WASHINGTON: The United States blocked a plane carrying nearly USD500 million in banknotes from delivering the cash to Iraq, US media reported on Tuesday, piling pressure on Baghdad to fight Iran-backed militant groups.
The Wall Street Journal reported that Washington has suspended cash shipments to Iraq and frozen funding for security programmes following attacks on US interests in the country by groups showing solidarity with Iran.
Iraq has long walked a tightrope between the competing influences of its allies, neighbouring Iran and the United States.
However, Iraqi leaders have struggled to maintain that delicate balance as war engulfs the Middle East.
An Iraqi government official told AFP only one shipment has not arrived, citing “logistical reasons due to the war” and airspace closure.
An Iraqi central bank official also downplayed the issue, telling AFP that dollar shipments have ceased during the regional war “due to the suspension of flights and the security situation.”
He added that the central bank has not requested more US dollars as it has sufficient reserves and there is “no current need to boost them.”
But an Iraqi security official confirmed to AFP that the United States has suspended its security cooperation with Iraq over factions targeting US interests.
Iraq was drawn into the Middle East war with strikes targeting Iran-backed groups, which in turn have claimed attacks on US interests, mostly in Iraq but also across the Gulf states.