On Thursday, the Reuters news agency reported that the Iraqi Central Bank has advised all banks to close their entire branches in the Kurdistan region. The agency quoted unnamed banking source and said that the Central Bank of Iraq issued orders to banks to close their branches within a week in the Kurdistan region in order to avoid a ban on the sale of U.S dollar. The source said that Iraqi Central Bank has set a deadline to close the branches expiring on 14th November. The source added that all banks should respond by confirming the closure of their branches to prevent being sanctioned. On Thursday, the Iraqi Central Bank called on banks to stop work in their branches within a week operating in the Kurdistan region from its date and until further notice. The order was issued on the basis of decision by the House of Representatives No. 58 dated 12th October.
The source also said that the decision was taken and circulated to banks on Thursday to stop operations of all transfers of funds from their branches in the Kurdistan region. Point to be noted that there are at least 63 branches of Iraqi banks within the Kurdish region. These branches were dealing in U.S dollars and other foreign currencies. The source confirmed that the decision will enter into force after one week deadline and these branches will not be able to transfer funds or deal in any foreign currency. The situation between Baghdad and Erbil heated up after the Kurdistan regional government conducted a referendum on separation from Iraq on 25th September 2017. The Iraqi House of Representatives passed 13 resolutions against the Kurdistan region after holding the referendum. The Iraqi security forces regained control of Kirkuk after its operation on 16th October to implement federal security and redeployment in Kirkuk and disputed areas.