IMF Mission Reaches Staff-Level Agreement on Financial Assistance under Three-Year Stand-By Arrangement with Iraq

The Iraqi authorities and the staff of the International Monetary Fund (IMF) have reached a staff-level agreement on a request for a 36-month Stand-By Arrangement (SBA). Under the arrangement, and subject to the approval of the IMF executive board, Iraq could have access to IMF credit amounting to SDR 3.894 billion (about US$5.4 billion) subject to the finalization of the macroeconomic framework and financing assurances. Iraq’s previous US$3.7 billion (200 percent of quota) SBA approved in February 2010 expired on February 23, 2013. Iraq received a $1.2 billion disbursement under the Rapid Financing Instrument in July 2015.

Mr. Christian Josz, Mission Chief for Iraq, issued the following statement today in Amman:

“Iraq has been hit hard by the conflict with ISIS and the precipitous fall in oil prices. The ongoing armed conflict with ISIS continues to strain the country’s resources and is resulting in new waves of internally displaced people, now reaching over 4 million. The steep fall in oil prices is causing a large external shock to the balance of payments and budget revenue, which depend predominantly on oil export receipts.

“To address the urgent balance of payments need, the Iraqi authorities and IMF staff have agreed on a three-year program of economic and financial policies that will bring spending in line with the lower level of oil prices and ensure debt sustainability. The program also includes measures to protect the poor, strengthen public financial management, enhance financial sector stability, and curb corruption. The Iraqi authorities deserve the support of the international community in the implementation of these policies.

“The IMF Board could consider the three-year SBA once agreed prior actions have been implemented, in June or July.

“During the mission the team met with the Minister of Finance Hoshyar Zebari, Acting Governor of the Central Bank of Iraq (CBI), Ali Allaq, the Financial Adviser to the Prime Minister Mudher Saleh, and officials from the ministries of finance, oil, planning, electricity, the CBI, and representatives from the Kurdistan Regional Government, Board of Supreme Audit, and pension commission. The team would like to thank the Iraqi authorities for their cooperation and the open and productive discussions.”