AMMAN, JORDAN - Iraq has reached a $5.4 billion standby agreement (SBA) with the International Monetary Fund that could unlock $15 billion more in international assistance over the next three years, Finance Minister Hoshiyar Zebari said on Thursday.
The loan will have an annual interest rate of 1.5 percent, Iraq's central bank governor Ali al-Alak said at a press conference following a week of talks with the IMF in neighboring Jordan. He did not state the loan's tenure.
The IMF deal will allow Iraq to secure additional financial aid of around $15 billion over the next three years, including in the form of international bonds, according to Zebari.
He said the deal was conditional on reducing Iraq's budget deficit and other unspecified measures. Iraq, a major OPEC exporter, is planning to lower its oil price forecast, widening its current fiscal deficit of 24 trillion dinars ($21 billion) by several billion dollars.
Christian Josz, the head of the IMF's Iraq mission, told reporters the agreement was an important first step that would give confidence to other donors to extend more financing.
The agreement still needs the approval of the IMF board which meets in June.