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Iraq requests an IMF programme for financing and policy support

Iraq has requested a formal International Monetary Fund programme, and fund chief Kristalina Georgieva has pledged strong support. Iraqi officials also held reform talks at the annual meetings in Bangkok. The proposed country programme aims to provide financing and policy support. It comes amid separate pressure on an Iraqi bank facing US sanctions and concerns over access to deposits.

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An Iraqi flag flies outside a pale government building behind a security wall and palms beside a quiet street.

Iraq seeks a formal fund programme

Iraq has requested a formal programme from the International Monetary Fund, managing director Kristalina Georgieva said on 17 October. Speaking at the annual IMF and World Bank meetings in Bangkok, Thailand, she said the fund would strongly support the country. The request involves financial resources and policy support through a lending programme. Support remains at the stage of an intention to establish a lending programme for Iraq. The annual meetings in Bangkok ran from 12–18 October.[1], [2]

Iraqi Finance Minister Falah Sari led a delegation that included central bank governor Nizar Hussein. Their stated aim was to strengthen coordination with international financial institutions and support economic and financial reform. Sari met fund officials including Mohammed Muait, executive director for Iraq and the region, and incoming executive director Ali Hussaini. Discussions covered Iraq’s economic situation, reform progress and ways of strengthening cooperation.[2]

Bank-specific pressure forms part of the backdrop

Separately from the country programme, Iraq’s International Development Bank faces US sanctions. The US Treasury alleged that it facilitated Iran’s access to dollars and had links to Iran-aligned armed groups in Iraq. The bank denied those allegations and said it follows Iraqi central bank regulations and international law. Kurdistan 24 reported that frozen overseas assets had reduced the bank’s ability to return depositors’ money.[2]

The bank held total deposits of 2.6 trillion dinars at the end of March. An internal bank source put citizens’ and traders’ savings and deposits at about 1.5 trillion dinars. Kurdistan 24 anticipated mass withdrawal attempts beginning on 18 October. The bank also participates in Tatwir, an electronic salary-payment project for Iraqi government employees.[2]

The fund warns of regional financial strain

At the same briefing, Georgieva said the fund had lowered its growth forecast for the Middle East and North Africa by 2 percentage points. She highlighted energy costs, persistent inflation and the burden of servicing debt. Strong buffers and structural reforms in several economies, particularly Gulf Cooperation Council members, had limited the deterioration, she said. Her regional assessment distinguished energy exporters from importers and stressed differing starting conditions among economies facing recent shocks.[1]

References

  1. News sourceThe NationIraq requests an IMF programme for financing and policy support↩1↩2
  2. News sourceKurdistan 24IMF intends to support Iraq through a lending programme↩1↩2↩3↩4
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