Mazhar Mohammed Saleh, the Financial Advisor to the Iraqi Prime Minister, stated on Saturday that the country’s foreign exchange reserves remain within relatively safe levels. He emphasized the necessity of closely monitoring this trend to preserve a sufficient safety margin for the economy. According to Saleh, citing data from the International Monetary Fund (IMF), Iraq’s total reserves are projected to reach approximately 79.2 billion dollars by 2026, based on estimates published in 2025. This figure is equivalent to roughly 9.6 months of imports for goods and services.<\/p>\n
Saleh noted that current reserve levels are approaching this benchmark. He explained that coverage exceeding six months of imports is considered a relatively safe level according to efficiency indicators for foreign reserves. However, he warned that the recorded decline in reserves during the current year requires increased caution and vigilance. This concern stems not from the reserves reaching a critical threshold, but from the fear that a continued downward trajectory could erode the safety margin in the future.<\/p>\n
The advisor highlighted the pivotal role of foreign reserves in supporting the stability of the Iraqi Dinar’s exchange rate. He described these reserves as the primary line of defense against currency pressures, enabling the Central Bank to provide US dollars and meet legitimate demand. This capacity contributes significantly to protecting macroeconomic stability and growth. Despite this protective function, Saleh pointed out that heavy reliance on oil revenues remains one of the most prominent sources of risk. Any decrease in oil revenues leads to a reduction in government income and foreign currency inflows, which can increase pressure on reserves and exchange rate stability.<\/p>\n
To address these vulnerabilities, Saleh argued that a sustainable solution must focus on controlling government spending, particularly current expenditures. He also stressed the importance of developing non-oil revenue streams. Furthermore, he advocated for the use of monetary policy tools to manage liquidity and maintain monetary stability. These measures are essential to mitigate the risks associated with oil price volatility and ensure long-term economic resilience. The official remarks underscore the delicate balance Iraq must maintain between managing its substantial oil-dependent economy and preserving external financial buffers against global market fluctuations.<\/p>\n
This story was produced in the newsroom from the disclosed sources named above.<\/em><\/p>\n