Iraq has agreed to forgive 80% of Mozambique's bilateral debt, with the remaining 20% restructured over 15 years, following a four-year grace period (2029-2043).
The original debt of $60.26 million was incurred in 1979-1980 for oil supply agreements but had grown in the meantime to $320.16 million. Under the agreement, $256.13 million has been forgiven.
Negotiations took place from 2-6 February 2025 in Abu Dhabi, involving senior officials from Iraq's Ministry of Finance, Foreign Ministry, and Central Bank, alongside representatives from Mozambique's Ministry of Finance and its Economic and Commercial Advisor in Portugal and Spain.
DINAR REVALUATION REPORT: It is possible that Iraq will revalue its dinar in 2025
Whether Iraq will revalue its dinar in 2025 depends on several factors, although it is not possible to predict with certainty whether this will occur. However, here are some key aspects that could influence a possible revaluation:
Political and economic stability: Iraq still faces significant challenges in terms of political, economic and security stability. For a revaluation of the dinar to be successful, it is essential that there be a stable and predictable economic policy. If Iraq manages to improve its governance and internal stability, this could build confidence in its currency.
Oil prices: The Iraqi economy is highly dependent on oil exports. If crude oil prices remain high or stabilize at levels favorable to Iraq, this could improve the country's foreign exchange reserves and potentially allow for a revaluation of the dinar. However, the volatility of oil prices remains a source of uncertainty.
Foreign exchange reserves and monetary policy: To carry out a revaluation, the Central Bank of Iraq would need to have sufficient foreign currency reserves. Monetary authorities would also have to carefully manage monetary policy, adjusting interest rates and taking measures to control inflation.
Internal and external confidence: The confidence of investors and the population in the stability of the Iraqi dinar is also crucial. If Iraq can improve its economic environment and demonstrate a commitment to economic reforms, revaluation could be more feasible.
International conditions: External factors, such as the relationship with international institutions such as the International Monetary Fund (IMF) and other countries, could influence the decision to revalue the currency. Financial support or reforms recommended by international organizations can be key to generating the stability necessary for revaluation.
Although there are signs that Iraq has been considering various economic reforms, including eliminating zeros from its currency, revaluation in 2025 is uncertain due to the internal and external challenges the country continues to face.
GOVERNMENT ADVISOR: WE HAVE A LARGE FINANCIAL SURPLUS ENOUGH FOR IRAQ TO COVER TWO YEARS OF IMPORTS
Mohammed Al-Najjar, the Prime Minister’s Advisor for Investment Affairs, confirmed that the Central Bank has a large financial surplus sufficient for Iraq to cover two years of imports.
Al-Najjar said in the program “Under Two Lines,” broadcast on Al-Iraqiya News, followed by the Iraqi News Agency (INA), that “the US administration is dealing positively with Iraq, contrary to what is being circulated in the media,” noting that “there is a moderate discourse from the United States because the energy market cannot bear it.”
He added, “The Central Bank has a large financial surplus sufficient for Iraq to cover two years of imports,” stressing that “there are mechanisms that the Central Bank is working with the US Federal Reserve to structure.”
He pointed out that “the government is currently implementing the banking reforms agreed upon between Washington and Baghdad,” explaining that “everyone is trying to protect Iraq because it is not in their interest for Iraq to be exposed to any crisis.”
He continued, “The cost of reconstruction and bridges in the country does not exceed 12 trillion dinars.”
What's the reason why we don't have the new exchange rate for the new currency Iraq to give purchasing power to the Iraqi citizens? What's the reason why?
Why don't we have it? Is it because the weather is too hot? Is it because we have an alignment of stars?
Is it because the leadership in Iraq,
Sudani, he's just a bad man? What is the reason why we don't have the monetary reform with a respectable exchange rate that the world wants? Iran...security.
Do we have security with Iran? No...[but] the security and stability of the Middle East is spreading.
Iraq prepares for worst-case scenarios after Iranian gas cut
Shafaq News/ Iraq has developed contingency plans to address potential energy shortages following the halt of Iranian gas supplies, including sourcing imports from Qatar, Oman, and Turkmenistan, a senior electricity ministry official said on Thursday.
"Previously, we only had imports from Iran, but there are government directives and a political will to rely on multiple sources of imports," said Saad Jassem, director general of the ministry’s fuel department, told AFP.
"We must consider the worst-case scenario -- if there is an interruption, we have prepared alternatives," said Jassem, revealing that Qatar, as the region’s largest producer of natural gas, had expressed willingness to supply Iraq with gas at preferential prices following multiple visits by Iraqi officials.
He noted that negotiations are ongoing to purchase gas from Turkmenistan, which would be delivered via pipelines through Iran.
Iraq is also constructing two floating liquefied natural gas (LNG) terminals in the southern port of Khor al-Zubair, with plans to have them operational by June, Jassim said.
These facilities, according to him, will have the capacity to process between 14 and 19 million cubic meters (500-700 million cubic feet) of gas per day,
"If we manage to set up a third unit we could hit 800 to 900 million cubic feet," he added.
In 2024, Iraq and Iran renewed their gas import agreement for five years, allowing for the purchase of up to 50 million cubic meters per day.