Iraq’s expensive war with the militant group Islamic State in Iraq and Syria (Isis) and the collapse in international oil prices have put the country’s finances under increased strain over recent months.

In September, Iraq’s central bank governor said the country’s foreign reserves have been reduced to about $60bn, down from $66bn at the end of 2014, and $78bn at the end of 2013.

Its current $60bn is enough to cover about 18 months-worth of the country’s imports.

With the oil prices expected to stay low in the medium-term and continuing fierce resistance from Isis in the north and west of the country, Iraq’s reserves are expected to continue to shrink.

The government has forecast a fiscal deficit of $25bn this year and a draft version of the 2016 budget expects a deficit of $25.8bn.

To help close its budget deficit, Baghdad plans to issue international bonds, denominated in dollars, which it hopes will ultimately raise as much as $6bn.

It will be the first time in nine years that Iraq will have issued international bonds. In 2006 it issued bonds when the US helped it to restructure debts that were run-up during Saddam Hussein’s regime.

The government also plans to issue domestic bonds worth $5bn, which is expected to start in the final quarter of 2015.