Iraq to prohibt cash withdrawals, transactions in US dollar currency

Iraq is set to implement a ban on cash withdrawals and transactions in US dollars starting on January 1, 2024.

This move is aimed at curbing the misuse of Iraq's hard currency reserves in financial crimes as well as preventing the evasion of US sanctions on Iran, a senior official at the Iraqi central bank told Reuters.

The objective of this measure is to eliminate the illicit use of approximately 50% of the $10 billion that Iraq imports in cash from the New York Federal Reserve each year.

Additionally, it is part of a broader effort to reduce the reliance on the US dollar in the country's economy, where the currency has been preferred over local currency due to the impact of recurring wars and crises since the 2003 US invasion.

People who deposit dollars into banks before the end of 2023 will still be able to withdraw funds in dollars in 2024. However, any dollars deposited in 2024 can only be withdrawn in the local currency at the official exchange rate.