The war forced the Iraqi government to adopt a number of methods to secure spending, including domestic and foreign borrowing and withdrawal from foreign reserves in the central bank as a cover for the dinar, causing a decline from $ 71 billion in 2013 to below $ 50 billion by 2017.
“Foreign reserves grew by 7 percent in 2017 and are distributed across eight countries,” the central bank said in a statement. He pointed out that «the annual reports data showed the growth of foreign reserves by 7 percent last year compared to 2016». It also showed “growth in dollar portfolios of 38 percent as a result of investing in the dollar in bonds, treasury bills and deposits.”
“The investment portfolio in gold also increased by 15 per cent in 2017, which caused its value to be equal to 2016. The value of the bank’s investment in Islamic sukuk has increased by 50 per cent,” he said. “The reserve department takes into account the importance of the geographic distribution of investments,” he said. “These reserves are distributed to eight countries, including the United States, Switzerland, France and Britain.”
The governor of the Central Bank of Iraq Ali Alalak, announced in the last month of last year, «reserves in hard currency of $ 48 billion». A source for Al-Hayat said it would withdraw about 14 trillion dinars ($ 12 billion) in one year, specifically in 2015, yet reserves of $ 51 billion would remain as a cover for the currency.
The source said that foreign reserves are not in a single currency as some believe, as the volume of foreign exchange accounts for 91 percent of the total and what remains is a gold worth 1.1 trillion dinars, and balances in foreign banks and special drawing rights.
Al-Alaq confirmed to Al-Hayat that the Central Bank has adopted a diversification approach in managing its foreign reserves and in accordance with the criteria of guarantee, liquidity and profitability to enhance monetary stability and achieve its objectives through the proper management of these reserves and adherence to the specific criteria for investment and diversification.
Foreign reserves in the bank include a basket of foreign currencies and bonds with foreign banks. The dollar contributed 61 percent of the total, followed by the euro by 26.6 percent and the British pound by 12 percent.
Source: Rawabet Center