BELGRADE: Serbia's central bank bought an unspecified amount of euros on the local interbank market on Monday to stem gains of the dinar against …

The Serbian central bank kept its benchmark rate unchanged as expected at 3 percent as the dinar remains strong, growth is stable and inflation …

The Iraq Britain Business Council (IBBC) held Iraq’s first International Tech Conference in Baghdad at the Babylon Rotana Baghdad Hotel on 30 April, hosting government ministers, private industry, entrepreneurs, investors, and representatives from the leading UK and Iraq Tech companies.

The purpose of the Conference was to drive confidence, investment and awareness of the power of the new tech economy and how it can benefit Iraq.

The event – Iraq Tech Conference – was led by Ashley Goodall, IBBC’s Marketing Adviser. Keynote addresses were given by H.E. Dr Sami Al Araji, Chairman of the National Investment Commission and Mr Ashraf Al Dahan, Chairman of the CMC Board of Commissioners.

The agenda for the day comprised four panels: Consumer Tech panel, E-Government Panel, Business Fintech and a Consumer Fintech Panel.

Fintech in particular is making strides forward with the blessing of the Central Bank of Iraq (CBI), as Mr Waleed Eidi, Advisor to the Governor of the Central Bank, explained and encouraged the adoption of steps to include Women, those excluded from banking and the digital economy and young people.

The CBI is being ambitious in encouraging banks and financial institutions to modernise and offer new ways to distribute the flow of funds for investment and those who need it. This will also have a big impact on the overall economy and growth.

Ahmed Elkady of EY echoed the importance of Fintech as he led the Consumer FinTech Panel discussion onto technical infrastructure and what needs to happen to grow the opportunity for financial transactions. He was ably supported by National Bank of Iraq’s Eyad Mahmoud and Roger Abboud of Arab Payment Systems – who are modernising banking transactions – and Douglas Way of Almaseer Insurance – who are enabling business to reduce risks and transact insurance products rapidly and scalably.

The conference also embodied eight presentations:

  • “How technology is driving the business and consumer world in Iraq and Internationally” by Zain Iraq;
  • Online Literacy” by Dr Victoria Lindsay, Country Director – Iraq for the British Council;
  • Automating & digitising BP and Iraq” by Zaid Elyaseri, Country Manager-Iraq for BP;
  • Restrata Product Announcement” by Botan Osman, CEO for Restrata;
  • “Five One Labs” by Patricia Letayf, Co-Founder and Director of Operations for Five One Labs;
  • Blockchain and AI – The Future Talk” by Muhana Almrahleh, Director – Head of Information Technology Advisory for KPMG (Jordan); and,
  • How Re:Coded are Training the Next Generation of Technology Leaders in Iraq” by Zahra Shah, Country Manager-Iraq for Re:Coded.

Attendees were able to enjoy one-to-one meetings and conversations.

As part of the Tech Conference on April 30, IBBC hosted an Evening Reception for Entrepreneurs and Start-ups at The Station, Baghdad, the evening prior on 29 April. The evening, planned in partnership with Iraq Tech Ventures and Arabnet, showcased the growing tech community in the country and gave an outstanding platform for some of the leading start-ups and entrepreneurs in a more informal setting.

The participating start-ups pitched their business in 5 minutes to a panel of seven judges composed by: Mohammed Khudairi, Managing Partner of Khudairi Group and Founder of Iraq Tech Ventures; Hal Miran, CEO of MSelect and Founder of Bite.Tech and TechHub; Richard Greer, Venture Capital Investor in Asia, Middle East, & UK and Philanthropist in Northern Iraq; Zahra Shah, Iraq Country Manager for Re:Coded; Ali Ismail, Co-Founder of Fikraspace and Co-Founder & Partner of Solo Creative Studio; Patricia Letayf, Co-Founder and Director of Operations for Five One Labs and Maryam Allami, Advisor for Deutsche Gesellschaft fuer Internationale Zusammenarbeit (GIZ) GmbH.

Through this first international Tech Conference in Iraq, IBBC aims to provide a foundation, a platform and focus for Tech in Iraq and give inspiration and confidence to those building a modern Iraq.

