Loans begin to flow, but KRG faces uphill battle for financial security

Baghdad has begun implementing a three-month deal to enable payments for Kurdistan's civil servants, prompting political backlash.
Iraqi Prime Minister Mohammed Shia al-Sudani (left) meets with KRG President Masrour Barzani (right) in Erbil on March 14, 2023. (Photo credit: Prime Minister's Office)

SULAIMANIYA - The Kurdistan Regional Government (KRG) has begun receiving loans from Baghdad under a temporary funding deal, despite a lawsuit challenging the legality of the stop-gap financial support.

The KRG Ministry of Finance said it received 250 billion Iraqi dinars ($192 million) from the state-run Rafidain bank on Sept. 24, and another 250 billion dinars from the state-run Rashid bank on Sept. 25. A third loan transfer, of 200 billion dinars ($154 million), is expected from the Trade Bank of Iraq (TBI) this week.

Money is flowing to the KRG despite political and legal obstacles. Mustafa Jabar Sanad, an MP from Basra, recently filed a lawsuit claiming the loans are illegal, but the Federal Supreme Court (FSC) declined to issue an emergency injunction to block them, according to multiple people familiar with the case.

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