Iraq stopped selling dollars to leading banks in Kurdistan and banned
foreign currency transfers to the autonomous region on Tuesday, stepping
up its retaliation for the Kurds independence vote.
The financial sanctions follow a ban on direct international air
travel to the region imposed by the central government on Friday.
Iraqs central bank informed the Kurdistan Regional government (KRG)
that it would stop selling dollars to four major Kurdish banks and stop
all foreign currency transfers to the region, banking and government
sources told Reuters.
Businesses in need of foreign currency and foreign workers in
Kurdistan, whose pay and remittances are usually in dollars, will be the
most affected by the new measures.
Business people and expatriates were also the most directly hit by
the ban on international flights to the Kurdish airports of Erbil and
Sulaimaniya. It forces them to travel via airports in Baghdad and
southern Iraq, increasing cost and adding delay.
"The condition for ending the dollar sale prohibition is to have
the Kurdish banks under the central banks control," said an Iraqi
official.
But a Kurdish official in the KRG capital Erbil said the regions
banks already reported to the central bank in Baghdad, and the airports
of the Kurdish region already reported to the Iraqi Civil Aviation
Authority.
Iraqs parliament on Tuesday said it had voted for financial
sanctions which would "preserve the interests" of Kurdish citizens and
target the Kurdish leadership.
The Shiite Arab-led Iraqi government has rejected an offer by the
Kurdish government to discuss independence. It has demanded that it
cancel the result of the Sept. 25 referendum or face continued
sanctions, international isolation and possible military intervention.
The U.S. administration strengthened its alliance with Iraqs Kurds
during the war on Islamic State, but is taking the side of Baghdad in
the crisis in refusing to recognise the referendum.
Iraqs powerful neighbours Iran and Turkey are backing Baghdad,
fearing the spread of separatism to their own Kurdish populations.
