Iraq, US agree to resume dollar cash shipments

BAGHDAD

AA Photo

Iraq and the United States agreed on Sept. 27 to resume commercial shipments of physical U.S. dollars to Baghdad following months of restrictions designed to halt currency smuggling to sanctioned entities.

The agreement followed high-level negotiations between Central Bank of Iraq officials and the U.S. Treasury Department in Washington.

U.S. authorities curbed regular cash transfers in April over concerns regarding illicit financial networks funneling greenbacks into Iran and regional armed factions.

Iraqi banking officials agreed to implement stricter compliance standards and expand electronic transaction monitoring across commercial lenders.

The Central Bank of Iraq said the restored cash flow will stabilize the local currency market and satisfy domestic demand for foreign currency.

The temporary halt drove up the exchange rate on Baghdad's parallel market, creating price pressures on imported goods.

Under the renewed arrangement, independent auditors will track foreign exchange allocations to verify transactions avoid blacklisted groups.

Iraq relies on scheduled dollar deliveries from its oil revenue accounts held at the Federal Reserve Bank of New York to maintain financial liquidity.