Iraq’s cash reserves: between actual need and US restrictions
Iraq’s cash reserves: between actual need and US restrictions
6-8-2026
Information/Report..
Experts and specialists in economic affairs warned against the continued linkage of the Iraqi financial system to the international banking system linked to the United States, stressing that this linkage may affect Iraq’s flexibility in managing its monetary reserves and the stability of the exchange market in light of the fluctuations of global financial conditions and increasing external pressures on the national economy.
In this regard, former MP Mahma Khalil confirmed in a statement to Al-Maalomah News Agency that “Iraq’s cash reserves, estimated at more than $80 billion, are facing a real problem because almost half of them are held as bonds deep within the debt-ridden American banking system,” noting that “any urgent Iraqi need to withdraw these amounts to cover the local financial deficit will be met with the complexities of restrictions and agreements imposed by the Federal Reserve.”
He added that “these sovereign assets represent the basic cover and identity of the Iraqi economy and the value of the national currency,” stressing the need to review the legal protection mechanisms for Iraqi funds to ensure their complete immunity and that they are not affected by Washington’s financial crises, away from patchwork solutions that may endanger monetary stability.
In the same context, the spokesman for the Reconstruction and Development Coalition, Firas Al-Muslawi, confirmed in a statement to Al-Maalouma Agency that “the measures of the US Federal Reserve Bank are now directly affecting the stability of the Iraqi financial system and the movement of the exchange market, which necessitates a serious review of this financial relationship.”
He added that “continued reliance on the financial system linked to the US Federal Reserve makes the Iraqi economy vulnerable to fluctuations and external pressures,” noting that “Iraq needs practical steps to strengthen its financial independence and reduce external influences on its economic decisions.”
Al-Muslawi concluded by saying, “A national vision must be developed that aims to gradually disengage from external financial policies in a way that protects the Iraqi economy and ensures its stability.”
This debate comes amid repeated political and economic calls to reassess the mechanisms for managing foreign currency reserves, in order to strengthen financial stability in Iraq and reduce its vulnerability to international pressures and fluctuations.
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