The Trump administration reportedly threatened to cut off Iraq’s access to its account with the Federal Reserve Bank of New York over a proposed withdrawal of American troops.
The Wall Street Journal reported Saturday that the State Department threatened to cut off Iraq’s New York Fed account in a phone call Wednesday with Prime Minister Adel Abdul-Mahdi, according to unnamed Iraqi officials. The resulting cash shortage would hurt Iraq’s economy.
Many countries maintain accounts with the New York Fed in order to store government revenue in the form of U.S. dollars. In Iraq’s case, much of that comes from oil sales.
The State Department didn’t respond to TPM’s request for comment on Saturday.
Abdul-Mahdi and Iraq’s parliament have called for American troops to exit the country following the killing, ordered by President Donald Trump, of the top Iranian general Qassem Soleimani outside Baghdad International Airport a week ago.
Trump in turn threatened to sanction Iraq if U.S. troops were expelled. The State Department has refused to recognize Iraq’s call for the troops to leave.
“At this time, any delegation sent to Iraq would be dedicated to discussing how best to recommit to our strategic partnership — not to discuss troop withdrawal,” the State Department said in a statement quoted by The Washington Post Friday.