Tag Archive | "International Monetary Fund"

Iraq Cuts Gold Holdings by a Quarter

By John Lee.

Reuters reports that Iraq cut its gold holdings by a quarter in November.

Data from the International Monetary Fund (IMF) showed that the country’s stocks fell to 29.9 tonnes.

(Source: Reuters)

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Iraq Boosts Gold Reserves

By John Lee.

Iraq made its first major move in years to boost its gold reserves, joining central banks from emerging market economies such as Brazil and Russia in diversifying its foreign reserves.

According to a report from the Lebanese Daily Star, central bank purchases have been one of the biggest drivers of gold’s rally since 2010 – a year which saw central banks turning net buyers of the precious metal for the first time in two decades amid growing doubts about the stability of the dollar as the world’s top reserve currency.

Over the course of three months between August and October this year, Iraq’s gold holdings quadrupled to 31.07 tonnes, the International Monetary Fund‘s monthly statistics report showed on Thursday.

(Source: Lebanese Daily Star)

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IMF Approves 7-Mth Extension of Stand-By Arrangement

By John Lee.

The Executive Board of the International Monetary Fund (IMF) has approved a seven-month extension of Iraq’s Stand-By Arrangement (SBA), to February 23, 2013.

The SBA had been scheduled to expire on July 23, 2012. The extension, which had been requested by the Iraqi authorities, will provide them with time to implement the policy measures needed to complete the combined third and fourth reviews under the SBA.

The extension will, in particular, provide time for discussions on fiscal policies for the remainder of 2012 and on measures to improve the functioning of the exchange regime.

The two-year Stand-By Arrangement (SBA) in the amount of SDR 2.38 billion (about US$3.58 billion), was approved by the IMF’s Executive Board on February 24, 2010 (see press release 10/60). The IMF’s Executive Board completed the first program review on October 1, 2010 (see press release 10/373), and the second review on March 18, 2011 (see press release 11/90).

At the time of the second review, the program duration was extended by five months to July 2012, along with a rephasing of program disbursements based on a shift in financing needs. Total resources currently available to Iraq under the arrangement amount to the equivalent of SDR 1307.24 million (about $1.96 billion).

(Source: IMF)

(Picture: Christine Lagarde, Managing Director, IMF)

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IMF Forecasts Accelerating Growth for Iraqi Economy

The International Monetary Fund (IMF), in its latest World Economic Outlook, makes the following forecasts for Iraq:

The report sees strong growth continuing, with a figure of 8.8% projected for 2017.

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Statement by IMF Managing Director Christine Lagarde on Iraq

Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), issued the following statement after a meeting with H.E. Nouri Al-Maliki, Prime Minister of Iraq in Washington on Tuesday:

It was a pleasure to meet Prime Minister Al-Maliki today. Over the past several years, Iraq and the International Monetary Fund have engaged in a very successful partnership, anchored by successive IMF-supported economic programs. This partnership has facilitated substantial debt relief and helped achieve macroeconomic stability, including a strong dinar, low inflation, and a resumption of economic growth, in a very challenging political and security environment.

Prudent fiscal policies are essential to maintaining macroeconomic stability and fostering inclusive growth. In this context, I am very encouraged by the government’s new budget proposal for 2012 that was recently submitted to the Iraqi Council of Representatives. The proposal aims to restrain the growth of current spending, thus freeing up resources for infrastructure investment and social support, while limiting the size of the budget deficit. The proposed budget would allow the current Stand-By Arrangement (SBA) to continue to provide a safety net to the budget in case oil revenues were to fall sharply.

Promoting policies that lead to more inclusive growth is central to our engagement with Iraq. We are working closely with the Iraqi government to rebuild its essential economic institutions to help improve economic management and public service delivery. The current SBA offers a framework for Iraq’s structural reform agenda, by promoting better public financial management, including the management of Iraq’s hydrocarbon resources, and developing a financial sector that can support private sector activity and job creation. We look forward to further progress in these areas.

We remain committed to helping Iraq in its efforts to foster sustained and inclusive economic growth, generate viable employment opportunities, and improve living standards for all Iraqis. An IMF staff mission is scheduled to meet the authorities in January to discuss progress under the program and next steps.

(Source: IMF)

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IMF to Fund Baghdad-Turkey Highway

The Ministry of Construction and Housing is to build a highway linking Baghdad with Turkey, according to a report from Azzaman.

