Prime Minister Haider al-Abadi’s office revealed that Iraq would have to give up the dollar in trade accounts with Iran, under US sanctions imposed on Tehran.
“Sanctions will have a major impact on remittances and dollar-denominated transactions, as the two sides have agreed to moveaway from the dollar,” Saad al-Hadithi, the agency’s spokesman, told Russian news agency RIA Novosti.
He predicted that “the abandonment of the US currency negatively affect the trade between the two countries,” noting that “it will be difficult to maintain the level of trade under the sanctions imposed on Tehran.”
Al-Hadithi stressed that the government will develop a “new mechanism” to boost trade relations between the two sides to reduce the impact of sanctions on the two countries’ trade.
The first package of new US sanctions on Iran entered into force last Tuesday and the second package of sanctions will be implemented in November.
The first package includes the freezing of financial transactions and imports of raw materials, as well as targeting the automotive and commercial aviation sectors.
The sanctions also prohibit the Iranian government from buying or possessing US currency, Tehran’s trade in precious metals, commercial transactions in Iranian rials, and activities related to Iran’s sovereign debt issuance.