Iraq central bank moves to reintegrate seven banks into US dollar system

The Central Bank of Iraq (CBI) has reached an agreement with the U.S. Treasury Department to allow seven restricted Iraqi banks to re‑enter the U.S. dollar correspondent‑banking network, provided they meet new compliance and governance standards. The banks, all privately owned, include Al Janoob Islamic Bank, which is linked to Prime Minister Ali Al‑Zaidi. Iraq’s banking minister said the talks resulted in “a mutual understanding to reinstate restricted Iraqi banks to non‑U.S. dollar correspondent banking channels.”

Iraqi economists cautioned that the step will have little immediate impact on the dinar or the broader economy unless it is coupled with comprehensive sector reforms. The U.S. Treasury later clarified that the banks have not yet regained access to foreign‑currency transactions.

In parallel, CBI Governor Nizar Nasser Hussein met with directors of exchange companies to launch initiatives aimed at expanding non‑bank financial services, reducing cash reliance, and strengthening digital payment systems. Hussein emphasized the need for higher compliance standards and greater public trust in the sector’s digital transformation.