On January 24, 2021, an International Monetary Fund (IMF) representative said in a statement that “The Iraqi authorities have requested emergency assistance from the IMF under the Rapid Financing Instrument, and indicated their intention to also request a longer-term arrangement with the Fund in support of planned economic reforms”.

Iraq has requested emergency assistance from the International Monetary Fund and talks are ongoing between the parties, the IMF said.

The IMF’s Rapid Financing Instrument (RFI) offers quick financial assistance, which is available to all member countries facing an urgent balance-of-payments need.

Ali ALLAWI, Iraqi Finance Minister told the Bloomberg news agency earlier that Iraq was in talks with the IMF for a $6bn loan package.

The COVID-19 pandemic and the sharp decline in oil prices and output have aggravated Iraq’s economic vulnerabilities.

Real GDP growth was expected at -11 % in 2020, according to IMF, reflecting a contraction of oil output and an interruption of non-oil economic activity. The sharp decline in oil revenue was expected to widen the fiscal and external current account deficits to 20 and 16 % of GDP respectively.

ALLAWI said on January 24 that Iraq may ask for an additional $4bn in low-cost loans through another programme linked to government reforms.

In December 2020, Iraq devalued its national currency after a collapse in global oil prices, an important source of Iraq’s financial resources.

The OPEC member’s economy has only a small manufacturing base and almost all goods are dollar-priced imports. A drop in the value of the dinar makes those imports more expensive.

This article was edited using the data from the Aljazeera.com, Reuters.com, Iran.timesofnews.com, and Imf.org.