The 508 km road is to be financed by the International Monetary Fund (IMF).

“This project is a challenge to the ministry since it assumes great economic significance for the country,” the ministry quoted minister Mohammed Saheb as saying.

In the 1980s Iraq built a road nearly 1,000 km long linking its southern port of Basra with both Jordan and Syria. The highway to Turkey was planned but it was shelved due to the ruinous 1980-1988 war with Iran.

Once completed, Iraq will have one of the most extensive and modern highways in the Middle East, linking its southern ports and major cities with neighbouring states.

(Source: Azzaman)

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IMF Suggests Stable Iraqi Dinar

A report on Monday by the International Monetary Fund (IMF) suggests that the Iraqi dinar is currently fairly valued at 1170 dinars to the US dollar:

The CBI [Central Bank of Iraq] will continue to aim at keeping inflation low, predominantly by maintaining a stable exchange rate. The low level and the relative stability of inflation do not suggest any significant over- or under-valuation of the Iraqi dinar. Also, a stable exchange rate continues to provide a solid anchor for the public’s expectations in an otherwise highly uncertain environment and in an economy with a very low level of financial intermediation.

The report continues, “Meanwhile, the CBI will continue to keep its policy interest rate positive in real terms. To enhance mobilization of domestic financing, limitations on state-owned banks’ use of government deposits for investing in Treasury bills have been reduced, while the pension fund has also been allowed to invest in Treasury bills and to participate in auctions directly.

It also allows for the possibility of an upward drift in the value of the dinar over the years:

Staff supports the CBI’s policy of managing the exchange rate of the Iraqi dinar to keep inflation low. A stable exchange rate continues to provide a solid anchor for the public’s expectations in an otherwise highly uncertain environment. Over time, rising oil revenues could put upward pressure on the real exchange rate, which would warrant allowing greater exchange rate flexibility.

The full document can be downloaded by clicking here.

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IMF Approves $471 Million Payment to Iraq

The Executive Board of the International Monetary Fund (IMF) completed the second review of Iraq’s economic performance under a program supported by a Stand-By Arrangement (SBA) on Friday. Completion of the second review makes an additional SDR 297.1 million (about US$471.1 million) available for disbursement, bringing the total resources currently purchased by Iraq under the SBA to SDR 1.069 billion (about US$1.7 billion).

The Executive Board also approved a waiver of applicability of the end-December 2010 performance criteria on the central government fiscal deficit and on the central government spending bill, for which data is not yet available. The Executive Board furthermore approved an extension of the SBA by five months to July 2012, and a rephasing of access under the SBA to match disbursements with Iraq’s balance of payments financing needs.

The SBA was approved on February 24, 2010 (see Press Release No. 10/60) for SDR 2.38 billion (about US$3.77 billion). The SBA supported program aims to ensure macroeconomic stability and provide a framework for advancing structural reforms in Iraq.

Following the Executive Board’s discussion on Iraq, Mr. Naoyuki Shinohara, Deputy Managing Director and Acting Chair, stated:

“Iraq has maintained macroeconomic stability under difficult external and internal circumstances, while making efforts to rebuild key economic institutions. Inflation has remained subdued, and the exchange rate has remained stable. The 2011 budget aims to accelerate investment in public services and infrastructure, and accommodates higher social safety net provisions to support those in need. Iraq’s rehabilitation needs remain large and the higher investment spending is essential to help create a vibrant private sector that provides employment opportunities for Iraq’s large labor force, thus helping to reduce poverty. At the same time, a strong emphasis on ensuring the quality of public spending will be important.

“Decisive efforts to rebuild key economic institutions and improve governance will be critical for private sector development. The formation of the new government and the expected increase in oil production in the coming years offer an opportunity to do so while maintaining macroeconomic stability. Further strengthening public financial management encompasses the introduction of an automated financial management and information system and improvements in cash management which would eventually culminate in the establishment of a single treasury account. Establishing a framework for oil revenues to succeed the Development Fund for Iraq should help ensure continued accountability and transparency. In the financial sector, moving ahead with the financial and operational restructuring of the two largest state-owned banks and enhancing the central bank’s supervision capacity will contribute to creating a financial sector that can provide essential services to the private sector.

“Iraq continues to make progress to conclude debt agreements and resolve outstanding claims under terms comparable to the 2004 Paris Club Agreement.”

(Source: IMF)

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