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Agreement with IMF monitoring will help Iraq to overcome financial crisis: official

Xinhua, November 11, 2015 Adjust font size:

Iraqi Finance Minister Hoshyar Zebari said that the agreement with International Monetary Fund (IMF) to monitor Baghdad economic policies will help Iraq to overcome the financial crisis by improving the performance of the country's monetary institutions, Iraqi official television reported on Wednesday.

"The agreement with IMF is to improve the fiscal and monetary performance in order to stabilize the monetary situation in Iraq. This is a positive program which will help Iraq to overcome the (financial) crisis," the state-run Iraqiya channel quoted Zebari as saying.

Zebari's comment came after his ministry agreed with IMF on a memorandum of understanding on Tuesday evening in Amman, the capital of neighboring Jordan, which allows IMF to monitor the Iraqi economic policies in accordance with Staff-Monitored Program (SMP) for the remaining period of 2015 and 2016.

A statement issued by the Finance Ministry statement after the agreement said "the program aims to assist Iraq in reforming its foreign exchange policy, financial management and banking supervision."

"The procedures that have been agreed upon aimed at implementing standards to maintain the stability of the financial sector," the statement said, adding that the agreement is an important step that would "strengthen Iraq's international status in the global financial markets" and paves the way for Iraq to obtain loans from international financial institutions and states.

The agreement with IMF came after 10 days of talks between the two sides, and Iraq was represented by experts from finance, oil and planning ministries in addition to the governor of the Central Bank of Iraq, it added.

On Oct. 18, the Iraqi cabinet approved the budget proposal for 2016 with total expenditure of 106 trillion Iraqi Dinar (about 87 billion U.S. dollars), with deficit of 23 trillion Iraqi Dinar (18.852 billion U.S. dollars).

As the crude oil price sharply decreased during the past few years, the government was obliged to design the 2016 draft budget in the light of the de facto situations and proposed reduction on public expenditure.

Observers see that the latest agreement with IMF is part of comprehensive reform plan pledged earlier by Iraqi Prime Minister Haider al-Abadi to combat corruption and mismanagement in all government institutions and economic policies.

Such failure pushed angry Iraqis in Baghdad and several other cities in the south to protest against slack public services, power shortage and massive corruption. Endit