Low Oil Prices Badly Impact Iraq’s Forex Reserves, 14 OCT
On Tuesday, the governor of the Iraqi Central Bank said that Iraqi decreasing oil revenues reflecting negative impact on Iraqi foreign currency reserves and it is about 60 billion but these are enough to cover more than 18 months for the amount of imports. According to the OPEC, Iraq is considered the 2nd largest oil producer. There is still fluctuation in the global oil prices since last 18 months and Iraqi expenses are increasing to control the security situation especially fight against Islamic State terrorist groups. The Iraqi government has declared the financial deficit of 25 billion U.S dollars and the budget deficit are at 100 billion U.S dollars. All these factors caused decline in the foreign cash reserves.
The international Monetary Fund said that Iraqi foreign cash reserves were at 78 billion U.S dollars at the end of 2013 and decreased at 66 billion U.S dollars at the end of 2014. Ali Al Alak said that a decline in the U.S dollar-denominated expenses provided an ease in the requirement of foreign currency. He said that Iraqi level of foreign cash reserves are more comfortable but these foreign cash reserves are decreasing significantly on monthly basis, but these are not too high. It we consider at the market price level, we will see stability in the prices. So we should not take worry about Iraqi foreign cash reserves. The Iraqi government has planned to boost up its economy, so the government has issued domestic bonds of 5 billion U.S dollars and issuance of these bonds internationally would provide more help to enter in the global financial system, which will improve the functionality in the financial institutions of the country.
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