ERBIL, Kurdistan Region of Iraq – The US Federal Reserve has sent a shipment of $500 million in cash to the Central Bank of Iraq (CBI), an official source told Iraqi state media on Thursday, with the funds aiming to support traveler’s transactions and foreign remittances.

"The US Federal Reserve sent a new shipment of $500 million in cash to the Central Bank of Iraq… the funds will be used for transactions related to travelers and foreign remittances, subject to the approval of the Central Bank of Iraq,” the source told INA.

The shipment comes after reports in April alleged that the United States had imposed two major sanctions packages on Iraq, including halting dollar cash shipments and dollar transfers. The claims were later denied by the CBI, which asserted that the shipments are ongoing.

At the time, after The New Region reached out to the US Department of State, the department referred the outlet to a previous statement which highlighted Baghdad's "failure" to prevent attacks on US interests in Iraq.

However, with current Prime Minister Ali al-Zaidi taking office in May, Iraq has advanced relations with the US, as the premier has sought to advance banking reforms, curb the influence of Iran-backed militias, and a high-level visit to the US, where he met with President Donald Trump.

During his visit, the CBI and US Treasury Department signed an agreement 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.

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.