Iraq’s foreign reserves hit $79.2 billion

Baghdad (IraqiNews.com) – The financial adviser to Prime Minister Ali al-Zaidi, Mazhar Saleh, confirmed on Sunday that Iraq’s foreign reserves remain at relatively safe levels.

The International Monetary Fund (IMF) estimated Iraq’s total reserves at approximately $79.2 billion for 2026, according to Saleh.

The reserve efficiency index considers covering more than six months’ worth of imports to be a generally safe level.

According to the Iraqi News Agency (INA), the reduction in reserves this year needs more care, not because they have reached a critical level, but because there is worry that the loss will continue and negatively impact the safety buffer in the future.

Foreign reserves play a crucial role in maintaining the stability of the Iraqi dinar’s exchange rate and protecting against pressures on the national currency. The capacity of the Central Bank of Iraq (CBI) to meet the genuine demand for US dollars is essential for ensuring economic stability and growth.

The heavy dependence on oil revenue is one of the most apparent sources of risk. A decline in oil revenues leads to lower government revenues and reduced foreign currency inflows, which further strains reserves and undermines exchange rate stability.

Saleh emphasized the need to maintain the CBI’s monetary policy independence and not to use foreign reserves to finance the budget deficit, as these measures may lead to reserve depletion and a spike in inflation.