Iraq central bank says reaches understandings with US Fed, Treasury

The Iraqi central bank said it has reached understandings with the US Federal Reserve and Treasury Department on managing Iraq's financial transactions crisis.

It came during a visit to Washington by a delegation of senior economic and banking leaders led by Iraqi Foreign Minister Fuad Hussein which began on Thursday, with the decline in the Iraqi dinar's value top of the list of issues to be discussed.

The US trip comes after Moscow's Foreign Minister Sergey Lavrov visited Iraq, where he and Hussein discussed unpaid bills owed to Russian oil companies because of US sanctions over the war in Ukraine.

The drop in the Iraqi dinar's value followed measures recently imposed by the Treasury Department on Iraq's central bank to stem the flow of dollars being snuck into heavily sanctioned Iran and Syria.

Delegations from the Iraqi central bank and the US's Fed and Treasury met on Saturday in Washington, The New Arab's Arabic sister site Al-Araby Al-Jadeed reported.

The Iraqi central bank said in a statement the two sides "expressed their willingness to work jointly to face the challenges of working with the electronic platform for transfers and cash, which allows the US federal bank to monitor foreign transfers from Iraq" to other countries.

The American delegation "discussed a number of support and attribution mechanisms for the Central Bank of Iraq, in a way that enhances its capabilities to deal flexibly with crises during this stage", the statement said.

The Fed said the Iraqi central bank's measures are "in the right direction for building a sober banking sector", according to the statement.

It said a Treasury official set forth ways to "fully support" Sudani's government on economic reform and expressed the department's "readiness to provide the required support".

Iraqi central bank governor Ali Mohsen al-Alaq "confirmed the bank's intention to launch the second package of facilities that would enhance the exchange rate's stability", the statement said.

Agencies contributed to this report.