GENEVA, Nov 12 (Reuters) - Iraq plans to issue domestic currency debt for the first time since the fall of Saddam Hussein, giving the country a new monetary policy tool, its central bank chief told Reuters on the sidelines of a conference in Geneva on Tuesday.
'We expect that the first issuance will be in the value of 3 billion Iraqi dinars ($2.58 million),' said Abdul-Basit Turki Saeed, speaking through an interpreter.
'This is the first time after Saddam Hussein, and this is the first time that they are being issued for monetary policy and not for financing.'
Former dictator Saddam was toppled a decade ago in a U.S. led-invasion.
Turki said he expected a good reaction to the move, with more issuance to follow and total issuance to depend on demand.
The bonds will have a maturity of more than five years, and the central bank hopes the first tranche will be issued before the end of the year, although the decision will be taken jointly with the Finance Ministry.
The interest on the bonds should be below the central bank's policy rate of 6 percent, he said.
Iraq's inflation was running at 2 percent, he said, describing it as a rare and very good number.
There were no plans to raise external debt, he said, although that was possible in the future if there were ambitious development plans that needed funding.
($1 = 1165.0000 Iraqi dinars)
(Reporting by Tom Miles; Editing by Hugh Lawson) Keywords: IRAQ BONDS
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