TNT:
Tishwash: Oil revenues: Washington freezes $500 million in financial aid to Iraq
US officials revealed on Wednesday that the United States has blocked the transfer of approximately $500 million in Iraqi oil revenues to Baghdad, citing the failure of efforts to dismantle pro-Iranian factions.
The Wall Street Journal quoted the US State Department as confirming that Washington expects Iraq to take concrete steps to dismantle these groups, stressing that Baghdad’s “failure” to prevent attacks targeting US interests and its allies in the region casts a negative shadow on bilateral relations between the two countries. link
Tishwash: Wall Street Journal: Washington freezes $500 million of Iraqi funds
The Wall Street Journal revealed on Wednesday that the United States has halted the transfer of $500 million destined for Iraq, along with freezing a number of security cooperation programs with Baghdad, in a move aimed at increasing pressure on Iranian-backed groups.
The newspaper quoted informed sources as saying that the US Treasury Department had frozen the transfer of about $500 million from Iraq’s accounts at the Federal Reserve Bank of New York, funds resulting from the sale of Iraqi oil.
She explained that this shipment is the second that Washington has suspended since the start of its military operation against Iran, as part of escalating economic and security measures.
She also noted that US authorities have suspended funding for a number of training programs for Iraqi military forces and counter-terrorism units, in a move that reflects a trend to restrict security cooperation between the two countries.
According to the report, these measures are part of US efforts to pressure Baghdad and reduce its level of relations with Tehran, in light of escalating regional tensions.
The newspaper noted that Iraqi oil revenues have been deposited in accounts at the Federal Reserve Bank of New York since 2003, while the United States had previously temporarily suspended cash transfers to Iraq in 2015, due to concerns that some of those funds might reach ISIS. link
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Tishwash: An official at the Central Bank of Iraq comments on Washington’s suspension of cash shipments to Baghdad.
Reuters reported on Wednesday, citing an official at the Central Bank of Iraq, that no notification had been issued by Washington to halt any cash shipments to the country.
The Iraqi official said that “a shipment that was expected to arrive in April has not yet arrived, and the status of another shipment that was expected to arrive in May is unclear.”
A source in the Iraqi Foreign Ministry said that “Washington warned Baghdad through diplomatic channels that it will no longer tolerate the government’s failure to rein in the pro-Iranian militias, which have representation in parliament and the government.”
The warning noted “attacks attributed to Iraqi factions against American targets, including repeated strikes on the U.S. Embassy in Baghdad and the U.S. Consulate in Iraqi Kurdistan, as well as missile and drone attacks on Saudi Arabia, the United Arab Emirates, Bahrain, Kuwait, Jordan and Syria.”
The Wall Street Journal revealed earlier on Wednesday that the administration of US President Donald Trump has suspended dollar shipments to Iraq and frozen funding for security cooperation programs with the government.
The newspaper quoted officials as saying that the US Treasury Department recently blocked the transfer of an air shipment of about $500 million in banknotes,proceeds from Iraqi oil sales, from Federal Reserve Bank accounts in New York to Iraq, due to US concerns about “Iraqi factions.” link
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Tishwash: Parliamentary Finance Committee: The proposal to borrow from the Central Bank is linked to the formation of the government!
The parliamentary finance committee expressed its position on Wednesday regarding the proposal to borrow from the central bank to finance domestic expenditures, noting that this issue is linked to the formation of the next government.
Committee member Ribwar Karim told Al-Mada that “the proposal to borrow from the Central Bank to finance internal expenditures is contingent on the formation of the government.”
He added that “there is a conviction among the political parties and blocs that there are serious attempts to appoint the next prime minister as soon as possible,” explaining that “if the government is formed, there will be no need to borrow, as a fully empowered government will begin its duties.”
He explained that “borrowing from the Central Bank is merely an opinion put forward by some members of parliament,” noting that “this proposal is mainly linked to the formation of the government, and if that happens, there will be no need for this proposal.”
