Iraq foreign reserves at safe threshold, PM's financial adviser says

BAGHDAD, Iraq — Iraq's foreign currency reserves stand at a relatively safe level, covering more than nine months of goods and services imports, the prime minister's financial adviser, Mazhar Mohammed Salih, told the state news agency. Salih cited the International Monetary Fund's 2026 estimate of Iraq's total reserves at approximately $79.2 billion, noting that the current foreign exchange holdings are tracking near that figure. He said covering more than six months of imports meets the reserve adequacy indicator's relatively safe threshold, though the downward trend recorded this year warrants close monitoring. A continued decline in reserves, rather than any drop reaching a critical level, could erode the safety margin, Salih added. Salih described foreign reserves as the main line of defense in supporting the stability of the Iraqi dinar's exchange rate and in enabling the Central Bank to meet dollar supply needs. He warned that any fall in oil revenues would weaken budget income and foreign currency inflows, increasing pressure on reserves and price stability. Salih called for preserving the Central Bank's monetary policy independence and avoiding the routine use of reserves to finance the budget deficit. He said a sustainable solution lies in controlling public spending, particularly current expenditures, and in expanding non-oil revenues. Iraq's cash position remains relatively safe at present, he said, but caution is needed given the ongoing reserve decline.