WASHINGTON - The International Monetary Fund (IMF) has agreed to grant a $685 million (£395 million) loan for the process of rebuilding of Iraq. This loan will go towards helping the Iraqi economy recover over the next 15 months.
This is the fist ever loan that the war-torn country has been able to secure on an International level. It is also designed to encourage other countries to invest in the reconstruction effort. Commenting on the loan, IMF deputy managing director Takatoshi Kato said, "The Iraqi authorities were successful in promoting macroeconomic stability in 2005, despite the extremely difficult security environment. The medium term outlook for Iraq is favorable, but subject to many risks."
He added that the oil export price and the oil development sectors were most vulnerable at the moment. Kato said that the country's administrators had vowed to undertake massive expansion of the oil sector and improve the public services.
U.S. Treasury Secretary John Snow welcomed the loan and said that it would go a long way in reducing the debt under Saddam Hussein by $11 billion. He added that it would "underpin economic stability and help lay the foundation for an open and prosperous economy in Iraq."
Ernst & Young, the managers of the Iraqi debt reconciliation effort said that the country would now be able to exchange $14 billion for new debt. Last year, the United States had written off $4.1 billion that Iraq owed it. The Paris Club consisting of 19 countries has promised to write off 80 percent of the $38.9 billion debt owed by Iraq.
Posted
on : Mon, 26 Dec 2005 08:10 GMT | Loans News
By : Rob Davis
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