ISIS makes millions playing foreign markets with stolen cash, analysts say

THE source of the Islamic State terror group’s enormous cash reserves has been revealed, and looting is only the beginning.

How Islamic State makes millions

THE Islamic State terror group is raking in up to $20 million a month by playing foreign currency markets under the noses of unsuspecting officials — all with cash that was looted from banks, financial analysts told British politicians Wednesday.

The crafty terrorists are making huge returns on currency speculation, which involves buying and selling currencies to make profits from favourable exchange rates, The Telegraph reports.

The profits are then wired back through unsuspecting financial officials in Iraq and Jordan, the British parliamentary committee was told.

In 2014, US officials estimated ISIL raked in $1.36 million ($AU1 million) each day from oil smuggling alone, and another $27 million ($US20 million) that year from kidnappings and ransom payments.

During a 2014 takeover of Mosul, ISIL looted about $582.6 million ($US429 million) from the city’s central bank, according to The Telegraph.

“The cash that Isil has looted, along with siphoned-off pension payments, is routed into Jordanian banks and brought back into the system via Baghdad,” said John Baron, the Foreign Affairs subcommittee’s chair.

“That allows the system to be exploited by ISIL, in that they take a turn (profit) on the foreign currency actions and siphon that cash back.”

The money gets into the terror group’s hands through informal “Hawala” transfers, an unregulated system where cash payments are made between agents in one country after an equal amount is presented as collateral in another, the Telegraph reports.