CBI: Iraq’s foreign reserves fall 0.52% in Q3

Shafaq News/ Iraq’s foreign currency reserves declined in the third quarter of 2024, with the Central Bank of Iraq (CBI) attributing the drop to monetary tightening measures and lower oil prices.

According to a CBI report, Iraq’s foreign currency reserves fell by 0.52%, reaching 143.35 trillion dinars ($109.64 billion), compared to 144.10 trillion dinars ($110.21 billion) in the same period of 2023.

The bank attributed the decline to its policy of liquidity absorption through sterilization operations, a measure used by central banks to regulate the money supply by adjusting foreign reserves. As a result, cash receipts increased from 18.46 trillion dinars ($14.1 billion) to 20.09 trillion dinars ($15.37 billion), reducing net foreign reserves.

Another contributing factor, according to the report, was a drop in oil prices, which fell from $82.2 per barrel to $77.3 per barrel during the same period, impacting Iraq’s foreign exchange earnings.

The CBI noted that higher public spending increased the amount of currency in circulation from 100.06 trillion dinars ($76.5 billion) to 104.13 trillion dinars ($79.64 billion), contributing to a rise in public debt.

Despite the decline, the CBI emphasized that reserves remain above critical thresholds, in line with global financial standards, which recommend that foreign reserves cover at least 20% of the broad money supply. It further stated that monetary policies will continue to focus on “maintaining financial stability.”