In a related context, economic expert Sadiq Al-Azraki warned against expanding the policy of domestic borrowing, in light of regional turmoil and its impact on oil supply chains, and the pressures that may accompany this on the general budget.
Al-Azraki said that “these developments reinforce fears of a move towards forced austerity and the government resorting to maximizing internal borrowing to secure operational expenses, especially the salaries of employees and retirees, at the expense of investment expenses,” indicating that “the government was resorting to this approach even before the current crises.”
He explained that “the danger of domestic borrowing lies in the fact that it does not generate an economic return, as it is done for consumption purposes and not to finance productive projects or infrastructure capable of paying off the debt in the future,” noting that “the ratio of domestic public debt to GDP has begun to approach critical levels, exceeding 38% in some estimates during the years 2024 and 2025.”
He pointed out that the government relies heavily on withdrawing liquidity from government banks and the central bank by discounting treasury transfers, which “turns banks from tools for financing development into treasuries for the state’s deficit,” and causes “liquidity depletion and creates a permanent crisis in circulating cash.”
He explained that “most of the oil revenues are consumed in the salaries item, and any decline in oil prices or disruption in exports puts the treasury in front of a direct deficit,” adding that “loans are not free, but rather entail increasing annual interest that is deducted from the budgets of future years, which is what specialists describe as a financial black hole.”
He pointed out that “domestic borrowing also puts pressure on the private sector, as it drains liquidity from banks and limits the ability to finance projects, leading to economic stagnation and rising unemployment,” warning that “any expansion of monetary financing without productive cover may be reflected in prices and purchasing power.”
Despite this, Al-Azraki pointed out that “the Central Bank has good foreign reserves estimated at about $108 billion, capable of covering imports for up to 12 months,” but he warned that “the danger lies in borrowing turning from an emergency tool into a permanent practice.”
He explained that the continued high dependence on oil makes the economy vulnerable to shocks, noting that “every month of export disruption could cost Iraq between $7 and $8 billion in revenue.”
He concluded by saying that “domestic borrowing may remain a helpful tool in times of crisis, but it does not address the root causes of the problem unless it is coupled with economic reforms, diversification of income sources, and reducing dependence on oil,” stressing that “salary stability in the short term is possible, but the real challenge lies in long-term financial sustainability.” link
Tishwash: Kujer: Salaries are temporarily secured, and Iraq faces austerity or printing money.
Former MP Jamal Kojar confirmed that salaries are temporarily secured, while indicating that Iraq may resort to austerity measures or printing currency in the next phase.
During his appearance on the program “On the Ruler” broadcast by Al-Furat satellite channel, Kujer said: “The dollar issue in Iraq is linked to two aspects: technical, administrative, and political.” He explained that “the currently influential aspect is the cessation of dollar shipments due to the war conditions and the disruption of air traffic, and not because of a problem with the US Federal Reserve,” noting that “no official US announcement has been issued to stop the transfer of shipments.”
He added that “the effects of the drop in oil prices will appear after three months, but the cash reserve is still better compared to previous periods,” stressing “conviction in the government’s ability to secure salaries during the next six months, given that oil revenues are received three months after the sale, with options including printing money despite the risks of inflation.”
He pointed out that “the United States is waging a solitary conflict that may have repercussions on the global economy,” indicating that “the rise in fuel prices in the American markets reflects the magnitude of the effects,” and suggesting that “it will be a limited military confrontation.”
Kujer said that “Iraq may be forced to adopt an austerity policy or resort to printing money, which requires a fully empowered government to manage the phase,” criticizing the three-year budget, describing it as “a backbreaker after it turned the planned deficit into an actual deficit that exceeded $133 billion.”
He predicted that “oil prices will continue to rise even if the war stops,” noting that “the 2026 budget may be presented in the form of a law with the possibility of adding a supplementary budget, or resorting to legislation similar to the food security law to cover emergency expenses and secure salaries.”
Regarding the National Service Law, Kujer noted that “the law is unlikely to be passed at the present time due to the lack of political consensus and clarity in its features, despite the importance of introducing it in the long term.” link
