Iraqi government to give bonds instead cash to unpaid contractors

15/04/2016

Iraqi government contractors will receive bonds instead of cash as payment. To get rid of delayed payments to contractors, Iraqi government has taken such decision, as stated by central bank.
The bonds can be traded in the local market or cashed at banks for a discount, the central bank said in an emailed statement. It didn't indicate a maturity or interest rate.

Central Bank of Iraq also added that these bonds can be used as loan guarantees.

It further stated, "The financial crisis cell headed by the prime minister agreed to the central bank's proposal to issue government bonds to pay the dues of contractors and suppliers ... hereby contributing to solving the problem of due payments."
The government is struggling to meet payments as a costly war on Islamic State insurgents in the north and west drains a budget that is already strained by lower oil prices.

The Central Bank announced last month its first bond sale to the public since 2003 in an attempt to plug the budget deficit.

Last Update:: 15/04/2016

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