Iraq Growth '12%', CBI to Stay Independent

Iraq has told the International Monetary Fund that its central bank would remain independent, despite Prime Minister Nouri al-Maliki winning a court ruling in January placing the central bank under the control of the cabinet, rather than the parliament.

The ruling attracted criticism that the Central Bank of Iraq (CBI) might lose its independence.

The government, the bank and the court itself have since insisted repeatedly that the ruling would not compromise the bank's independence, according to a report from Reuters.

A memorandum from the Iraqi Government to the IMF stated, "The CBI will continue to be independent in the pursuit of its policy objectives".  It was signed on 3rd March 3 by Iraq's central bank governor Sinan al-Shabibi, and finance minister Rafe al-Essawi, and was published on Monday by the IMF. The full document can be downloaded by clicking here.

The IMF staff "welcomes the authorities’ continued commitment to safeguard the independence of the CBI, which is critical for maintaining confidence in the Iraqi dinar".

The statement predicts that Iraq's Gross Domestic Product (GDP) will grow by 12 per cent in 2011 as a result of increased oil production, which accounts for about 95 per cent of Iraq's economy. It predicted exports of 2.2 million barrels per day, in line with forecasts that appeared in the 2011 budget.

The memorandum repeated budget estimates of revenue and current spending, which would leave a deficit of the equivalent of 15.7 trillion dinars ($13.4 billion).

In the memorandum, published on the IMF website, Iraq also said it aimed to complete a restructuring of its two largest state banks by mid-June 2011.

(Sources: Reuters, IMF)

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