Shafaq News/ Iraq’s Finance Ministry has begun withdrawing from tax deposit reserves to cover public sector salaries, following delays in US dollar transfers from the Federal Reserve and mounting liquidity constraints, a senior source told Shafaq News.

The source indicated that restricted access to foreign currency and declining cash availability pushed the ministry to utilize dormant tax funds to meet payroll obligations and essential government expenses.

“Liquidity levels at state-run banks have dropped sharply, prompting most institutions to halt loans and salary advances,” the source added.

Parliament’s Economic Committee reported that the directors of Al-Rafidain and Al-Rasheed banks disclosed the withdrawals in closed-door meetings, but the information was later leaked to media outlets.

Earlier, the Iraqi cabinet granted Finance Minister Taif Sami emergency authorization to access tax deposits that have remained inactive for about five years, allowing the government to sustain salary payments through April and beyond.