SULAIMANI (ESTA) — Iraqi finance minister said the country had recently resumed talks with the International Monetary Fund for a loan of up to $4 billion, Bloomberg reported on Friday.
Talks between Iraq and the IMF began last year amid the pandemic-related demand shock that sent oil prices tumbling, according to Bloomberg.
But the talks were tabled as crude and the country’s foreign reserves recovered. The government is preemptively looking ahead for help to recover its budget deficit.
“I don’t think we’ll reach an agreement with IMF before end of this year,” Bloomberg quoted minister Ali Allawi as saying.
Earlier this year, Allawi told Bloomberg that Iraq was in talks with the IMF for a $6 billion loan package to prop up its ailing economy.
In January, the IMF said Iraq had requested emergency assistance from the group under the Rapid Financing Instrument and that indicated their intention to also request a longer-term arrangement with the Fund in support of planned economic reforms.
The IMF’s Rapid Financing Instrument provides quick financial assistance, which is available to all member countries facing an urgent balance-of-payments need.
Allawi also told Bloomberg earlier this year that the federal government might ask for an additional $4 billion in low-cost loans through another program linked to government reforms.
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.
