What does it mean for Iraq to raise its balance from buying US Treasury bonds?


political| 11:39 – 24/08/2021

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Baghdad – Mawazine News

The US Treasury Department stated that Iraq raised its holdings of US bonds to 2.21 billion dollars during the month of June, bringing the total to more than 21 billion dollars, after it was nearly 17 billion dollars in December of last year 2020.
The Prime Minister’s Adviser for Financial and Economic Affairs, Mazhar Muhammad Salih, said, “Raising Iraq’s balance of buying US Treasury bonds by 23.98% to reach $21.187 billion is something expected, especially since Iraq is within the dollar region because of the nature of oil exports and their pricing in dollars, in addition to that the largest Commercial transactions in Iraq are within the dollar area, whether in Asia or in the regional environment, with 80 to 85% of Iraq’s foreign transactions in dollars,” noting that “Iraq’s possession of the dollar is normal, noting that the US dollar constitutes about two-thirds of the official reserves of countries, and there are about 60% Of the global loans granted in dollars, about 84% of global trade is repaid in dollars.
He stressed that “the dollar has global dominance as well as dominance over Iraq’s banking payments, and because Iraq is a dollar area, it always keeps bonds because other transactions may cause losses, so the proportion of reserves in the dollar is kept in the external centralization with the United States until it is invested as a predominant investment – that is Short term – from three months to six months, and it can be transferred during this period without losses and returns for managing these bonds.
The government advisor added, “The process of investing and managing reserves in Iraq and in foreign currency is either by placing them within a fixed deposit that has interest or current accounts, if there is a withdrawal or part of it, by diversifying it, such as investing American bonds and their returns.” He explained that American bonds are classified as (A3). ) meaning that it does not accept loss and is 100% guaranteed, and this is universally recognized and many oil countries deal with it.” Ended 29/A43

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