Iraq revives $2b bond plan, may seek IMF aid

Dubai: Iraq, struggling with low oil prices and a war with Daesh (the self-proclaimed Islamic State of Iraq and the Levant) militants, may raise $2 billion (Dh7.34 billion) in Eurobonds this year, and probably will ask the International Monetary Fund (IMF) for more aid.

The second-biggest oil producer in the Organisation of Petroleum Exporting Countries (Opec) may tap international bond markets in the second half of 2016, Finance Minister Hoshyar Zebari said in a telephone interview on Monday. A planned sale was halted last year because investors demanded yields that the government deemed too high.

The debt auction “is on the agenda,” he said. “We are in a better position this year to issue than last year, when interest rates were too high.”

Iraq raised oil output last year by 20 per cent to make up for lost revenue after crude prices plummeted. The government, which has forced Daesh militants from some key cities and has pledged to attack the group’s Iraq stronghold of Mosul, has agreed to an IMF staff-monitored programme that may eventually pave the way for more aid from the Washington-based lender.

The IMF provided $1.25 billion in emergency assistance to Iraq last year to plug the country’s budget deficit.

Authorities and the fund will hold more talks, and Iraq will “likely consider” asking for more assistance, Zebari said. It was too early to decide on the size of the possible loan, he said.