The deputy governor of Iraq's central bank has announced that foreign currency reserves have risen to close to $58 billion, and are expected to increase further thanks to a rise in oil revenues.
Mudher Kasim said higher global oil prices could result in a budget surplus for 2011.
Reuters quotes him as saying, “(The amount of reserves) has gradually increased since the beginning of last year, when it was $40 billion. Now it is close to $58 billion", while AlsumariaTV puts the opening figure at $50 billion.
Last October, Kasim had put reserves at around $50 billion, with 45 percent held in dollars, 45 percent in euros and 10 percent mainly in gold and British pounds.
Iraq earned $34.1 billion in oil revenue, an increase of $8.7 billion, or 34 percent, over budgeted revenue, in the first five months of this year, Deputy Prime Minister Hussain Al-Shahristani said in June.
The deputy governor said inflation — which quickened to 7.1 percent in July from 6.4 percent in June — was under control but being monitored carefully.
Iraq, battered by years of war and economic sanctions, depends mainly on imports for most goods, including food and building materials.
“If prices continue to increase and the inflation rate approaches two digits, monetary policy tools will be strongly activated to fight inflation,” he said.
Kasim said a plan to take off three zeroes from Iraq’s currency to simplify financial transactions was awaiting parliamentary approval and said the government should approve the project sooner rather than later.
(Sources: Reuters, AlsumariaTV)