(Business Insider) The United States government is flexing its muscles to Iraq, warning there could be stiff financial consequences if the country follows through on efforts to expel US military forces in response to the US missile strike on Iraqi soil last week that killed a top Iranian general.
In light of overtures by Iraqi politicians to remove some 5,300 US troops, the US State Department reportedly threatened that it could cut off access to a key Iraqi account held at the Federal Reserve Bank of New York that holds billions in oil revenues, Iraqi officials told The Wall Street Journal.
The New York Fed provides banking services to roughly 250 central banks and other government institutions, according to WSJ. Shutting off the spigot to Iraq could squeeze the country’s access to cash, gumming up its financial system and wreaking havoc on its economy.
The warning is the latest political dustup resulting from the January 3 assassination of Iranian Maj. Gen. Qassem Soleimani at Baghdad International Airport, which has inflamed political tensions in the region.
Following the attack, the Iraqi parliament passed a nonbinding resolution to oust the US military presence from the country, which earned backing from Prime Minister Adel Abdul-Mahdi.
President Trump responded by threatening sanctions on Iraq if it follows through on the reprisals.
Amid Abdul-Mahdi’s support for the troop expulsion, US officials also reportedly warned the prime minister in a call on Wednesday of the potential fallout with the New York Fed and ensuing economic damage.
