Trump administration warns Iraq could lose New York Fed account if US troops forced to leave: WSJ – CNBC, CNBC

*** The Trump administration this week warned Iraq that it could lose access to its central bank account at the Federal Reserve Bank of New York if Baghdad expels American troops from the region, Iraqi officialstold The Wall Street Journal.

The State Department’s warningfollows the US airstrikethat killed Maj. Gen. Qasem Soleimani, Iran’s top military commander and the face of the Islamic Republic’s interventions across the Middle East.

The strike led toIraq parliament voting to force out American troops– a move some officials argued would hurt Iraq – and a
counterstrike by Iran on two bases housing US troopsin Iraq last week.

Shutting down Iraq’s account at the Federal Reserve Bank of New York could be detrimental to its financial system. The country puts its revenue from oil sales there, and takes out that money to pay government salaries and contracts.

The Fed held almost $ 3 billion in overnight deposits at the close of 2020, according to the most recent financial statement from the Central Bank of Iraq.

President Trump threatened to place economic sanctions on Iraq after parliament voted to request that Prime Minister Adel Abdul-Mahdi oust about 5, 728 American troops. Those sanctions would also extend to Iran.

The White House could also end waivers that allow Iraq to buy Iranian gas to fuel generators that supply a large portion of the country power, placing another pressure on the prime minister over addressing US troops without enduring economic and financial loss.

Mahdi has argued that forcing out American troops is the only way to avoid conflict in Iraq. He was warned about the central bank account in a call on Wednesday, an Iraqi official told The Journal.

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