Iran Exploits Iraqi Financial System Through Complex Networks
In 2024, Iraq's currency auctions hit $81 billion, with experts warning that much of the funds are being diverted to Iran.
ERBIL (Kurdistan24) – Iran has been leveraging intricate networks within Iraq's financial system to circumvent international sanctions and secure hard currency, according to a recent report by Alhurra.
In 2024, the Central Bank of Iraq's currency auctions sold over $81 billion, a significant increase from approximately $41 billion in 2023. While these auctions are intended to finance legitimate foreign trade, experts suggest that a substantial portion of these funds is being diverted to Iran.
This complex financial network operates by routing funds through middlemen and businesses, making it difficult for authorities to track and stop. Experts suggest that a significant portion of the funds is being used to support Iranian interests in Iraq, including financial support for Iranian-backed militia groups, further strengthening Tehran's influence over Baghdad.
These activities are part of Iran's broader strategy to bypass international sanctions, which have targeted its banking sector, and to ensure its access to the U.S. dollar. The increase in currency auctions has raised concerns among international observers and sparked calls for Iraq to take stronger measures to ensure that its financial system is not being exploited to the benefit of a foreign power.
Economist Abdul Rahman al-Mashhadani, in an interview with Alhurra, emphasized that Iran's exploitation of Iraq's financial system has been a persistent issue. He noted that Iran's exports to Iraq officially totaled approximately $12 billion over the past 11 months, generating substantial dollar revenues for Tehran. However, the actual figures may be even higher, as a significant portion of the money is funneled through informal channels to bypass international scrutiny.
This issue of financial exploitation is part of the broader geopolitical struggle in the region. Since the U.S. liberation operation of Iraq in 2003, Iran has steadily increased its influence in the country, using both political and economic means. Iran's involvement in Iraq spans numerous sectors, including trade, infrastructure, and military support for various factions.
Despite calls from the international community for Iraq to reduce its dependency on Iran, the complex ties between the two countries have made it difficult for Iraq to implement meaningful reforms. The financial exploitation of Iraq’s economy serves as a significant example of how Iran uses economic leverage to maintain its influence despite international sanctions.
