Government financial advisor: Iraq’s foreign reserves are within safe levels
Government financial advisor: Iraq’s foreign reserves are within safe levels
8-29-2026
The Prime Minister’s financial advisor, Mazhar Muhammad Salih, confirmed on Saturday that Iraq’s foreign reserves remain at relatively safe levels, noting the importance of monitoring this trend and maintaining the safety margin. Salih told the official news agency that “the International Monetary Fund estimated Iraq’s total reserves at about $79.2 billion for 2026, according to its estimates published in 2025, which is equivalent to about 9.6 months of imports of goods and services,” indicating that Iraq’s foreign reserves are currently close to this level.
He added that “covering more than six months of imports is, according to the reserves efficiency index, a relatively safe level,” noting that “the decline recorded in reserves during the current year calls for more caution and monitoring, not because they have reached a critical level, but for fear that the downward trend may continue, which could reduce the margin of safety in the future.”
Saleh also explained that “foreign reserves play a pivotal role in supporting the stability of the Iraqi dinar exchange rate, and represent the main line of defense against pressures on the currency, through the Central Bank’s ability to provide dollars and meet legitimate demand for them, which contributes to protecting stability and overall growth.”
He also pointed out that “the heavy reliance on oil revenues remains one of the most prominent sources of risk, as any decrease in oil revenues leads to a decline in government revenues and foreign currency inflows, which may increase pressure on reserves and exchange rate stability.”
He stressed the importance of “maintaining the independence of the central bank’s monetary policy and not using foreign reserves or monetary financing continuously to finance the budget deficit, as this may lead to the depletion of reserves and an increase in inflationary and monetary pressures.” Saleh added that “the sustainable solution lies in controlling government spending, especially current expenditures, and developing non-oil revenues, in addition to using monetary policy tools to manage liquidity and maintain monetary stability.”
Saleh also stated that “Iraq’s monetary situation remains relatively reassuring and secure at the present time, but the continued decline in reserves warrants caution,” stressing that “the sustainability of this situation is linked to economic policy, public finance reform, and reducing dependence on oil.”
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