Maha el Dahan and Ahmed Rasheed
Dubai/Baghdad (Reuters) – Iraqi Central Bank will forbid five more local banks to get involved in US dollars transactions, a move that comes after meeting with US cashier officials in trying to fight money, smuggling of dollars and other violations, two sources with A direct knowledge of this was said to Reuters on Sunday.
This move comes after a meeting in Dubai last week between the Iraq Central Bank officials – who had already banned eight banks from the US transactions last year – and US Treasury and Federal Reserve officials, said one of the sources.
The rare ally of both the United States and Iran with more than $ 100 billion reserves held in the United States, Iraq relies greatly on Goodwill Washington to ensure that his approach to oil and finances of oil is not blocked.
But the second largest OPEC manufacturer may find himself at the intersection after US President Donald Trump said he would restore his “maximum pressure” policy this month.
Iran considers its neighbor and allies Iraq as an economic “lungs” and has a significant military, political and economic influence there through strong Shiite militia and political parties it supports. Also the sources of a hard currency from Iraq through exports and avoids US sanctions through its banking system.
Reuters discovered a sophisticated network of smuggling of lodging oil in December, which generates at least $ billion a year for Iran and its intermediaries, she blinked in Iraq since Prime Minister Mohammed Shia Al-Sudani has taken over his duty in 2022.
Banks are prohibited from dollars of transactions allowed to continue working and are allowed to engage in transactions in other currencies, says the Central Bank.
But this move limits banks’ ability to perform dollars transactions, interfering with most of the operations performed outside Iraq.
The current Iraqi government has come to power with the support of powerful, Iranian parties and armed groups with interests in Iraq’s very informal economy, including the financial sector that has long been seen as a hot point.
Western officials praised cooperation with Prime Minister Sudani in the implementation of economic and financial reforms that were supposed to suppress the ability of Iran and his allies to approach US dollars, but it is expected that the pressure will be cited with Trump’s administration.
Five banks are al-Mashreq al-Arabi Islamic Bank, a united Bank for investments, Al Sanam Islamic Bank, Misk Islamic Bank and Amin Iraq for Islamic Investments and Finance.
The Iraq Central Bank did not immediately respond to the commentary request.
