Increase in Large Denomination Money Supply Signals Negative Economic Indicators in the Iraqi Market

Recent economic analyses based on official financial data have revealed a significant increase in the volume of the money supply over the past four years, registering a growth of over 38 percent. The data highlighted that this increase was primarily concentrated in large currency denominations, subsequently raising the per capita share of issued banknotes and their total value. Conversely, medium and small denominations experienced a variance between decline and slight growth. This disproportionate growth serves as a negative indicator, reflecting a trend of hoarding funds outside the banking system, which suggests a slowdown in real economic activity and daily trade. These findings call for a comprehensive review of monetary policies to encourage the integration of cash into the official economic and banking cycle.