IMF Offers Iraq Financial Support As US Sanctions On Iraqi Bank Trigger Depositor Crisis

ERBIL (Kurdistan 24) - IMF Managing Director Kristalina Georgieva announced on Saturday that the International Monetary Fund intends to provide strong financial and policy support to Iraq through a lending programme, as Kurdistan 24 exclusively revealed that US sanctions imposed on Iraq's International Development Bank have placed approximately 1.5 trillion dinars in citizen and trader deposits at risk, with a major depositor crisis expected to begin Sunday.

Georgieva made the announcement at a press conference following the decision to provide the support at the annual joint meetings of the IMF and World Bank Group in Bangkok, Thailand. "The fund intends to provide strong financial and policy support to Iraq through a necessary lending programme," she said.

Iraq's Finance Minister In Bangkok

Iraqi Finance Minister Falah Sari led a delegation that included Central Bank of Iraq Governor Nizar Hussein to the annual IMF and World Bank Group meetings in Bangkok. The purpose of the participation was to strengthen coordination with international financial institutions and support the trajectory of economic and financial reform in Iraq. On the sidelines of the meetings, the Finance Minister held a series of meetings with IMF officials including Mohammed Muait, the fund's Executive Director for Iraq and the region, and Ali Hussaini, the incoming Executive Director, during which Iraq's economic and financial situation was discussed and views exchanged on the progress of reforms and ways to strengthen bilateral cooperation.

The International Development Bank Crisis

While Iraq's Finance Minister was meeting IMF officials in Bangkok, a separate and acute financial crisis was developing at home. Kurdistan 24's economic desk exclusively confirmed that the total deposits in Iraq's International Development Bank reached 2.6 trillion dinars as of the end of March 2026. A source inside the bank told Kurdistan 24 that citizen and trader savings and deposits are estimated at approximately 1.5 trillion dinars.

Mass withdrawals are expected to begin Sunday, October 18, 2026, as depositors rush to recover their funds, creating a major crisis similar to the one that recently struck Islamic Taif Bank in Iraq over the past few weeks.

The US Treasury imposed sanctions on the International Development Bank in recent days, stating that the bank facilitated Iran's access to US dollars and accusing it of having connections to Iran-aligned armed groups operating in Iraq. The bank rejected all the accusations in a statement, saying it continuously complies with the regulations of the Iraqi Central Bank and with international laws.

As a result of the sanctions, all of the bank's assets and funds abroad are frozen and placed under American control, severely reducing the bank's capacity to return depositors' money. The bank provides several services to citizens and companies and participates in the Tatwir project for the electronic salary disbursement of Iraqi government employees, meaning that government workers who receive their salaries through the bank now face serious difficulties.

The Central Bank of Iraq, in coordination with the United States, has previously imposed sanctions on more than 14 other Iraqi banks with the aim of preventing the transfer of dollars to sanctioned parties. The International Development Bank is the latest in a series of Iraqi financial institutions to face American enforcement action under the broader Operation Economic Outcast framework targeting institutions that facilitate Iranian access to the US dollar system.