Trade Bank of Iraq (TBI) has put on hold plans to buy a commercial bank in Turkey because of the plunge in the Turkish lira, its chairman told Reuters.
The bank, owned by the Iraqi government and with assets of around $20 billion, is responsible for helping finance around 80 per cent of the trade finance business in Iraq. It is keen to expand its footprint in Turkey, Iraq's largest trading partner, Faisal Al Haimus said.
Turkey's currency has lost more than 40 per cent against the US dollar this year, fuelled by investors' anxiety over President Recep Erdogan's economic policies and, more recently, a diplomatic spat between Turkey and the United States. The lira rebounded on Wednesday after the central bank squeezed lira liquidity in the market, effectively pushing up rates and supporting the currency.
"Turkey is a very important market for Iraq and we want to study the situation before entering Turkey," he said. "The Turkish lira is not stable and we are watching to see if it stabilises before entering."
Mr Al Haimus said TBI's preferred entrance to Turkey was through an acquisition and TBI had been approached about buying a Turkish commercial bank. He did not name the bank. TBI's board was assessing the potential purchase, he said without elaborating.
"A commercial bank would act as Iraq's trading leg in Turkey and facilitate exports from Iraq to Turkey," he said, adding that trade between the two countries had reached around $6bn so far this year.
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TBI also plans to open a branch in Saudi Arabia after last month receiving approval to do this from the country's Council of Ministers.
"At this point in time trade [between Iraq and Saudi Arabia] is around $1bn and the aim is to double or triple that in two or three years," Mr Al Haimus said, adding that food and agricultural products and petrochemicals were among the areas primed for growth.
The bank also has a representative office in Abu Dhabi, which it plans to upgrade to an asset management business to provide investment opportunities in Iraq for high-net-worth individuals in the Arabian Gulf, Mr Al Haimus said.