The United States has resumed dollar shipments to Iraq after a phone call between U.S. President Donald Trump and Iraqi Prime Minister-designate Ali Al-Zaydi. This decision follows a halt of a cash shipment worth $500 million less than a month ago, aimed at pressuring the Iraqi government to dismantle armed factions.
Trump confirmed in statements to reporters that the United States supports Al-Zaydi, describing his appointment as a "great victory." The Iranian Foreign Minister also welcomed Al-Zaydi's appointment, reflecting the balance of power in the region.
Details of the Event
Although the Iraqi government and the Central Bank have not announced the arrival of the new shipment, Iraqi economic expert Nabil Al-Marsoumi reported its arrival, indicating that Iraq receives about $1 billion monthly. The latest shipment is part of U.S. support related to the formation of the new government.
Dollar shipments are considered a crucial factor in stabilizing the exchange rate of the Iraqi dinar, especially with the rising demand for foreign currency. The United States typically transfers amounts ranging from $400 million to $500 million monthly to Baghdad, as part of financial arrangements linked to oil revenues.
Background & Context
Last month, the United States froze funding for security cooperation programs with the Iraqi government, increasing pressure on Baghdad. The U.S. Treasury Department blocked a cash shipment due to concerns regarding the activities of Iranian-backed armed factions.
Washington expects the Iraqi government to take immediate action to dismantle these groups, emphasizing that the government's failure to prevent attacks negatively impacts relations between the two countries. The U.S. escalation coincided with reservations about the nomination of the "Coordination Framework" forces for Nouri Al-Maliki to form the government.
Impact & Consequences
The resumption of dollar shipments may contribute to improving the economic situation in Iraq and enhance the stability of the dinar. However, U.S. pressures could exacerbate political conditions, especially with the listing of faction leaders on terrorism lists.
The new Iraqi government faces increasing challenges, requiring a balance between external pressures and domestic needs. This situation may reflect on Al-Zaydi's ability to form a stable government capable of addressing security and economic challenges.
Regional Significance
Arab countries are affected by the transformations in Iraq, as the stability of Baghdad holds strategic importance for the region. Any escalation in security conditions could impact relations between Iraq and its neighbors, particularly with the rising Iranian influence in the area.
Under these circumstances, hope remains pinned on the new government to achieve stability, which may contribute to enhancing regional security and limiting the influence of armed factions.