US Resumes Dollar Transfers to Iraq After Suspension
Washington has restarted direct dollar transfers to Iraq, according to a New York Times report cited by Reuters.
The United States has resumed dollar transfers to Iraq, according to a New York Times report flagged by Reuters, signaling a potential easing of financial pressure on a country whose economy remains deeply dependent on oil revenues denominated in American currency. The move marks a notable shift after a period in which Washington had restricted Baghdad's access to dollar liquidity as part of broader efforts to curb currency smuggling and limit Iran's ability to circumvent US sanctions through Iraqi financial channels.
Iraq occupies a uniquely complicated position in US foreign policy: it is simultaneously a close American security partner and a country with deep economic and political ties to Iran. For years, Washington has used dollar access — Iraq holds much of its oil revenue in a Federal Reserve account in New York — as a form of quiet financial leverage, periodically tightening or loosening the flow depending on Baghdad's compliance with anti-money-laundering and sanctions-enforcement expectations.
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The resumption of transfers, if confirmed at scale, would offer Iraq's central bank relief as it works to stabilize the Iraqi dinar and manage inflation pressures that have built partly in response to dollar scarcity. Black-market exchange rates had diverged sharply from official rates during periods of restricted access, squeezing ordinary Iraqis and businesses reliant on imports priced in dollars.
Analysts will be watching whether this development reflects a durable recalibration of US-Iraq financial relations or a tactical pause in pressure designed to shore up Baghdad diplomatically at a sensitive moment in the broader Middle East. The underlying tension — how to keep Iraq economically functional without inadvertently funding Iranian-linked networks — has never been fully resolved and is unlikely to disappear with a single policy adjustment.
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