For more information on the Iraq Britain Business Council, visit our website at

To contact IBBC for Interviews, registration and sponsorship please contact

(Source: IBBC)

IMF Staff Completes 2019 Article IV Mission on Iraq

An International Monetary Fund (IMF) team led by Gavin Gray visited Amman from April 26 to May 2, to hold discussions with the Iraqi authorities in the context of the 2019 Article IV Consultation.

At the end of the visit, Mr. Gray made the following statement:

“The end of the war with ISIS and a rebound in oil prices provide an opportunity to rebuild the country and address long-standing socio-economic needs. However, the challenges to achieving these objectives are formidable. The economic recovery has been sluggish, post-war reconstruction is limited, and large current spending increases risk placing the public finances and central bank reserves on an unsustainable path. Moreover, combatting corruption is critical to promote the effectiveness of public institutions and to support private-sector investment and job creation.

“Near-term vulnerabilities subsided in 2018, with the budget in surplus and a build-up in central bank reserves. Non-oil growth is expected to increase to 5.4 percent in 2019 on the back of higher investment spending. However, fiscal deficits are projected to rise over the medium term, requiring financing that may crowd out the private sector or erode central bank reserves. In these circumstances, it would be hard to sustain capital spending, and growth would slow markedly.

“Policy changes and structural reforms—including to improve governance—are therefore essential to maintain medium-term sustainability and lay the foundations for inclusive growth.

“Fiscal policy should aim to scale up public investment gradually while building fiscal buffers. To make space for this, staff recommends budgetary savings of around 9 percent of GDP over the medium term through tight control of current spending, particularly public-sector wages, and phased measures to boost non-oil revenue. Setting ceilings on current expenditure in the 2020 budget onwards would strengthen the fiscal framework’s capacity to support higher capital spending and to adapt to oil price shocks. Key reforms should include:

  • Containing public-sector wages. Spending pressures could be dampened in the short run through compensation measures such as capping allowances, bonuses and other non‑base wage payments, and by not fully replacing retirees. Structural measures will be required over the medium term, based on a functional workforce review as well as deeper civil service reform once new HR management and information systems are in place.
  • Electricity reforms are key to addressing the weak quality of service and reducing the high budgetary costs, due to modest tariff rates, chronic non-payment of electricity bills, poor maintenance and over-reliance on expensive generation sources, coupled with losses throughout the generation, transmission, and distribution process. It would be important to ensure that the poor and most vulnerable are protected throughout this reform.
  • Bolstering public financial management. Enhancing the legal framework and improving commitment and other control systems are key to minimizing misuse of public resources and restoring budgetary discipline.

“In the financial sector, a robust plan to restructure the large public banks coupled with enhanced supervision is essential to secure financial stability and will help promote financial development and inclusion. Strengthening anti-money laundering and countering financing terrorism (AML/CFT) controls and oversight will help prevent Iraq’s financial sector from being misused for the laundering of criminal proceeds and terrorist financing.

“Addressing governance weaknesses and corruption vulnerabilities is critical to achieving the described policy objectives. As a first step, the authorities need to develop a comprehensive understanding of the corruption risks present in Iraq and then implement policies to tackle these risks in a coherent and coordinated manner. The legislative framework needs to be strengthened to effectively prevent officials from abusing their position or misusing state resources. To this end, laws strengthening the asset declaration regime and criminalizing illicit gains should be rapidly adopted. Furthermore, the independence and integrity of bodies involved in combatting corruption should be ensured and the AML/CFT regime should be mobilized to support anti-corruption efforts.

The team will prepare a report that, subject to management approval, is tentatively scheduled to be considered by the IMF’s Executive Board in July 2019.

“The IMF team would like to thank the authorities for the candid and constructive discussions during this visit.”

(Source: IMF)

By Ahmed Tabaqchali, CIO of Asia Frontier Capital (AFC) Iraq Fund.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

The market, as measured by the Rabee Securities RSISUSD Index, increased by +2.5% in April, bringing the YTD decline to -11.8%. Average daily turnover, excluding block transactions, declined -32% from the prior month, and at 60% of the average turnover for the last 12 months, is the second lowest for the period. Foreign selling, the cause of the last few weeks’ declines, seems to have exhausted itself (chart below) and in the process prices lifted higher.

