IMF Approves $3.6 Billion Loan To Iraq

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The International Monetary Fund (IMF) has approved a $3.6 billion loan to Iraq that it desperately needs to run the government and rebuild the war-ravaged country, after a 15-month program supported by a so-called "Stand-By Arrangement" expired on March 18, last year.

The IMF executive board approved the new two-year loan under the same arrangement. The IMF-supported program is designed to support Iraq's economic growth over the next 24 months through February 23, 2012 and reduce the budget deficit to 19 per cent of GDP in 2010 and 6.0 per cent in 2011, besides posting a budget surplus in 2012.

About $455 million were immediately made available to the Iraqi authorities, IMF said Wednesday.

The successor arrangement will cover the country's balance of payments needs after the economy took a beating from falling oil prices last year, the Washington-based institution said.

Plummeting oil prices last year left Iraq, heavily dependent on oil exports for more than 95% of state revenues, with a public deficit of 20 per cent of economic output, Ron van Rooden, IMF mission chief in Iraq, said in a conference call with reporters.

The new loan comes ahead of Iraq's crucial parliamentary elections on March 7 and as US troops start pulling out of the country later this year.

(Market News Provided by RTTNews)