Baghdad steps up its involvement in dedollarization

By Rhod Mackenzie

Last week, the Finance Committee of the Iraqi Parliament called for an end to the sale of Iraqi oil in dollars in response to US sanctions against Iraqi banks.

According to Oil Price, the committee stated that the US Treasury is using money laundering as a pretext for imposing sanctions against Iraqi banks and that these actions are illegal. The committee urged the Iraqi government to take action to stop these illegal actions. The imposition of sanctions on Iraqi banks weakens and impedes the efforts of the Central Bank of Iraq to stabilize the dollar exchange rate and reduce the difference between the official and parallel rates.

A statement from the Parliamentary Committee on Finance emphasizes that US actions have a negative impact on the well-being of Iraqis. Lawmakers have urged the government and the Central Bank of Iraq to take immediate measures to reduce the country's reliance on the US dollar. This can be achieved by diversifying foreign exchange reserves and selling Iraqi oil for currencies other than the dollar.
Last week, the US imposed sanctions on Al-Huda Bank, accusing it of money laundering for Iran. Similarly, last year, Washington imposed sanctions on several other Iraqi banks for the same reason.

A senior official at the US Treasury recently stated that they are relying on Baghdad's assistance in combating pro-Iranian groups. The parliamentary committee's statement aligns with this. The US Treasury Department has demanded that Baghdad cease funding pro-Iranian groups in Iraq.

Iraq's financial system is significantly controlled by Washington. US sanctions are making it difficult for Baghdad to pay its large electricity debt to neighbouring Iran. Additionally, the Iraqi government's revenues from oil sales are being transferred to the Federal Reserve Bank of New York for some reason. Iraqi authorities are requesting that Washington be granted access to these funds.

As reported by the Iraqi News Agency (INA), the Iraqi government supports de-dollarization and plans measures to strengthen the Iraqi dinar against the dollar. It is worth noting that the Iraqi government has prohibited the use of dollars by individuals, companies, and organizations.
“It is evident that the United States has economic control over Iraq,” stated Hussein Muanes, an Iraqi parliament member and member of the Finance Committee, in an interview with the online magazine Cradle. “Our government lacks control and access to our finances... We believe that breaking the dominance of the dollar is crucial, particularly now that it is being used as a tool for imposing sanctions... The moment has arrived to utilise our national currency.”