Iraq’s Foreign Reserves Remain at Relatively Safe Levels, PM Adviser Says

Middle East Online

A person counting a stack of U.S. dollars.

Iraqi Prime Minister’s financial adviser Mazhar Muhammad Salih said on Saturday that Iraq’s foreign reserves remain at relatively safe levels, noting that the International Monetary Fund (IMF) estimates the reserves at around $79.2 billion for 2026, equivalent to approximately 9.6 months of imports of goods and services.

Salih told Iraq's state media (INA) that reserves covering more than six months of imports are generally considered a relatively safe level. However, he warned that the decline in reserves this year requires greater vigilance and close monitoring to prevent a continued fall and further erosion of the safety margin.

He explained that foreign reserves play a key role in supporting the stability of the Iraqi dinar’s exchange rate and meeting legitimate demand for U.S. dollars. At the same time, he cautioned against excessive dependence on oil revenues, saying a decline in oil income could reduce government revenues and foreign-currency inflows, putting additional pressure on reserves and the exchange rate.

Salih stressed the importance of preserving the independence of the Central Bank of Iraq’s monetary policy and avoiding the continuous use of foreign reserves or monetary financing to cover the budget deficit.

He called for greater control over public spending, efforts to increase non-oil revenues and sound liquidity management to safeguard monetary stability.

Salih said Iraq’s monetary position remains relatively reassuring and secure at present, but stressed that maintaining this stability in the long term depends on reforming public finances and reducing the country’s reliance on oil revenues.




PUKMEDIA