Iraqi officials have approached the International Monetary Fund to secure financial assistance due to the conflict in the Middle East, a source close to the IMF said on Thursday.
Initial conversations took place last month during the spring meetings of the IMF and World Bank in Washington, and discussions are ongoing about how much funding Iraq would need and how any loan would be structured, the source said.
The war that began on February 28 between the US, Israel, and Iran, triggered Tehran’s closure of the Strait of Hormuz, has rocked the entire Middle East, wreaking damage on infrastructure and economies.
Iraq has been hard hit by the war, with most of its oil exports, which represent nearly all government income, cut off by the closure of the critical waterway, which previously carried about one-fifth of the world’s crude oil.
No comment was immediately available from the IMF or the Iraqi embassy.
Iraq has the world’s fifth-largest petroleum reserves, and the economy is closely tied to oil exports.
Iraq’s last financial deal with the IMF was a $3.8 billion standby arrangement that expired in July 2019, of which $1.49 billion was drawn, according to the IMF’s website.
Iraq owes the global lender $2.39 billion, including some $891 million provided under a rapid financing instrument, according to the website.