Iraqi foreign exchange reserves increase due to currency devaluation and oil prices
Iraq’s foreign exchange reserves have risen from $48 billion to $64 billion since Iraq devalued its currency nearly a year ago, Iraqi Central Bank Governor Mustafa said on Tuesday. Ghalib.
Ghalib said the devaluation had helped boost reserves and Iraq’s economy was much healthier than amid the coronavirus pandemic, when oil prices fell and Baghdad was in preliminary talks with the Monetary Fund. international for a possible loan.
“We sometimes met twice a day with the IMF and the World Bank, but the Iraqi government’s financial situation is much better now,” Ghalib told Reuters in an interview at his office in Baghdad.
“Reserves could have declined in the 30s by the billions of dollars without the devaluation…higher oil prices also helped,” he added.
Ghalib said he expected Iraq’s 2022 budget to be based on an oil price of around $45 a barrel. Iraq, OPEC’s second largest producer, derives about 95% of its state revenue from oil sales.
Iraq currently owes its neighbor Iran around $5 billion for energy imports that are crucial to keeping the lights on, but Baghdad abides by US sanctions that prohibit it from pouring money into Iran. , said Ghalib.
Iraq has paid some of these energy debts in raw materials and supplies, for example by buying some $250 million worth of Russian-made Sputnik COVID-19 vaccines for Iran, as well as buying wheat for Tehran, he said.
Ghalib confirmed reports that Iraq had opened an account with the China-backed Asian Infrastructure Investment Bank, saying he had deposited about $100 million in the account for possible future payment for infrastructure projects.