ERBIL, Kurdistan Region of Iraq – Iraqi Prime Minister Ali al-Zaidi on Saturday welcomed an agreement between the Central Bank of Iraq (CBI) and the US Treasury Department that will allow seven Iraqi banks to resume correspondent banking transactions in foreign currencies, paving the way for a future return to US dollar transactions.

“We welcome the agreement reached between the [CBI] and the US Treasury Department, which represents a significant step in reforming the banking sector and strengthening its integration into the global financial system,” Zaidi wrote on X.

The agreement qualifies seven Iraqi banks to resume correspondent banking transactions in foreign currencies, and could help them regain access to US dollar transactions “after fulfilling compliance and governance requirements.”

The US Treasury has for years worked with the CBI to tighten oversight of Iraqi banks amid concerns over banking violations, particularly the transfer of US dollars to sanctioned entities affiliated with Tehran.

In October 2025, Washington announced the imposition of sanctions on three Iraqi bank executives, accusing them of laundering money for Iran's Islamic Revolutionary Guard Corps (IRGC) and Iran-backed militias in Iraq.

Zaidi said that the milestone agreement “confirms the success of the government's financial reform approach,” the key principles of which involve reducing oil dependency, modernizing the banking system, digitalizing government revenue, and fighting financial crimes.

“This strengthens confidence in the Iraqi banking sector and opens broader horizons for the national economy and investment,” he added.

Earlier on Saturday, the premier oversaw the signing of 48 memoranda of understanding (MoU) between Iraqi government bodies, private companies, and their US counterparts, as part of his ongoing visit to the US.

Zaidi arrived in the US on Monday for a week-long visit that saw him meet US President Donald Trump in the White House, in addition to conducting talks with myriad US companies in a bid to bolster Iraq's economy with foreign direct investment.

Since assuming power after a drawn-out selection process by Iraq's ruling Coordination Framework, Zaidi has earned Washington’s backing for his efforts to restrict weapons to the state, a sweeping anti-corruption drive, and an openness to cooperation in the energy sector.