Iraq reaches understanding with the U.S. on resuming cash dollar shipments

Iraq’s government has reached an understanding with the United States on resuming shipments of U.S. cash dollars to the country, government spokesman Haider al-Aboudi announced on Saturday. A new shipment is expected to arrive in the coming days, he said.

In a statement to the Iraqi News Agency (INA), as reported by Al Jazeera, Al-Aboudi said the dollars would serve “to meet legitimate needs for foreign currency”. The understanding, he added, was reached “in light of the progress Iraq has made in strengthening the oversight system for dollar distribution and regulating its use”, as well as curbing misuse of foreign currency.

The U.S. had suspended cash dollar shipments to Iraq in April, with reports linking the decision to pressure on Iran-backed militias in Iraq; some physical shipments resumed in July. Since the fall of Saddam Hussein after the 2003 U.S. invasion, Iraq’s oil revenues have been deposited in a special account in the U.S., with the money then transferred to Baghdad — a system that gives Washington broad oversight of dollar flows.

Iraq holds two dollar accounts at the Federal Reserve Bank of New York: one where oil export revenues are deposited and another, the Central Bank of Iraq’s foreign reserves account.