The Iraqi Central Bank notified the country's banks not to trade with Iranian banks using US dollars because a ban has been imposed, NRT reported.

“Amid US sanctions on Iran, Iraq has no choice but to stop exchanging dollars with Iran,” Iraqi government spokesman Saad al-Hadithi said. “While there are sanctions on Iran, it will be difficult to preserve trade relations with that country [Iran],”

Washington reimposed sanctions on Iran after Trump withdrew from the Joint Comprehensive Plan of Action (JCPOA), informally known as the Iran Nuclear Deal, which was signed by Iran and several major powers in 2015.

Last week, a senior Iraqi official, speaking on condition of anonymity, told AFP that his country was complying with US sanctions and had decided to stop importing Iranian cars.

He revealed, however, an Iraqi government request for an exception to allow the import of spare parts for the auto industry to ensure the survival of a factory, which provides five thousand jobs. The request is currently under review.

"This puts all workers at risk of losing their jobs,” he said.

On the other hand, Iraqi markets rely heavily on Iranian products, which will lead to a severe recession under the implementation of these sanctions.

Reporter’s code: 50101