The Iraqi government has agreed to impose new restrictions aimed at preventing US dollars from reaching Iran and allied armed groups, in exchange for the Trump administration's approval to resume shipments of US currency to Baghdad after a four-month suspension, according to US and Iraqi officials cited by the Wall Street Journal.

The sources said the US Treasury Department halted shipments of US banknotes to Iraq in late February, coinciding with the outbreak of war with Iran, depriving Prime Minister Ali al-Zeidi's government of much-needed cash liquidity at a time when Iraq's oil export revenues are deposited with the Federal Reserve Bank of New York.

The US decision came as Iraqi oil exports declined significantly due to the war with Iran, putting heavy pressure on Baghdad to reduce its ties with Tehran, which according to officials used Iraq as a major source for obtaining dollars in violation of US sanctions.

This is part of broader efforts by the Trump administration to push Iraq toward greater rapprochement with Washington after the war with Iran.