As Iraq appears to be descending into all-out sectarian war, the implications for the oil-dependent economy are huge. Iraq is Opec’s second-largest crude exporter, so markets are already feeling a little jittery, sending crude oil to its highest since September on Friday. Here are five charts showing how Iraq’s economy has developed since the 2003 US-led invasion of Iraq and where its vulnerabilities lie. Read more

Iraq’s central bank governor, Sinan al-Shibibi, told Reuters rates are likely to fall below their current 7 per cent, depending on inflation. “Probably they are going to be lower than 7 percent. But of course this will depend on inflation vis-a-vis growth.” he said. “We’ll have to monitor very closely.” The central bank dropped its policy rate to 7 per cent from 9 per cent last June in line with a fall in inflation. The official interest rate in Iraq is more of a guide to bank rates than a direct monetary mechanism as the banking sector is small and capital markets are undeveloped (from Reuters). Other rates include 5.2 per cent on 6-month bills and 5 per cent on 7-day deposits.