Did US Dollar Restrictions in Iraq Affect Tehran?

An exchange shop in central Baghdad (AP)
An exchange shop in central Baghdad (AP)
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Did US Dollar Restrictions in Iraq Affect Tehran?

An exchange shop in central Baghdad (AP)
An exchange shop in central Baghdad (AP)

A senior Iraqi government financial official said that the aim of the US restrictions imposed on selling dollars to banks and merchants is purely political and chiefly aims to curb the smuggling of hard currencies abroad, especially to Iran.

The New York Federal Reserve had introduced tighter controls on international dollar transactions by commercial Iraqi banks in November.

The move was designed to stop the illegal siphoning of dollars to Iran and apply more pressure along with US sanctions imposed over Tehran's nuclear program and other disputes, leaving Tehran struggling to source dollars.

“The restrictions imposed by Washington, which reduced dollar sales from $250 million to about $55 million per day, isolated financial interests that are active in the shadow of the factions and currency smugglers,” explained the official, who spoke under conditions of anonymity.

“This, however, does not mean that Iran has been greatly affected by the current situation,” they added.

“Tehran still manages its financial transactions formally with Iraqi banks,” noted the official, adding that Iran is trying to mitigate the damages sustained by some Shiite groups after they lost access to dollars due to US restrictions.

“Leaders of influential parties in Iraq believe that US restrictions were motivated by a plan to overthrow the Coordination Framework government, but Washington itself took internal measures to address the US public debt, in preparation for an expected economic recession.”

According to data leaked from Coordination Framework figures, Tehran is currently exerting pressure to help its friends affected by the dollar restrictions, but it is not very interested in opposing the restrictions themselves.

“Shiite party leaders have contacted circles in Tehran to convince them that the dollar crisis in Iraq targets Iranian national security,” a former government official revealed.

Hard currencies smuggled from Iraq often go to Iran-affiliated parties in Syria, Yemen, and Lebanon.

Observers believe that Iraqi Prime Minister Mohammad Shia al-Sudani’s decision to replace Mustafa Ghaleb Mukheef with Ali Mohsen Al-Alaq as Central Bank Governor will help those affected by the restrictions somewhat recover in the market.

Alaq enjoys close relations with former prime minister and head of the State of Law Coalition Nouri al-Maliki.



European Leaders on Possibly Sending Peacekeepers into Ukraine

 Ukrainian servicemen of the 211th Pontoon Bridge Brigade of the Armed Forces of Ukraine put up barbed wire as part of a system of new fortification, amid Russia's attack on Ukraine, in Kharkiv region, Ukraine February 14, 2025. (Reuters)
Ukrainian servicemen of the 211th Pontoon Bridge Brigade of the Armed Forces of Ukraine put up barbed wire as part of a system of new fortification, amid Russia's attack on Ukraine, in Kharkiv region, Ukraine February 14, 2025. (Reuters)
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European Leaders on Possibly Sending Peacekeepers into Ukraine

 Ukrainian servicemen of the 211th Pontoon Bridge Brigade of the Armed Forces of Ukraine put up barbed wire as part of a system of new fortification, amid Russia's attack on Ukraine, in Kharkiv region, Ukraine February 14, 2025. (Reuters)
Ukrainian servicemen of the 211th Pontoon Bridge Brigade of the Armed Forces of Ukraine put up barbed wire as part of a system of new fortification, amid Russia's attack on Ukraine, in Kharkiv region, Ukraine February 14, 2025. (Reuters)

European leaders were holding an emergency meeting in Paris on Monday to discuss their role in Ukraine's future after the United States announced it would sit down with Russia to seek an end to the three-year war.

Here is what some have said ahead of the meeting on the issue of sending peacekeeping troops into Ukraine:

BRITAIN

British Prime Minister Keir Starmer has said he is ready to send British troops to Ukraine as part of any postwar peacekeeping force.

"We're facing a generational challenge when it comes to national security," Starmer told reporters.

"I think there's a bigger piece here as well, which is that this isn't just about the front line in Ukraine. It's the front line of Europe and of the United Kingdom. It's about our national security and I think that we need to do more."

SPAIN

"It is too early at this time to speak about deploying troops to Ukraine as there is no peace at the moment," Foreign Minister Jose Manuel Albares told reporters.

Albares also told radio station Onda Cero: "A war of aggression cannot be rewarded, we cannot encourage others to launch wars of aggression.

"Today I'm convinced Putin will keep attacking and bombing Ukraine. So I do not see peace on the horizon at the moment."

GERMANY

Asked if German troops could be deployed in a future peace mission in Ukraine, Chancellor Olaf Scholz stressed the importance of a strong Ukrainian army.

"This will be a great task for Europe, for the US and international alliance partners," Scholz said. Future questions on security architecture would be addressed in due course, he said.

On the issue of European ground troops, a defense ministry spokesperson said: "If the framework is given, Germany will not shy away."

POLAND

"Poland will support Ukraine as it has done so far: organizationally, in accordance with our financial capabilities, in terms of humanitarian and military aid," Prime Minister Donald Tusk told reporters before boarding a plane to Paris.

"We do not plan to send Polish soldiers to the territory of Ukraine. We will ... give logistical and political support to the countries that will possibly want to provide such guarantees in the future, such physical guarantees."

SWEDEN

"There needs to be a very clear mandate for those forces and I don't think we can see that until we have come further in those negotiations," Prime Minister Ulf Kristersson told Reuters. "But Sweden, we are normally a part of strengthening security in our part of the world, so I foresee us to be a part of that this time as well."

DENMARK

Ahead of the Paris meeting, Denmark's Prime Minister Mette Frederiksen said: "We need to increase military support to Ukraine, we need to produce more, and we need to do it faster.

"And then we must remove the restrictions on the Ukrainians' use of weapons, so that they can actually defend themselves against the Russians without having one arm twisted around their back. A ceasefire must not lead to Russian rearmament, which is replaced by new Russian attacks."

THE NETHERLANDS

"We understand Europe needs to play a role. It is logical that the Netherlands is considered," Dutch Prime Minister Dick Schoof told reporters at the Munich Security Conference.

"There needs to be a strong mandate, because the Netherlands won't join any initiative whatsoever if there is not a clear mandate. (..) There also needs to be an escalation mechanism, in which the US needs to be prepared to be stand-by to act."