Iraq receives a new shipment of U.S. dollars to strengthen its foreign currency reserves

Iraq has received a new shipment of U.S. dollars, under an understanding with Washington, to strengthen the country’s foreign currency reserves, as the Reuters agency reports, citing an Iraqi government spokesman.

The system dates back to 2003: after the U.S. invasion and the fall of Saddam Hussein’s regime, Iraq’s oil revenues were placed in a special account in the U.S. and then transferred to Baghdad — a mechanism that gave Washington oversight over the flow of financial resources into Iraq.

In April, President Trump halted cash shipments from this account, allowing only electronic dollars; some reports linked the halt to U.S. pressure on pro-Iranian militias in Iraq.

Local media have reported that Iraq’s central bank faced dollar shortages and difficulties in supplying commercial banks, creating inflationary risks.

In July, the Trump administration began releasing some cash transfers again, but accused Iraq of dollar-smuggling operations towards Iran — an accusation Baghdad has rejected. The new shipment marks a temporary easing in this sensitive file.