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IMF says may agree on $800 mln loan to Iraq in weeks
May 5, 2015
BAGHDAD // Iraq has requested financial assistance from the International Monetary Fund and agreement may be reached within weeks on a loan of about US$800 million (Dh2.9bn), a senior IMF official said.
It comes amid continued violence in the country as Iraqi forces seek to purge the ISIL militant group which has taken over large parts of Iraq and Syria.
On Tuesday, a car bomb blast near the Baghdad headquarters of a Shiite militia fighting ISIL in Baghdad killed at least four civilians and injured at least 13 people.
Iraqi finances have been hit hard by the plunge of oil prices since last year as well as by the ISIL insurgency.
The government has projected a budget deficit of about $25 billion this year, in a budget of some $100 billion.
Aid from the IMF could ease the pressure and by increasing investor confidence, help Iraq raise money from other sources. Baghdad has said it plans to issue $5 billion of debt in its first international bond sale for nine years.
The aid would probably come in the form of a Rapid Financing Instrument (RFI), said Masood Ahmed, director of the IMF’s Middle East and Central Asia department said.
The RFI is a facility created by the IMF to provide quick financial assistance and economic policy advice to member countries with urgent balance of payments needs.
It could pave the way in the longer term for a larger IMF lending programme for Iraq, if that were needed, Mr Ahmed said. Such a programme could involve more extensive economic policy commitments by Baghdad.
Mr Ahmed noted that Iraq had started running down its international reserves and said its economy was likely to grow only marginally this year, after shrinking 2.4 per cent in 2014.
“The finance minister and the prime minister are both very clear that they recognise there is a problem and they are committed to finding a way to address it, within the constraints that they face,” he said.
The government has introduced or is planning measures including a local currency bond issue to banks, taxes on some consumer goods, and public wage cuts.
Tuesday’s explosion occurred near the headquarters of Kataeb Imam Ali in the Karrada area of central Baghdad. It was the second attack in Karrada since Saturday when 15 people were killed in a car bombing outside a popular restaurant. No one claimed responsibility for the attack, although Saturday’s attack was claimed by the ISIL group.
The bomb went off in front of the Royal Hotel, leaving the headquarters untouched but damaging cars and the hotel lobby, a witness said.
Meanwhile, reinforcements were being rushed to the key Beiji refinery in northern Iraq amid heavy fighting with ISIL militants who have been trying to capture the facility for months, Iraqi officials said on Tuesday.
But Brig Gen Saad Maan, a spokesman for the interior ministry, denied during his appearance on state television that ISIL had taken over major parts of the refinery, as some Iraqi media reported.
Aside from its commercial significance as the country’s largest refinery, Beiji is on the road to Mosul – Iraq’s second largest city and the main centre of ISIL’s power in Iraq. If Iraqi forces hope to eventually take back Mosul, they have to secure Beiji – the scene of stubborn fighting for months.
Ammar Hikmat, the deputy governor for Salahuddin province where the refinery is located, said that the troops holding the refinery have been battered since Monday by a wave of suicide bombings carried out by armoured vehicles packed with explosives.
The government has several times said the refinery was under control, but militants have repeatedly counterattacked.
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May 5, 2015
BAGHDAD // Iraq has requested financial assistance from the International Monetary Fund and agreement may be reached within weeks on a loan of about US$800 million (Dh2.9bn), a senior IMF official said.
It comes amid continued violence in the country as Iraqi forces seek to purge the ISIL militant group which has taken over large parts of Iraq and Syria.
On Tuesday, a car bomb blast near the Baghdad headquarters of a Shiite militia fighting ISIL in Baghdad killed at least four civilians and injured at least 13 people.
Iraqi finances have been hit hard by the plunge of oil prices since last year as well as by the ISIL insurgency.
The government has projected a budget deficit of about $25 billion this year, in a budget of some $100 billion.
Aid from the IMF could ease the pressure and by increasing investor confidence, help Iraq raise money from other sources. Baghdad has said it plans to issue $5 billion of debt in its first international bond sale for nine years.
The aid would probably come in the form of a Rapid Financing Instrument (RFI), said Masood Ahmed, director of the IMF’s Middle East and Central Asia department said.
The RFI is a facility created by the IMF to provide quick financial assistance and economic policy advice to member countries with urgent balance of payments needs.
It could pave the way in the longer term for a larger IMF lending programme for Iraq, if that were needed, Mr Ahmed said. Such a programme could involve more extensive economic policy commitments by Baghdad.
Mr Ahmed noted that Iraq had started running down its international reserves and said its economy was likely to grow only marginally this year, after shrinking 2.4 per cent in 2014.
“The finance minister and the prime minister are both very clear that they recognise there is a problem and they are committed to finding a way to address it, within the constraints that they face,” he said.
The government has introduced or is planning measures including a local currency bond issue to banks, taxes on some consumer goods, and public wage cuts.
Tuesday’s explosion occurred near the headquarters of Kataeb Imam Ali in the Karrada area of central Baghdad. It was the second attack in Karrada since Saturday when 15 people were killed in a car bombing outside a popular restaurant. No one claimed responsibility for the attack, although Saturday’s attack was claimed by the ISIL group.
The bomb went off in front of the Royal Hotel, leaving the headquarters untouched but damaging cars and the hotel lobby, a witness said.
Meanwhile, reinforcements were being rushed to the key Beiji refinery in northern Iraq amid heavy fighting with ISIL militants who have been trying to capture the facility for months, Iraqi officials said on Tuesday.
But Brig Gen Saad Maan, a spokesman for the interior ministry, denied during his appearance on state television that ISIL had taken over major parts of the refinery, as some Iraqi media reported.
Aside from its commercial significance as the country’s largest refinery, Beiji is on the road to Mosul – Iraq’s second largest city and the main centre of ISIL’s power in Iraq. If Iraqi forces hope to eventually take back Mosul, they have to secure Beiji – the scene of stubborn fighting for months.
Ammar Hikmat, the deputy governor for Salahuddin province where the refinery is located, said that the troops holding the refinery have been battered since Monday by a wave of suicide bombings carried out by armoured vehicles packed with explosives.
The government has several times said the refinery was under control, but militants have repeatedly counterattacked.
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