US Tightens Iraq’s Dollar Flow To Counter Smuggling To Iran

Washington has imposed new restrictions on dollar transfers to Iraq as the Arab country’s banking officials believe there is widespread money laundering sending funds to Iran and Syria.

The Associated Press reported Thursday that the move was triggered a couple of months ago to stamp out what Iraqi officials describe as rampant money laundering that benefits Tehran and Damascus which are under US sanctions.

Iraq is now feeling the result, with an unprecedented drop in the value of its currency and public anger blowing back against the prime minister.

The exchange rate for the Iraqi dinar has jumped to around 1,680 to the dollar at street exchanges, compared to the official rate of 1,460 dinars to the dollar.

Hundreds of people once again demonstrated near the central bank headquarters in Baghdad on Wednesday to protest the devaluation of the Iraqi dinar against the dollar, which has triggered a rise in prices of imported consumer goods.

An informed source last week told Iran International that representatives from the Iraqi government are scheduled to go to US this month to discuss US monitoring and restrictions on dollar wire transfers by Iraqi banks that have reduced the supply of the greenback in the country.

People from different Iraqi regions waved Iraqi flags or carried banners demanding government intervention to stop the dinar's decline to around 1,620 to the greenback from 1,470 in November. “Stop the neighbors stealing our dollars,” one banner read, alluding to Iran.