SULAIMANI (ESTA) — The International Monetary Fund said Iraq had requested emergency assistance from the IMF and that talks were ongoing between the parties.
“The Iraqi authorities have requested emergency assistance from the IMF under the Rapid Financing Instrument, and indicated their intention to also request a longer-term arrangement with the Fund in support of planned economic reforms,” an IMF representative said in an emailed statement late on Sunday, according to Reuters.
Iraqi finance minister Ali Allawi told Bloomberg News earlier that Iraq was in talks with the IMF for a $6 billion loan package to prop up its ailing economy.
“Discussions of the authorities’ request for emergency assistance are ongoing,” the IMF representative stated.
The IMF’s Rapid Financing Instrument provides quick financial assistance, which is available to all member countries facing an urgent balance-of-payments need.
Bloomberg cited Iraqi finance minister as saying that the federal government may ask for an additional $4 billion in low-cost loans through another program linked to government reforms.
OPEC’s second-largest producer forecasts a 2021 budget deficit of 71 trillion dinars ($49 billion). Iraq devalued the dinar last month after a collapse in global oil prices, a major source of Iraq’s financial resources.
Last month, the Iraqi government borrowed more than $25 billion from the central bank to pay public sector salaries and meet other financial requirements, according to Bloomberg News.
Allawi told Bloomberg that Iraq also planned other types of funding to help plug the budget gap. Once the spending plan was approved, the government would move to issue $5 billion in domestic bonds to expand its financial base.
In 2016, the IMF also lent $5.4 billion over three years to Iraq, which was hit hard by a sharp drop in oil prices.
