The Trump administration warned Iraq this week that it risks losing access to a critical government bank account if Baghdad kicks out American forces following the U.S. airstrike that killed a top Iranian general, according to Iraqi officials.
According to a report by the Wall Street Journal, the State Department warned that the U.S. could shut down Iraq’s access to the country’s central bank account held at the Federal Reserve Bank of New York, a move that could jolt Iraq’s already shaky economy, the officials said.
Iraq, like other countries, maintains government accounts at the New York Fed as an important part of managing the country’s finances, including revenue from oil sales. Loss of access to the accounts could restrict Iraq’s use of that revenue, creating a cash crunch in Iraq’s financial system and constricting a critical lubricant for the economy.