US warns Baghdad Iraq could lose access to
critical US-based bank account where oil
revenues are held-WSJ.
By Al JazeeraJanuary 13, 2020 "Information
Clearing House" - The iron
grip the United States maintains over the global
financial system - and its propensity to use that
power to promote its national interests - was
reportedly at play this week after Iraq's parliament
voted on January 5 to urge caretaker Prime Minister
Adel Abdul Mahdi to expel all foreign troops from
the country.
The Wall Street Journal
reports the Trump administration warned Iraq
that if it kicks US forces out of the country,
Washington could respond by shutting down Baghdad's
access to a key account Iraq's central bank holds
with the Federal Reserve Bank of New York - an
account that is crucial to the management of Iraq's
oil revenues and its overall financial stability.
More than 200 central banks, governments and
international official institutions hold accounts
with the New York Fed, thanks to the outsized role
the US dollar plays in global financial
transactions.
The New York Fed provides these foreign account
holders with a range of banking services to
facilitate cross-border payments, manage dollar
reserves, and access banking channels to help
stabilise markets during times of acute financial
stress.
The WSJ notes that if Iraq were to lose
access to its New York Fed accounts and the funds in
them, including profits from oil sales, that could
trigger a shortage of foreign exchange vital to the
functioning of Iraq's already fragile economy.
