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Iraq: Foreign exchange reserves down 12.5% in Q1 of 2020

December 14, 2020 at 10:54 am

An Iraqi counts his dinar banknotes on 22 June 2017 [Ali Choukeir/AFP/Getty Images]

Iraq’s foreign exchange reserves decreased 12.5 per cent during the first quarter of 2020 to 68.5 trillion dinars ($57.5 billion) down from 78.25 trillion dinars ($65.75 billion) in the last quarter of 2019, the Iraqi Central Organisation for Statistics (COS) said.

COS added in a statement that the country’s internal public debt has increased from 38.33 trillion dinars ($32.21 billion) in Q4 of 2019 to 43.45 trillion dinars ($36.51 billion) in Q1 2020.

The decline in foreign exchange reserves coincided with a decline in oil revenues, an increase in expenditure resulting from the reconstruction of several provinces, and the increase in the salary bill.

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On 12 November, parliament approved a plan for the government to borrow 12 trillion Iraqi dinars ($10 billion) to manage its fiscal crisis, including the delayed salaries of state employees.

This is the second time the government has asked the parliament to grant it authorisation to borrow.

Earlier in June, the Iraqi parliament allowed the government to borrow 15 trillion dinars ($12.5 billion) locally, and $5 billion from abroad to cover the fiscal deficit.