Iraq Central Bank Sees Foreign Reserves at $60b at Year’s End



Iraq Central Bank Sees Foreign Reserves at $60b at Year’s End

OPEC’s second-biggest producer was hurt by the slump in oil revenue as well the war with Islamic State militants

Iraq’s foreign currency reserves will total about $60 billion by the end of 2015, higher than the International Monetary Fund predicts and at a level sufficient to maintain the dinar’s buying power, central bank Governor Ali Mohsen Ismail said.

Reserves are still sufficient to cover six months worth of imports, despite the decrease in government revenue due to the drop in oil prices, Ismail said in a statement on the central bank’s website Tuesday. Gross foreign assets with the central bank stood at $58 billion at the end of September, according to official data. The IMF sees reserves reaching $50 billion by year-end, Ismail said, without explaining why his projection is more optimistic.

OPEC’s second-biggest producer was hurt by the slump in oil revenue as well the war with Islamic State militants who took control of major Iraqi cities. The government canceled a $6 billion bond sale to fund its budget shortfall after potential investors demanded higher interest rates than it was willing to pay. The IMF expects the budget deficit to widen to 17.4 percent this year from 5 percent in 2014.

The central bank provided the Ministry of Finance with about $600 million dollars monthly in the first nine months of 2015 to finance its foreign currency needs, which means “reserves can continue covering adequately, given that they stand at $60 billion,” Ismail said.

http://www.businessweekme.com/Bloomberg/newsmid/190/newsid/1505/Iraq-Central-Bank-Sees-Foreign-Reserves-at-60b-at-Years-End