Iraq seeks to postpone Paris Club reimbursements - Reuters News 01-JUL-2016
Iraq seeks to postpone Paris Club reimbursements - Reuters News
01-JUL-2016 11:32:01 AM
BAGHDAD, July 1 (Reuters) - Iraq will seek to postpone the repayment of debt owed to the Paris Club of creditor nations as it grapples with a liquidity crisis caused by low oil prices and the cost of the war on Islamic State, the central bank said on Friday.
Iraq will request to delay the payments until 2019, as it is due to receive financial support from the International Monetary Fund (IMF) over the next three years, the central bank said in a statement.
Most of OPEC-member Iraq's sovereign debt was contracted under the rule of Saddam Hussein, the former president toppled in 2003 by a U.S.-led invasion.
Iraq owes $15 billion to foreign governments, including $9 billion to the Paris Club members, according to Mudher Salih, financial advisor to the prime minister.
Its annual payment to the Paris Club is about $800 million, he said. Iraq also has $2.7 billion in sovereign bonds due 2028.
The IMF in May gave initial agreement to provide $5.4 billion over three years to help Iraq plug a budget gap.
Oil prices collapsed in 2014, just as Iraq needed more resources to fight Islamic State, the ultra-hardline group that took control of vast tracts of its northern and western regions. The war has displaced about 4 million people.
(Reporting by Maher Chmaytelli; Editing by Janet Lawrence)