US Dollar Shipments to Iraq Resume After Temporary Halt, Advisor Says

ERBIL (Kurdistan 24) - Dollar shipments from the United States to Iraq have resumed after a temporary halt, with the first transfer arriving in Baghdad, according to an economic advisor to the Iraqi prime minister.

On Friday, Mazhar Mohammed, economic advisor to the Iraqi prime minister, told Kurdistan 24 that the first batch of U.S. dollars had been delivered from New York following the resumption of air traffic and relative stabilization of the regional security situation.

He said the cash shipment arrived via aircraft, marking the restart of a key financial channel used to supply Iraq’s domestic market with U.S. currency.

According to Mohammed, the physical cash shipments account for only about 5% of total dollar flows into Iraq, while approximately 95% of U.S. dollars are held within the Central Bank of Iraq and used to meet market demand through financial mechanisms.

He added that the United States transfers Iraq’s oil revenues on a monthly basis in two installments, totaling around $1 billion, which are deposited into accounts linked to the Iraqi government.

Iraq maintains two accounts at the U.S. Federal Reserve, known as Iraq1 and Iraq2. The first is used by the Central Bank of Iraq for currency reserves, while the second is designated for oil revenues.

The resumption follows a period in which U.S. dollar shipments to Iraq were temporarily halted, largely due to heightened regional tensions and security risks linked to the ongoing conflict involving Iran, the United States, and Israel.

During that period, disruptions to air travel and logistical concerns delayed physical cash deliveries, contributing to fluctuations in Iraq’s currency market and increased pressure on the Iraqi dinar.

In parallel, Washington had also tightened oversight of dollar transactions flowing into Iraq as part of broader efforts to prevent illicit financial transfers and limit access by Iran-backed networks. These measures included stricter compliance requirements on Iraqi banks and closer monitoring of dollar auctions conducted by the Central Bank of Iraq.

The combination of security concerns and financial controls had effectively slowed the flow of physical dollars into the country, even as electronic transfers and reserves remained available.

The arrival of the first shipment signals a return to more stable financial operations between Washington and Baghdad, as authorities work to normalize currency flows and maintain stability in Iraq’s monetary system.