INTERVIEW-Iraq budget outlook firms on oil's rise -CBI head
Saturday August 22, 2009 02:35:22 AM GMT
IRAQ-BUDGET/ALSHABIBI (INTERVIEW, TV)
JACKSON HOLE, Wyo., Aug 22 (Reuters) - The Iraqi budget outlook appears more stable given the recent rise in oil prices above $70 a barrel, the governor of the Central Bank of Iraq said on Saturday.
"Because of the dependence of Iraq's economy on the oil sector, it is very important that oil prices are back to a respectable level," Sinan Al-Shabibi told Reuters Television.
Iraqi has slashed its 2009 budget three times this year due to falling oil prices. They topped out around $150 just over a year ago, slumped below $40 this year, then rallied above $70.
"The situation now is not how much resources you have for the budget but the implementation side," Al-Shabibi said on the sidelines of a gathering of central bankers, analysts and academics from around the world organized by the Federal Reserve Bank of Kansas City.
Asked whether interest rates, which the central bank cut to 7 percent from 9 percent in June, could be cut further, he pointed to the bank's recent success in reining in inflation.
The rates outlook "depends on development and inflation and we are happy to say we controlled inflation or lowered the core inflation ... and this is actually what drives the interest rate," Al-Shabibi said.
Iraq's most recent inflation figures show a rate of 7.9 percent in July, down from about 12 percent in 2008, and more than twice that previously.
Al-Shabibi said Iraq was in discussions with the IMF and was hoping for more talks at the Oct. 6-7 annual meeting of the International Monetary Fund and the World Bank in Istanbul.
"We had a lot of discussion on the IMF and we are more likely to go for another program ... we will have another go in Istanbul," Al-Shabibi said.
"We need IMF lending and we need development lending," he said. (Reporting by Dan Burns and Kristina Cooke; Editing by James Dalgleish)http://www.forexyard.com/en/reuters_...I-INTERVIEW-TV