Iraq’s foreign exchange reserves have reached around $79.2 billion, a relatively safe level, but continued declines could narrow the country’s monetary safety margin in the future, Iraqi Prime Minister’s financial adviser Mazhar Mohammed Saleh said Saturday.
اضافة اعلان
In comments to the Iraqi News Agency (INA), Saleh said the International Monetary Fund (IMF) estimated Iraq’s foreign reserves at $79.2 billion for 2026, equivalent to around 9.6 months of imports of goods and services.
He said reserves covering more than six months of imports are considered a “relatively safe” level, but stressed that the decline recorded this year requires greater caution and monitoring.
“The decline in reserves recorded this year calls for greater caution and monitoring, not because they have reached a critical level, but out of concern that the downward trend could continue and reduce the safety margin in the future,” Saleh said.
In a report on Iraq issued in July 2025, the IMF projected that the country’s total foreign reserves would fall from $100.3 billion in 2024 to $91 billion in 2025 and $79.2 billion in 2026.
Saleh said foreign reserves play a central role in supporting the stability of the Iraqi dinar’s exchange rate and represent the currency’s “main line of defense” against pressure, allowing the Central Bank of Iraq to provide dollars and meet legitimate demand.
He warned that the country’s heavy reliance on oil revenues remains one of its main sources of risk. A decline in oil revenues would reduce government income and foreign currency inflows, increasing pressure on reserves and the exchange rate.
Saleh also called for maintaining the independence of the central bank and avoiding the continued use of reserves or monetary financing to fund the budget deficit, warning that such practices could deplete reserves and increase inflationary pressures.
He said the sustainable solution lies in controlling government spending, particularly current expenditures, increasing non-oil revenues and using monetary policy tools to manage liquidity.
Saleh stressed that Iraq’s monetary situation “remains reassuring and relatively safe,” but said its sustainability depends on public finance reforms and reducing reliance on oil.
Iraq’s public finances remain heavily dependent on oil revenues. In its 2025 report, the IMF projected a decline in the country’s foreign exchange reserves alongside a widening budget deficit estimated at 9.2% of gross domestic product.
Source: Anadolu Agency
