BAGHDAD, March 28 (Reuters) – Iraq told the International Monetary Fund this month that its central bank would remain independent, after a court had ruled that the bank operated under the prime minister’s authority.
Maliki won a court battle against parliament this year over who would have ultimate control over the central bank, attracting criticism from lawmakers that the bank might lose its independence.
The government, the bank and the court itself have since insisted repeatedly that the ruling would not compromise the bank’s independence.
“The CBI (Central Bank of Iraq) will continue to be independent in the pursuit of its policy objectives,” said the March 3 memorandum, signed by Iraq’s central bank governor and finance minister; the memo was published on Monday by the IMF.
On March 18, the IMF agreed to disburse $471 million to Iraq in loans.
In the memorandum, Iraq predicted its Gross Domestic Product would grow by 12 percent in 2011 as a result of increased oil production, which accounts for about 95 percent of Iraq’s economy. It predicted exports of 2.2 million barrels per day, in line with forecasts that appeared in the 2011 budget.
The memorandum repeated budget estimates of revenue and current spending, which would leave a deficit of the equivalent of 15.7 trillion dinars ($13.4 billion).
If Iraq earns additional revenue from oil, it would increase investment in infrastructure by half of the additional amount and save the other half, the memorandum said. If it earns less revenue than forecast, it would reduce spending by half of the shortfall and increase the deficit by the other half.
In the memorandum, published on the IMF website, Iraq also said it aimed to complete a restructuring of its two largest state banks by mid-June 2011.
(Reporting by Aseel Kami, Serena Chaudhry and Peter Graff; Editing by Jan Paschal)
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