PM Adviser: Iraq’s Foreign Reserves Estimated at $79.2 Billion for 2026
Mazhar Mohammed Salih says Iraq’s foreign reserves remain at a relatively comfortable level but warns that continued declines require closer monitoring.
ERBIL (Kurdistan24) - Iraq’s foreign currency reserves remain at a relatively comfortable level, despite a decline recorded this year, Mazhar Mohammed Salih, financial adviser to the Iraqi prime minister Ali Al-Zaidi, said on Saturday.
Salih told the Iraqi News Agency that the International Monetary Fund, based on its 2025 estimates, projected Iraq’s total reserves for 2026 at approximately $79.2 billion, equivalent to around 9.6 months of imports of goods and services. He said Iraq’s current foreign reserves are approaching that level.
According to the prime minister’s financial adviser, reserves covering more than six months of imports represent a relatively stable level based on reserve adequacy standards.
He said the decline in reserves recorded this year requires greater caution and monitoring, not because reserves have reached a dangerous level, but because the continuation of the downward trend could eventually narrow the country’s financial safety margin.
Salih said foreign reserves play a central role in supporting the stability of the Iraqi dinar’s exchange rate and serve as a primary line of defense against pressures on the currency.
He explained that this is achieved through the Central Bank of Iraq’s ability to provide dollars and meet legitimate demand for the currency, contributing to monetary stability and broader economic growth.
The adviser also highlighted Iraq’s reliance on oil revenues as one of the most prominent sources of risk. Any decline in oil revenues, he said, would reduce government income and foreign currency reserves, potentially increasing pressure on reserves and exchange-rate stability.
Salih stressed the importance of preserving the monetary policy independence of the Central Bank of Iraq.
He called for foreign reserves and monetary assets not to be used continuously to cover budget shortfalls, warning that doing so could deplete reserves and increase inflationary and monetary pressures.
The Iraqi official said a sustainable solution lies in controlling government spending, particularly public expenditure, while developing non-oil revenues.
He also pointed to the use of monetary policy tools to manage liquidity and preserve monetary stability.