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BAGHDAD (Reuters) - Iraq's central bank on Wednesday eased financial restrictions imposed on the Kurdistan region over its independence vote after receiving a pledge of cooperation from Kurdish banks, an Iraqi banking source said.
All but four Kurdish-owned banks were allowed to resume dollar and foreign currency transfers on Wednesday, the source told Reuters.
The central bank had informed the Kurdistan Regional Government (KRG) on Tuesday it would stop selling dollars to the four Kurdish banks, and would halt all foreign currency transfers to the autonomous region, banking and government sources told Reuters.
The measures were taken in retaliation for the Sept. 25 referendum, in which the region voted overwhelmingly for independence despite opposition from Baghdad and Iraq's neighbours Iran and Turkey.
The measures aim to tighten the control of the central bank over the Kurdish banking industry.
The central bank will maintain its dollar sale ban for four banks pending a review of their cooperation, the banking source said.
"The dollar sale prohibition will be lifted if the central bank sees that the four banks are really cooperating in disclosing their financial transactions," the source said.
The Shi'ite Arab-led Iraqi government has rejected an offer by the Kurdish government to discuss independence. It has demanded that it cancel the referendum result or face continued sanctions, international isolation and possible military intervention.
(Reporting Ahmed Rasheed; writing by Maher Chmaytelli; Editing by Gareth Jones)