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Mississippi Gal

? about Iraq loans & the RV

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I am a little confused on one issue. In several post I have read the RV will happen when this or that item is addressed. Then when it doesn't someone moves on to another item on the list and says it will happen when this is completed. Well, in several of these post I have read where the hold up is that they are trying to pay down their debt. So that when they do RV it won't cost them as much. I understand that reasoning. However, that makes me have two questions: 1st: If that is true why are they continuing to borrow money? (Like with China for the electricity) 2nd: With all the money they are suppose to make post RV, why does it matter if they have their debts paid down? Just wondering?

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Iraq's current debt is only about $60 billion.

Government Debt

Government Debt

Total government debt is estimated to be $60.05 billion in 2010. This represents 72% of GDP and is comprised of the following components:

External debt ($45.09 billion)

Domestic t-bills ($5.55 billion)

Bank debt ($9.41 billion)

External Debt

Following the ouster of the regime in spring 2003, Iraq’s external debt was estimated to be between $130-$140 billion. Reducing this debt to a sustainable level has been a priority since 2003 and debt relief negotiations have taken place in a variety of forums. This has led to the cancelation of a significant amount of Iraq’s external debt.

Iraq’s external debt is comprised of four components:

Paris Club bilateral debt ($42.5 billion)

Non-Paris Club bilateral debt ($67.4 billion)

Commercial debt ($20 billion)

Multilateral debt ($0.5 billion)

Debt relief negotiations first led to an 80% reduction of the Paris Club debt. The Paris Club agreement also set the terms for non-Paris Club and commercial debt cancelation levels. A provision of the Paris Club agreement is that Iraq cannot accept a debt cancellation agreement with other creditors on more favorable terms for Iraq than those reached with the Paris Club.

Thus, Iraq is expected to receive no more than an 80% cancelation from all of its creditors. Negotiations with non-Paris Club creditors are ongoing (mainly with Gulf countries except the UAE), and resolution of the commercial debt is largely complete.

External debt is estimated to be at $45.09 billion in 2010 (see government debt above).

Government Bonds (part of external debt)

Security Name IRAQ 5.8 01/15/28

Announce Date 04.01.2006

Issue Date 19.01.2006

Maturity 15.01.2028

ISIN Code XS0240295575

Redemption Value 100

Par Amount 1000

Amount Issued $2,700,000,000

Country Full Name Iraq

Coupon (%) 5.8

Coupon Frequency 2

Currency USD

Iraq Government Debt

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Paying down debt is always good in general for the value of a country's currency.

But I don't see how it was an intentional act, for the purpose of firming things up for an RV, if they are now asking for additional loans from China.

What am I missing?

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