The International Monetary Fund on Thursday approved a 744-million-dollar credit for Iraq just a week after the country paid off an earlier 471-million-dollar loan. "The successor arrangement is designed to support Iraq's economic program over the next 15 months through March 2009," the IMF said in a statement after announcing approval by its executive board.
"The Iraqi authorities intend to treat the arrangement as precautionary." Takatoshi Kato, the IMF's deputy managing director said Iraqi authorities "have succeeded in keeping their economic program on track in 2006-07, despite the difficult security and political situation." He said Iraq has managed to carry out a number of economic reforms and boost interest rates to curb inflation pressures.
"Although the security situation has showed signs of improvement in recent months, it remains a major obstacle for investment and reconstruction, hampering oil production and economic growth," Kato said. "Also, much remains to be done to modernise financial management of the government and the central bank, and to reform the banking system." The IMF first approved credits for Iraq in December 2005 in the wake of a US-led 2003 invasion which toppled former dictator Saddam Hussein.
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