The US has resumed shipping physical dollars to Iraq after a months-long suspension, ending a standoff that tested the fragile financial relationship between Washington and Baghdad. The deal hinges on Iraq’s commitment to curb dollar flows reaching Iran-linked armed groups, though the specifics of how that promise gets enforced remain notably vague.
What actually happened
The US suspended physical dollar shipments to Iraq in April as a pressure tactic aimed at Iran-aligned factions operating within Iraq’s borders, blocking roughly $500 million in planned deliveries.
Physical dollar shipments to Iraq stabilize the Iraqi dinar, facilitate imports, and keep public salaries flowing. Electronic money transfers for trade reportedly continued uninterrupted throughout the suspension, meaning the squeeze was targeted rather than total.
Partial shipments began in mid-June during a visit by US envoy Tom Barrack. By early July, Iraqi officials confirmed on July 2 that deliveries had fully resumed.
