Official: Iraq Has Not Yet Applied for an IMF Loan

Financial Advisor to the Iraqi Prime Minister Mazhar Mohammed Saleh revealed on Saturday that Iraq has not yet submitted a formal request for a loan from the International Monetary Fund (IMF). The Iraqi News Agency quoted Saleh as saying that “Iraq enjoys close relations with the IMF, and since 2003, it has concluded more than five agreements, three of which were Stand-by Arrangements, while the other agreements related to emergency support.” Iran’s war has caused significant disruptions in supply chains, especially in the energy sector, which was severely affected by a near-complete closure of the Strait of Hormuz, through which about 20 percent of global oil supplies pass. Saleh stated that “the Fund has played a significant role in supporting the Iraqi economy over the past 23 years, especially since Iraq is now considered one of the biggest victims of the ongoing war in the region, considering that 85 percent of its oil exports pass through the Strait of Hormuz. This has caused significant harm and international concern, given that Iraq is an important and active member in the stability of the region and world markets.” He pointed out that there is an Iraqi government team in contact with the IMF, meeting with Fund officials for consultations twice a year. He clarified that “Iraq signed an agreement with the IMF on July 7, 2016, for a Stand-by Arrangement by providing a significant loan, which played a major role in supporting the general budget,” noting that “signing an agreement with the Fund is a matter decided by the Iraqi government, and this does not prevent consultations between the two parties, as Iraq is a member of this institution responsible for global stability.” Saleh mentioned that “Iraq will borrow from the International Monetary Fund if the need arises, but there is no formal request from the government yet, and the current need is for the war in the region to stop, and for its geopolitical impacts on oil exports to cease.” He added that “technical assistance from the IMF is available now, unlike the issue of financing, which requires the approval of a program by the Iraqi government.” He explained that “the loan itself represents a reform program to support the budget or to achieve social goals, such as supporting the health and education sectors, because it is a human investment that must be subject to conditions defining expenditure directions and commitment to a reform program agreed upon by the Iraqi state and the IMF.”