US clears seven Iraqi banks for dollar transactions

Shafaq News- Washington/ Baghdad

Seven Iraqi banks have been cleared to resume correspondent banking relationships in foreign currencies, after meeting compliance and governance requirements, which Prime Minister Ali Al-Zaidi on Saturday hailed as “an important step” in Iraq’s banking reform program.

Al-Zaidi said the agreement between the Central Bank of Iraq and the US Treasury Department would “strengthen confidence” in Iraqi lenders, attract investment, and support economic growth.

We welcome the understanding reached between the Central Bank of Iraq and the U.S. Department of the Treasury, which marks an important step toward advancing banking sector reform and strengthening its integration into the global financial system.The qualification of seven…

— علي فالح الزيدي (@AliFalihAlzaidy) July 18, 2026

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The step will renew US dollar transactions after US authorities had restricted Iraqi lenders for years over compliance concerns. According to the Eco Iraq economic observatory, 35 of Iraq’s 72 operating banks had lost access to US dollar transactions by August 2025. The affected institutions included Al-Janoob Islamic Bank, one of the country’s largest private lenders, previously chaired by Al-Zaidi before becoming prime minister.

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