Financial expert: Iraq’s budget deficit is due to bond issuance
Financial expert: Iraq’s budget deficit is due to bond issuance
2025-03-25 00:01
Shafaq News/ Financial expert and former director general of the Central Bank of Iraq, Mahmoud Dagher, attributed the country’s budget deficit on Tuesday to the Iraqi Ministry of Finance issuing large bonds.
Dagher told Shafaq News Agency, “The budget deficit is behind the Ministry of Finance’s efforts to issue bonds worth 3 trillion dinars to obtain cash liquidity to cover its expenses.”
He added, “Given the difficulty of marketing bonds to the public, interest rates on bonds were raised and they were marketed through banks this time, given the latter’s liquidity and preference for risk-free, profitable securities such as government bonds.”
Dagher expects this move to attract banks, given that the interest rates offered are close to the returns generated from other activities.
The Iraqi Ministry of Finance is seeking to issue national bonds worth 3 trillion dinars (about $2.3 billion) allocated exclusively to local banks, according to a letter issued by the Central Bank to banks.
She noted that the bonds will be divided into two tranches: the first, worth half a million dinars per bond, for a two-year term, with an 8% annual interest rate; and the second, worth one million dinars per bond, for a four-year term, with an annual interest rate of 10%.
The sale is scheduled to take place from March 20 to 29.
shafaq.com
