Escalating Dollar Shortage Crisis; Iranian Foreign Minister Requests 'Banking Cooperation' from Iraq

Two weeks after the revelation of senior monetary and banking officials in Baghdad opposing any transfer of 'dollars' to Tehran, the Foreign Minister of the Islamic Republic has called for strengthening 'banking cooperation' in a phone call with his Iraqi counterpart. According to domestic media, Hossein Amir-Abdollahian, the Foreign Minister of the Islamic Republic, emphasized the need for 'enhancing banking cooperation' between the two countries during a phone call with Fuad Hussein, the Iraqi Foreign Minister, referencing the 'security agreement' signed between the two sides. In the last weeks of Esfand 1401 (March 2023), coinciding with the rapid increase in the price of the US dollar against the Islamic Republic's rial, which reached '60,000 tomans', some officials and domestic media reported the entry of parts of Iran's frozen assets in Iraq and the cooperation of banks in that country for 'currency opening'. However, shortly thereafter, Jahanbakhsh Sanjabi Shirazi, the Secretary-General of the Iran-Iraq Joint Chamber of Commerce, stated on 16 Ordibehesht that, alongside promises from some officials of the Islamic Republic regarding the allocation of parts of 'Iran's frozen currencies' to merchants requesting currency, the Central Bank of Iraq 'does not allow the transfer of dollars to Iran.' Earlier, Javad Owji, the Oil Minister of the thirteenth government of the Islamic Republic, had implicitly confirmed on 16 Farvardin that the revenue from the sale of energy carriers from Iran to Iraq would only be in the form of receiving 'food and medicine' and no money would be paid to Tehran. According to statements from Islamic Republic officials, the 'financial and banking transfer' related to this year's Iranian pilgrims' trip to Saudi Arabia was also paid by Baghdad from what is referred to as 'Islamic Republic credits' (referring to Iran's frozen assets in Iraq). Various officials of the Iranian government have repeatedly claimed that the punitive sanctions imposed by the United States and the international community for the Islamic Republic's unconventional nuclear activities and Tehran's risky regional actions in various fields, including finance, are a 'blessing'.