IMF ready to begin fund access talks with Iraq (26/09/05)

The managing director of the International Monetary Fund has said that it is ready to begin talks to enable Iraq to gain access to fund credit.

Iraq to gain access to fund credit

However, Iraq will need to fulfil certain conditions in return, Rodrigo Rato said after holding talks with Iraqi Finance Minister Ali Allawi. The IMF last year approved a 'post-conflict programme' for Iraq worth $436 million. That programme expires at the end of the year, with Iraqi authorities having made clear their desire for a 'stand-by arrangement' to gain access to millions more in IMF funds if needed.

In a statement issued by the Fund, Rato said that they were "working with the Iraqi authorities to move toward a standby arrangement when the post-conflict programme ends.

"I expect a staff mission will start negotiating a standby arrangement, which could be brought to the IMF's executive board for approval by the end of the year if recent progress with reform is maintained," he added.

Rato also laid out three requirements that Iraq will have to meet in return for IMF credit, stressing the need to reduce its generous oil subsidies, improve its economic data and attempt to shed more light on the resources given to its central bank.

The main aims of the IMF are backed by the US, which is very much aware of the economic stability required by Iraq in order to enable the country to prosper.

Source: AFX

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