Bloomberg.com
March 5, 2004

Japan’s government is considering forgiving at least $3 billion of the $7 billion owed to it by Iraq, the Nikkei English News reported, without saying where it obtained the information.

The U.S. has said lenders should forgive about two-thirds of Iraq’s debt, Nikkei said. Iraq’s foreign debt totals about $120 billion.

Among members of the Paris Club, a group of creditor nations, Japan is Iraq’s largest creditor based on loan principal and interest owed, Nikkei said. Trade insurance and yen-denominated loans issued by the Japan Bank for International Cooperation accounted for about $4.1 billion of the total owed, with the remaining $2.9 billion listed as default penalties.

The Paris Club is expected to decide by year’s end how much debt each creditor should forgive, Nikkei said.