Baghdad: The United States has restarted limited deliveries of physical US dollar cash to Iraq after temporarily halting the transfers earlier this year, according to media reports citing government sources. The move is expected to ease pressure on Iraq's financial system and improve the availability of foreign currency in the local market.
The shipments had been paused as Washington increased pressure on Baghdad to strengthen control over armed groups operating outside government authority and tighten oversight of financial transactions. US officials were also concerned that Iraq's banking system could be used to bypass sanctions targeting Iran-backed networks.
Reports indicate that two shipments of US currency recently reached Baghdad during the visit of US Special Presidential Envoy Tom Barrack. The funds are intended to help stabilize the Iraqi dinar, support imports, and ensure the government can continue meeting salary obligations for public employees.
Iraq depends heavily on oil revenue, with most of its earnings passing through the Federal Reserve Bank of New York before being transferred to the country. Because of this arrangement, Washington has significant influence over Iraq's access to US dollar cash.
Although electronic financial transfers for trade continued during the suspension, the shortage of physical dollars contributed to pressure on Iraq's currency and affected business activities that rely on cash transactions. The latest shipments are expected to improve liquidity, though US authorities are expected to continue closely monitoring Iraq's financial system.
The development reflects ongoing cooperation between Washington and Baghdad while highlighting the continued role of financial oversight in US-Iraq relations.