(Source: Iraq Stock Exchange (ISX), Asia Frontier Capital)

The early signs of the return of the liquidity to the real economy, reported here over the last few months, are becoming more convincing as the healing effects of increasing oil revenues are continuing to filter down into the broader economy. The continued recovery in broad money, i.e. M2 as a proxy for economic activity, is adding to this conviction due to its sensitivity to oil revenues (chart below)- given the central role of government’s spending on non-oil economic activity.

(Source: Central Bank of Iraq, Iraq’s Ministry of Oil, Asia Frontier Capital)

(Note: M2 as of Jan with AFC est.’s for Feb & Mar; Oil revenues as of Mar with AFC est.’s for Apr)

Driving this recovery in M2 has been the growth of monetary base, or M0, which in turn has been based on the growth in one its two main components “Iraqi Dinar (IQD) current account (C/A) component of banks’ reserves with the Central Bank of Iraq (CBI)” as can be seen in the chart below. The recovery of this component of M0 is a direct result of the growth of customer deposits (consumers, businesses and government) held with banks.

(Source: Central Bank of Iraq, Asia Frontier Capital)

(Note: M0 as of Mar, IQD C/A component of bank’s reserves as of late Apr)

The estimated increase in M2 (prior chart) for March is based on recent M2/M0 multiplier figures and actual increases in M0 for the month. Persistent growth as of late April in IQD Current Account component of banks’ reserves with the CBI (a function of sustained growth in customer deposits with banks) is an early indicator for a continued recovery of M0 and hence in M2 in April (above chart). However, more data over the next few months is needed to establish if this trend is sustainable.

Supporting this growth in customers deposits are the 2018 results for the Bank of Baghdad (BBOB) which showed the first year-over-year growth in customer deposits following their peak in 2014. While BBOB’s year-over-year deposit growth at +5.2% is a far cry from the +25.8% growth reported by the Bank of Mansour (BMN), never-the-less, it was a function of corporate customers deposit growth. Moreover, BBOB’s provision expenses decreased contributing to an overall decline in total provisions (ex-income tax) of -2.3%. Combined they indicates that the macro forces which contributed to BMNS’s recovery, as discussed last month, are spreading to the sector as a whole and should therefore create the conditions for a recovery in the sector.

However, BBOB doesn’t enjoy the same financial strength as BMNS, which is a function of BBOB’s heady expansion during the boom years up to 2014, which among other things resulted in a large loan book relative to other banks, and hence exposure to riskier loans. Growth for BBOB took a back seat while management’s focus over the last few years was on addressing the company specific issues and structural weaknesses that were exposed by the pains of 2014-2017, including the crush in FX margins witnessed in 2018. This can be seen through the other metrics for BBOB in that while its assets and equity increased by +2.1% and +0.2% respectively in 2018 over 2017, its loan book and interest income declined by -4.7% and -38.0% respectively. The decline in its interest income was made worse by the decline in interest earned from government bonds and deposits with the CBI. BBOB’s challenges during the years of contraction were explored here in August.

Finally, mobile operator AsiaCell (TASC) leverage to the economic recovery was confirmed by its continued confidence in its future outlook with a distribution of a 12% dividend. This comes on the back of last year’s 12% dividend and the prior year’s 14% dividend.

The continued signs of economic recovery, mixed as they are in as this early stage, underscore the opportunity to acquire attractive assets that have yet to discount a sustainable economic recovery. On the other hand, the market’s recovery in April on low turnover suggest that a long consolidation and a significant recovery in turnover are needed before it can embark on the next move.

Please click here to download Ahmed Tabaqchali’s full report in pdf format.

Mr Tabaqchali (@AMTabaqchali) is the CIO of the AFC Iraq Fund, and is an experienced capital markets professional with over 25 years’ experience in US and MENA markets. He is a non-resident Fellow at the Institute of Regional and International Studies (IRIS) at the American University of Iraq-Sulaimani (AUIS), and an Adjunct Assistant Professor at AUIS. He is a board member of the Credit Bank of Iraq.

His comments, opinions and analyses are personal views and are intended to be for informational purposes and general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any fund or security or to adopt any investment strategy. It does not constitute legal or tax or investment advice. The information provided in this material is compiled from sources that are believed to be reliable, but no guarantee is made of its correctness, is rendered as at publication date and may change without notice and it is not intended as a complete analysis of every material fact regarding Iraq, the region, market or investment.