THE US HAS STOPPED SENDING CASH DOLLARS TO IRAQ. IS THIS THE BEGINNING OF A BLOCKADE?
Private sources confirmed that the United States has decided to completely halt cash dollar shipments to Iraq, a move described as potentially the beginning of a “financial blockade” on some Iraqi banks involved in currency smuggling and money laundering.
(The operative word is “completely” not just to some banks. This will force getting off the sole peg to the US dollar. Do you see the strategy Iraq is playing out here? They desperately need to get off this peg and to a “basket” of currencies the IMF already has lined up to use.)
According to a source who spoke to Al-Mustaqilla on condition of anonymity, Washington’s decision does not pertain to Iraq as a country, but rather targets specific banks suspected of involvement in suspicious dollar transfers to countries subject to international sanctions. This has angered the US Treasury, prompting it to tighten controls on dollar movement within the Iraqi market.
Sudden drop in exchange rate after the decision
Remarkably, the US decision coincided with a significant decline in the dollar exchange rate in the Iraqi market. Experts interpreted this as a natural consequence of the restrictions on the circulation of cash and the prevention of its smuggling abroad. This led to an increase in supply in the local market and a temporary decline in its price.
The source indicated that this step represents a major shift in cash liquidity management in Iraq , making it difficult for suspicious entities to continue smuggling or manipulating the currency market.
(The US has blocked dollars before but this time to EVERY bank in Iraq and Iraq as a whole. I look at this as the final nail in the coffin for the parallel market. We should see the Iraq dinar rise to very close to 1100 very soon. We would like to see a target of 1000. Do you know why? )
