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The IMF executive board today approved a three-year stand-by arrangement (SBA) for Iraq of SDR 3.831bn (about US$5.34bn, or 230 per cent of quota) to support the government’s economic reform program.
“Iraq’s economic reform program supported by the SBA aims to address the urgent balance of payments need, bring spending in line with lower global oil prices, and ensure debt sustainability,” the IMF said. “The program also includes measures to protect the poor, strengthen public financial management, enhance financial sector stability, and curb corruption. Iraq will require the support of the international community to implement these policies.”
In July 2015, Iraq received disbursement under the Rapid Financing Instrument equivalent to SDR 891.3 million (about US$1.24bn at the time of approval).
The IMF’s Management today also completed the first and second reviews of the staff-monitored program (SMP) with Iraq that was approved by the managing director in January.
The IMF said that Iraq is implementing sizable fiscal adjustment, mostly through inefficient capital expenditure retrenchment while protecting social spending, and financing. In the external area.
The IMF said arrears of payments due to oil companies should be paid down, following a due process of checking their validity, and the implementation of controls to prevent further accumulation of arrears to international oil companies and domestic suppliers.
The IMF said the legal framework of the Central Bank of Iraq needs to be strengthened, state-owned banks need to be restructured, and exchange restrictions need to be gradually removed. Measures need to be implemented to prevent money-laundering, counter the financing of terrorism, and strengthen the anti-corruption legislation, the IMF said.
The IMF said around 10 million people, comprising some 27 per cent of Iraq’s population, are in need of humanitarian assistance.