US resumes dollar cash shipments to Iraq

BAGHDAD, Iraq (MNTV) — The United States has resumed shipments of US dollar cash to Iraq after suspending transfers for several months, Iraqi government officials confirmed, in a move expected to ease pressure on the country’s foreign currency supply.

Prime Minister’s spokesperson Haider al-Aboudi and financial adviser Mudhar Salih confirmed that US dollar transfers had restarted, according to a report by The New York Times.

The resumption follows reports that Washington sent two shipments of US currency to Baghdad in mid-June during the visit of US Special Presidential Envoy Tom Barrack.

The transfers had been suspended for several months as part of broader US pressure on Iraq to place all weapons under state control and curb the influence of Iran-backed armed groups operating in the country.

Iraq depends heavily on access to US dollars because its oil export revenues, which account for roughly 90% of government income, are processed through the Federal Reserve Bank of New York. This arrangement gives Washington significant influence over Iraq’s access to foreign currency.

The suspension reduced the availability of US cash in Iraq’s economy, which relies extensively on dollars to finance imports of food, energy and other essential goods. 

Although international payments for imports continued, the interruption contributed to tighter liquidity and increased economic pressure.

US officials have also expressed concerns that Iran has used Iraq’s financial system to circumvent international sanctions, a factor that contributed to the suspension of dollar shipments.

In April, US State Department spokesperson Tommy Pigott said Iraq’s failure to prevent attacks by armed factions and what Washington viewed as political, financial and operational support for those groups had strained relations between the two countries.