Iraq public salary payments delayed by liquidity crunch, source says

BAGHDAD, Iraq — A source familiar with the matter has said the payment of public-sector salaries in Iraq may be pushed back to the end of the current month or the start of next month, as financing for ministries and state institutions had not been launched even though the month had ended. The source told a news agency that disbursements are processed separately for each ministry and handled in sequence, adding several days to the process. Some state-owned banks have been facing liquidity shortages as their cash holdings declined, limiting their ability to finance public institutions and take on domestic borrowing, according to the source. The absence of lending plans at a number of these banks and weak management have also disrupted services, reducing deposit and withdrawal activity, the source said. The official stressed that resolving the issue requires strengthening the cash positions of state banks, reviving lending and credit operations, and drawing up plans to ensure salaries are paid on time. No further details were immediately available on the scope of the delay or which ministries were affected.