Dinar Iraq News
Iraq says IMF deal on track as cabinet approves reform package
Mon Jun 13, 2016
Iraq has approved measures requested by the International Monetary Fund to
unlock loans that should help the country overcome a cash crunch caused by
declining oil revenue, a senior government official said.
The agreement, reached last month between Iraq and the IMF, "is on track",
Mudher Salih, an adviser on financial policy to Prime Minister Haider al-Abadi,
told Reuters late on Sunday.
Among the measures approved are settling by the end of the year all arrears owed
to foreign oil companies operating in Iraq, Salih said. He did not say how much
was owed.
The OPEC nation sought budget support from the international community after a
collapse in oil prices over the past two years. The drop in revenue that
resulted caused the public deficit to widen and delayed payments to foreign oil
producers.
The IMF in May agreed to provide $5.4 billion over three years. But the funds
are conditional on Iraq's implementing measures to cut spending, increasing
non-oil revenue and settling several billion dollars in arrears to oil
companies.
The Iraqi government approved the measures at a meeting last week and informed
the IMF, Salih said in an interview.
Baghdad expects the IMF board to approve by the end of June or early July the
disbursement of a first tranche of about $600 million, he added.
The reforms include a tax increase, higher electricity fees and better banking
supervision to fight corruption and money laundering, Salih said. It also calls
for streamlining state-owned companies and auditing the bloated public payroll
to purge so-called "ghost employees" who don't show up to work, he said.
A recent increase in oil prices, to $50 a barrel from below $30 earlier this
year, will not delay the reforms, Salih said.
The agreement with the IMF should unlock a total of $18 billion in international
assistance over three years, Finance Minister Hoshiyar Zebari has said. He cited
the World Bank and the Group of Seven
industrialized nations among the donors, along with the IMF.
Zebari said Iraq expects to sell $2 billion in eurobonds in the last quarter of
this year, when international aid starts coming in, helping to lower its cost of
borrowing.
Iraq last sold international debt in 2006, when it issued about $2.7 billion of
bonds due in 2028 with a coupon of 5.8 percent.
Source:
reuters
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