Iraq to issue bonds worth billions of dollars

03/05/2015 14:14




BAGHDAD / Obelisk: to finance the deficit, Zebari said that the Finance Ministry is considering measures including the issuance of bonds and borrowing from state banks and the conversion of some of the Iraqi banking assets in the Central Bank to bonds.

Finance Minister Hoshiyar Zebari said Iraq is looking with Deutsche Bank and Citibank version potential for bonds worth about six billion dollars in its efforts to cover the expected huge budget deficit this year.

Government revenues have fallen with the drop in oil prices at a time when Iraq is waging a costly militants organize an Islamic state in the northern and western provinces military campaign, which resulted in a potential shortfall of approximately $ 25 trillion mortgage dinars ($ 21.4 billion).



To finance the deficit, Zebari said that the Ministry of Finance is considering measures including the issuance of bonds and borrowing from state banks and the conversion of some of the Iraqi banking assets in the Central Bank to bonds.

And perhaps also considering raising funds through sales of oil futures if the Council of Ministers rejected plans to issue bonds for ten years. Officials say the council of ministers headed by Haidar al-Abbadi sees the proposed interest rate at nine percent too high.

And payment of the sharp drop in oil prices Zebari to review the budget for the year 2015 several times to ensure each of them a reduction in the expected revenue from crude exports. I assumed the final version an oil price of $ 56 a barrel and exports of 3.3 million barrels per day.

Iraq's oil exports remain high since the beginning of the year without the 2.6 million barrels per day due to reasons such as bad weather at the southern export terminals and major exports disappointing from the north through a pipeline run by the Kurds. But Zebari said the amounts are increasing.

Zebari said from his office in Baghdad, "I think people now realize that this budget realistic."

He said the proposal to transfer 50 percent of the assets of state-owned banks with the central bank into bonds Seder about five billion dollars to get a $ 1.8 billion through the International Monetary Fund and Iraq also will use special drawing rights.

The government has also imposed taxes on imported cars and cards of mobile phones and the Internet. And hopes to borrow six billion dollars from state banks and provide two billion dollars by reducing the rewards of government employees who earn high salaries.

Zebari said "In general, we try projected deficit through our own resources to cover."

He said Zebari, a Kurd, said the authorities in the capital and the Kurdistan Regional Government in the semi-autonomous north of the country is still committed to the agreement to export oil despite disagreements about the amount of exports and payments.

Kurds complain that Baghdad did not comply with its obligations to pay them part of government spending, while Baghdad says that only a small fraction of the northern oil fields is transported for export via Turkey.

Zebari said "we deal with different expectations and a lack of confidence. But the agreement coherent and talks were continuing."

He added that the government has turned 250 trillion dinars for the Kurds since the beginning of the year, a small fraction of the amount originally expected. He hoped to pay the other part, and soon a new round of talks.


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