* Oil repayments among measures approved by the government
* IMF to meet end-June to give final approval for loans
* IMF agreement to unlock $5.4 billion in loans over 3 years
By Maher Chmaytelli and Ahmed Rasheed
BAGHDAD, June 12 (Reuters) - Iraq has approved measuresrequested by the International Monetary Fund to unlock loansthat should help the country overcome a cash crunch caused bydeclining oil revenue, a senior government official said.
The agreement, reached last month between Iraq and the IMF,"is on track", Mudher Salih, an adviser on financial policy toPrime Minister Haider al-Abadi, told Reuters late on Sunday.
Among the measures approved are settling by the end of theyear all arrears owed to foreign oil companies operating inIraq, Salih said. He did not say how much was owed.
The OPEC nation sought budget support from the internationalcommunity after a collapse in oil prices over the past twoyears. The drop in revenue that resulted caused the publicdeficit to widen and delayed payments to foreign oil producers.
The IMF in May agreed to provide $5.4 billion over threeyears. But the funds are conditional on Iraq's implementingmeasures to cut spending, increasing non-oil revenue andsettling several billion dollars in arrears to oil companies.
The Iraqi government approved the measures at a meetinglast week and informed the IMF, Salih said in an interview.
Baghdad expects the IMF board to approve by the end of Juneor early July the disbursement of a first tranche of about $600million, he added.
The reforms include a tax increase, higher electricity feesand better banking supervision to fight corruption and moneylaundering, Salih said. It also calls for streamliningstate-owned companies and auditing the bloated public payroll topurge so-called "ghost employees" who don't show up to work, hesaid.
The crash in global oil prices since 2014 came as Iraqneeded more resources to fight Islamic State, the ultra-hardlinegroup that seized vast tracts of the north and west, displacingabout four million people.
A recent increase in oil prices, to $50 a barrel from below$30 earlier this year, will not delay the reforms, Salih said.
The agreement with the IMF should unlock a total of $18billion in international assistance over three years, FinanceMinister Hoshiyar Zebari has said. He cited the World Bank andthe Group of Seven leading industrialized nations among thedonors, along with the IMF.
Zebari said Iraq expects to sell $2 billion in eurobonds inthe last quarter of this year, when international aid startscoming in, helping to lower its cost of borrowing.
Iraq last sold international debt in 2006, when it issuedabout $2.7 billion of bonds due in 2028 with a coupon of 5.8percent. (Writing by Maher Chmaytelli, editing by Larry King)
