US suspends funding, dollar shipments to Iraq

The United States has suspended all funding and security coordination with the Iraqi government and halted dollar shipments to Iraq's central banking system. Washington says the suspension will remain in effect until a new Iraqi government is formed and Baghdad provides information on pro-Iranian militia members who have attacked U.S. targets. Iraq's economy is 90% dependent on oil revenue paid in dollars into a Federal Reserve account in New York, with $1-2 billion in cash flown in monthly to pay salaries and conduct government functions. The U.S. threatened in January to suspend engagement if any of 58 pro-Iranian MPs were included in the cabinet, and President Trump is now enforcing that ultimatum while Iraq remains paralyzed between Washington and Tehran.