Washington has fully resumed physical dollar deliveries after a suspension that began in April, with Baghdad pledging to curb flows reaching Iran-linked armed groups through Iraq’s financial system.
The U.S. has fully resumed physical dollar shipments to Iraq after a months-long suspension that began in April, ending a standoff over concerns that cash was being diverted to Iran-linked armed groups. Roughly $500 million in planned deliveries had been blocked during the halt, while electronic transfers for trade reportedly continued, making the pressure campaign targeted rather than a full cutoff. Partial shipments restarted in mid-June during a visit by U.S. envoy Tom Barrack, and Iraqi officials said on July 2 that deliveries had fully resumed. The arrangement rests on Iraqi commitments to limit dollar flows through informal exchange networks and complicit financial institutions, though no public details have been given on caps, monitoring or enforcement. Physical dollar shipments help stabilize the Iraqi dinar, support imports and keep public salaries flowing, underscoring how the U.S. Treasury and the Federal Reserve Bank of New York retain significant leverage over Iraq’s financial stability.