US halts Iraq dollar cash shipment after militia strikes, sources say

Source: Yahoo! News/Reuters

Wed, April 22, 2026 at 8:32 AM EDT


BAGHDAD/DUBAI April 21 (Reuters) - The United States has halted a shipment of about $500 million in cash bound for Iraq and suspended parts of its security cooperation with Baghdad, in ‌a move aimed at pressuring the Iraqi government over the actions of Iran-backed militias, Iraqi sources told Reuters.

The measures ‌were taken as the fallout from the Iran war increasingly pulls Iraq into the conflict, with Iran-aligned armed groups in Iraq launching repeated drone and rocket attacks on ​U.S. facilities and neighbouring states in support of Tehran. The conflict has also been accompanied by U.S. strikes on armed groups in Iraq, adding pressure on Prime Minister Mohammed Shia al-Sudani's government as it tries to balance tensions between Washington and Tehran on Iraqi soil.

Five Iraqi sources said the move was limited to shipments of physical U.S. currency, between $450 million and $500 million, that are periodically flown into Baghdad.

The cash is mainly ‌used to meet retail foreign exchange demand, ⁠including for travel, medical treatment and overseas study, while electronic dollar transfers used for imports and trade remain unaffected, an economic adviser to Sudani said. The U.S. Treasury Department and the Federal Reserve did not ⁠immediately respond to a request for comment. The move was first reported by the Wall Street journal.

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