Iraq terminates central bank dollar auction system following significant pressure from the United States

Iraq IQformally ended its central bank dollar auction system at the beginning of 2025. This structural change followed significant pressure from the United States USto stop the alleged siphoning of the US Dollar / Iraqi Dinar USDIQDto sanctioned entities, particularly those in Iran IR. This shift fundamentally alters the management of revenues from Crude Oil CLUSD, which currently provides about 90% of the state budget for the country.

The United Stateshas maintained effective control over the oil revenue dollars of Iraqsince the invasion in 2003. In the aftermath of that conflict, the Coalition Provisional Authority established the Development Fund for Iraq to secure oil revenues and shield them from legal claims dating back to the era of Saddam Hussein. The fund was placed at the Federal Reserve Bank of New York and eventually became a formal account of the Central Bank of Iraqat that institution, which remains the case today. President George W. Bush george w bushsigned the initial executive order that established this financial framework, a policy that has been renewed by every subsequent president.