The Prime Minister’s economic advisor, Mazhar Mohammed Salih, revealed on Thursday details of the use of the “emergency reserve” in the 2023 three-year budget, as stipulated in Law No. 13 of 2023.
Saleh told Al Furat News: “The emergency reserve allocations amount to 500 billion dinars, in accordance with Article 6 of the General Budget Law, which grants the Prime Minister and the Minister of Finance the authority to use these amounts to cover emergency expenses if there is an urgent need for spending and there are no allocations for this need, up to 3 billion dinars for each case.”
He pointed out that “any amount exceeding 3 billion dinars requires the approval of the Council of Ministers based on a proposal from the Minister of Finance.”
Saleh also confirmed that the Federal Board of Financial Supervision will submit a quarterly report to the House of Representatives on the uses of the “emergency reserve.”
Regarding the use of this reserve, Saleh explained that “there is no direct connection between it and the completion of ongoing projects, except in extreme emergencies that may relate to the country’s security or economic stability, or any other matters deemed necessary by the executive authority.”
The Prime Minister's financial advisor, Mazhar Mohammed Salih, confirmed on Wednesday that foreign reserves are at their highest historical levels, helping to achieve economic balance and stability for the country. He also indicated that reserves still cover more than 100% of the currency in circulation.
Salehsaid in a press statement: “The slight decline in the Central Bank’sreserves, estimated at 1% of the country’s total foreign reserves, islinked to two factors: First, the increased level of foreign currencyreinforcements provided by the Iraqi banking system to itscorrespondents abroad for the purposes of financing trade and externaltransfers, which led to a significantdecline in the dollar exchange rate against the dinar in the parallelmarket and an increase in the value of the dinar in that parallelmarket.”
Heexplained that "control over domestic liquidity levels has become high, significant, and influential in light of the increasing external valueof the dinar, which continues to indicate a decline in the effectivenessof the parallel or secondary market in the country. There hasalso been a very clear decline in growth rates in the general pricelevel and a very high level of price stability, unlike anything thecountry has ever witnessed before."
Headded, "The other issue depends on the degree of growth in the amountsin which the public finances exchange monthly oil revenues in foreign
currency for the dinar for the benefit of total spending (which is thebasis of foreign reserves) and converting them into Iraqi dinars," noting that "this is also linked to the degree of discipline and controlof public expenditures on the one hand, and thus the slowdown in theliquidation of government foreign currency proceeds into domesticliquidity that can be spent on the other hand through the generalbudget."
Hepointed out that "taking into account the risks of fluctuations inaverage export oil prices of about $70 or less per barrel in energymarkets, which occurred in recent months, this means that thecompatibility between the level of replenishment of foreign reserves (through collecting them through cash issuance), which may have becomeslower and less rapid on the part of public finance, and externaltransfers in foreign currency for the benefit of financing privatesector trade on the part of the monetary authority, which is still at arelatively high pace, is what caused this deficiency or slight declinein foreign reserves."
Salehcontinued, "Foreign reserves remain at their highest historical levels, achieving economic balance and stability for the country. The functionof foreign reserves remains to defend price stability. However, it isalso wise for the Central Bank of Iraq to closely monitor the movementsof the current account of the balance of payments to maintain thestability of foreign reserves and monitor their growth safely."
Hestressed that "these foreign reserves still cover more than 100% of thecurrency in circulation and enjoy a high commercial efficiency of morethan 15 months of imports, compared to the global standard of threemonths." He added that "the monetary authority is the only competententity responsible for managing the country's monetary policy at thedomestic and external levels, with a high degree of consensus in termsof balance and transparency to achieve and maintain economic stability."LINK
Starting April 1st, Iraq officially activates the TIR system (Transports Internationaux Routiers), a UN-backed global customs framework that links the country to international trade and transport routes.
The National Investment Commission (NIC) has signed the Task Order for Phase One of developing the Al-Tayeb Specialised Economic Service Zone in Maysan Province, positioning it as Iraq's first integrated economic city.
Key Developments:
NIC Chairman Dr. Haider Mohammed Makiyah stated that Al-Tayeb Economic City will attract global investors across agriculture, industry, tourism, housing, and entertainment sectors, serving as a model for future multi-service economic cities in other provinces.
The contract, signed with U.S. firm KBR, includes strategic economic studies, investment opportunity packaging, and sectoral planning for the area.
The project aims to:
Establish a major economic hub linked to the Development Road project.
Boost Iraq's economy and provide local employment in Maysan.
Strengthen interagency coordination for smooth project execution.
The meeting was attended by the Governor of Maysan, members of Executive Order Committee 24771, the Maysan Investment Commission, and representatives from the Prime Minister's Office. Discussions focused on ensuring timely implementation, promoting sustainable development, and creating attractive investment opportunities in Iraq.