Trump halts dollar cash shipments to Iraq amid Iran pressure

The United States resumed some air shipments of U.S. dollars to Iraq after a monthslong pause, restoring a physical cash channel that Iraqi sources said usually carried about $450 million to $500 million per flight. The bills are used mainly for travel, medical treatment and overseas study, making the restart important for households and businesses that rely on cash access.

The suspension had been a pressure tool. Trump administration officials halted the physical shipments as part of a campaign to push Baghdad to distance itself from Iran and crack down on Iran-aligned militias that hold seats in parliament and posts in government. Those armed groups had carried out repeated drone and rocket attacks on U.S. facilities and neighboring states, and the United States responded with strikes on militia positions inside Iraq.

The cash itself moved through a system built after the 2003 U.S.-led invasion. Iraq’s oil revenues were converted into dollar shipments routed through the Federal Reserve Bank of New York and on to the Central Bank of Iraq. Electronic dollar transfers for imports and trade were not affected, but the pause in physical shipments left a gap in the retail cash market that ordinary Iraqis felt first.

Iraqi officials said Washington never issued a formal notice of a halt, even though a shipment expected in April did not arrive and the status of another expected in May was unclear. The first report of the suspension came in April 2026, and the restart followed that stretch of uncertainty. In Baghdad, officials and advisers had warned that a wider disruption could deepen pressure on the dinar and add strain to an economy already struggling with fragile confidence.

The resumption points to a narrower recalibration than a full retreat. Washington kept the dollar channel open for commerce and consumer needs, while preserving leverage over Iraqi leaders who have to balance ties with both Washington and Tehran. For Prime Minister Mohammed Shia al-Sudani, the return of cash shipments eases immediate market pressure, but it does not end the fight over how far Iraq should go in curbing Iranian influence on its soil.