Overview
- U.S. officials, in reports Wednesday, blocked a roughly $500 million cash flight to Iraq’s central bank, marking the second delayed shipment since the Iran war flared in late February.
- Parts of U.S.–Iraq security cooperation are on hold, including some training, counterterrorism funding, intelligence sharing, and routine joint security meetings.
- Washington ties the cash freeze to attacks by Iran-aligned militias on U.S. sites in Iraq and on regional states, and Iraqi sources say the U.S. wants arrests of those behind recent strikes.
- Iraq’s central bank confirms physical dollar deliveries have stopped while electronic dollar transfers for imports continue, and the loss of cash strains retail currency needs for travel, medical care, and study abroad.
- Since 2003, Iraq’s oil sales have flowed through a Federal Reserve account in New York that supplies Baghdad with hard currency, giving Washington leverage over an economy built on oil dollars as Iraq’s parties remain deadlocked over naming a prime minister.