US resumes physical dollar cash flows to Iraq

Baghdad (IraqiNews.com) – Sources connected to the government in Iraq revealed on Wednesday that the United States sent two shipments of US cash to Baghdad during the visit of the US Special Presidential Envoy to Iraq, Tom Barrack.

The move intends to preserve the value of the Iraqi dinar, enhance import operations, and support the wages of state employees, which had lately been jeopardized due to the difficulties facing the country’s oil exports, according to The New Arab.

The step follows a months-long pause in dollar shipments as part of US pressure on Baghdad to put all weapons under state control and disarm Iran-backed armed groups operating in Iraq.

Since Iraq’s oil earnings, which account for about 90 percent of the federal budget, are routed via the Federal Reserve Bank of New York, the pause in US dollar flows targets Iraq’s economic structure, providing Washington effective control over the country’s access to foreign currency.

By limiting cash flows, the US tightens influence over liquidity in an economy that relies largely on foreign currency to pay for food, energy, and other necessities. While import transactions continue, the disruption in US dollar shipments worsens financial stress and public unrest.

The shipments ceased in the past few months amid allegations that Iran had used the Iraqi banking system to dodge sanctions.

The cessation resulted in a decline in the Iraqi currency’s value in the parallel market, as well as issues in the private sector, including import operations.

In April, US State Department spokesperson Tommy Pigott warned that the Iraqi government’s failure to prevent faction-based assaults, as well as its provision of political, financial, and operational cover for them, was harming US-Iraq relations.

Barrack and Iraqi Prime Minister Ali al-Zaidi reviewed on Tuesday efforts to guarantee that all weapons stay under state administration and that armed groups operating outside government control are eventually decommissioned or absorbed into national institutions.