Iraq resumes cash dollar shipments... but experts downplay their impact on the market!

[RJG]

Iraq resumes cash dollar shipments... but experts downplay their impact on the market!

7/8/2026

 

Baghdad/Ahmed Kawkab

The Prime Minister's financial advisor, Mazhar Muhammad Salih, confirmed on Tuesday that Iraq has resumed receiving shipments of US dollars in cash, with each shipment amounting to approximately $500 million. He explained that the regularity of these shipments strengthens the stability of the parallel market, affirms Baghdad's commitment to international compliance standards, and contributes to narrowing the gap with the official exchange rate, following a period of anxiety that accompanied regional developments. However, some experts believe that these shipments do not significantly impact the exchange rate, and that their previous suspension was more related to air transport issues than to any financial or political disputes.
Salih told Al-Mada newspaper, "These cash dollar shipments do not represent new funds, but rather are drawn from the Central Bank of Iraq's reserves deposited with the Federal Reserve Bank of New York, and are allocated to cover travelers' needs." He added, "The percentage of cash dollars does not exceed about 10% of total foreign transfers, and each shipment amounts to approximately $500 million, which is sufficient to meet normal demand."
He explained that “the regularity of these shipments is linked to Iraq’s full commitment to international compliance standards,” noting that “the Central Bank of Iraq is among the most cooperative institutions with the US Federal Reserve and the US Treasury Department in matters related to combating money laundering and terrorist financing.” He denied the validity of rumors about violations or exceptional restrictions imposed on Iraq.
Saleh revealed that “transporting cash dollars to Iraq is one of the most complex logistical operations, as it is carried out via private aircraft and under strict security and safety measures.” He explained that “these operations are executed according to precise arrangements that ensure the safety of the shipments until they reach the Central Bank.”
He pointed out that “the continued arrival of cash dollar shipments sends a positive signal to the parallel market and dispels rumors that disrupt exchange rates.” He considered that “increasing the level of certainty among traders gradually leads to a narrowing of the gap between the official rate of 1,320 dinars per dollar and the parallel market rate, because the sustainability of compliance and the regularity of shipments are among the most important factors for the stability of the exchange market in Iraq.”
Saleh explained that “the dollar, despite being part of Iraq’s reserves, remains subject to US monetary policy and laws as it is the currency of another country.” He clarified that “the United States stipulates that its currency not be used in a manner that contradicts its foreign policy or national security, which requires countries dealing in dollars to adhere to international compliance standards.”
He added that “the decline in demand for cash dollars during the past period coincided with the security conditions in the region, as questions were raised in the United States about the continued need for shipments given the decline in travel, before supply operations returned to normal as Iraq continued to comply with international regulations.”
Saleh pointed out that “the purchase of cash dollars by travelers is currently subject to a comprehensive monitoring system through the FTR platform, which tracks international financial transfers and transactions. The data of each beneficiary is recorded accurately, including personal information and fingerprints, to prevent duplicate purchases or misuse of cash dollars.” He explained that “each traveler receives $3,000 per month for each trip through Iraqi airports.”
He added that “electronic financial transfers are already subject to strict international oversight through global banking systems, but cash dollars require additional procedures due to the sensitivity of their circulation.” He explained that this “led to the adoption of advanced tracking systems that give Iraq a positive image before international institutions concerned with combating money laundering and the financing of terrorism.”
Saleh believes that “the development of economic relations between Baghdad and Washington, especially the Prime Minister’s upcoming visit to the United States, will positively impact the level of trust between the two sides and contribute to the stability of financial transactions.” He considers that “an improved financial climate directly impacts the stability of the local market.”
In a related context, specialists believe that linking these shipments to exchange rate fluctuations, or interpreting their suspension as a crisis with the United States, is not based on realistic data, but rather is related to air transport conditions and the security developments witnessed in the region.
Economic expert Duraid al-Anzi told Al-Mada that "the cash dollars shipped from the United States have no bearing on the Iraqi market, neither influencing the dollar's price nor its daily transactions. They do not enter the local market directly or indirectly because the incoming funds remain within the state's financial cycle and do not act as a tool to influence supply and demand within the markets."
He pointed out that "the claims made recently about a problem between Baghdad and Washington due to the halt in shipments were not supported by any official indicators," expressing surprise at "the talk of a crisis without any statement or position from either the US or Iraq confirming its existence." He considered the "suspension of civilian air traffic in the region during the war to be the natural reason behind the delay in the arrival of the shipments."
Al-Anzi added that "the resumption of dollar shipments coincided with the end of military operations and the resumption of air traffic," asking, "Were there any new meetings, understandings, secret communications, or political pressures? We haven't heard of anything of the sort." He concluded that "interpreting the resumption of shipments as a result of a political breakthrough with the United States is an inaccurate reading of reality."
He explained that “the funds arriving in Iraq are part of its oil revenues and reserves deposited with the US Federal Reserve, and are transferred according to financial mechanisms that have been in place for years.” He clarified that “the shipping process is subject to continuous auditing and monitoring procedures and does not represent a new or exceptional financial resource.”
Al-Anzi believes that “the recent increases in the dollar exchange rate are due to increased demand from entities seeking to smuggle funds, which has created an artificial supply and demand crisis within the parallel market.” He emphasized that “this crisis is fabricated and is not related to the suspension of cash dollar shipments,” noting that “regional tensions, including talk of closing the Strait of Hormuz, were not sufficient on their own to cause these jumps in the exchange rate.”
He pointed out that “discussions about the value of the shipments should be understood within the context of government needs, and that the funds are transported by private planes in periodic installments as requested, with the cost of transportation being one million dollars, while transportation and insurance operations are subject to precise financial and logistical procedures.” He affirmed that “there is no fundamental change in the mechanism for supplying Iraq with dollars.”
He added that “the incoming funds are deposited into the accounts of the Central Bank and the government, and are included in the general budget,” while simultaneously warning that “a portion of these funds was previously subject to smuggling or misuse, which prompted the financial authorities to tighten control and tracking procedures.” He considered that “confronting this phenomenon represents the real challenge, not the regularity of dollar shipments themselves.”
Al-Anzi explained that “the stability of the Iraqi market will not be achieved simply by the arrival of dollar shipments, but rather requires addressing the internal imbalances that fuel the parallel market, tightening control over the movement of funds, and combating corruption and smuggling networks.” He emphasized that “cash dollars are more closely linked to the budget and its allocations than to the activity of the local market, and that what happened during the past period was essentially a result of the suspension of civil aviation, not a result of political or financial disputes with the United States.”

https://almadapaper.net/442545/