.S dollar.