Overview
- U.S. cargo flights have returned to flying pallets of U.S. banknotes into Iraq after a roughly nine-day operational suspension, and Iraqi officials confirmed the first post-pause deliveries reached Baghdad in early May.
- The pause affected only physical cash shipments and not electronic dollar transfers used for trade and large imports, so cross-border trade flows continued during the interruption.
- Reports estimate the freeze held back about $450 million to $500 million of Iraq’s own reserves that are stored at the Federal Reserve Bank of New York and flown back when Baghdad needs paper dollars.
- U.S. officials used the suspension as a lever to press Iraq over the influence of Iran-backed militias, and Washington has kept security cooperation programs with Iraq frozen despite the resumption of cash flights.
- The restored deliveries ease shortages for everyday needs such as travel, medical bills and overseas tuition in Iraq’s cash-heavy economy and could calm currency pressure, though longer-term ties between the two governments remain strained.