Iraq's prime minister sent elite counter-terrorism forces more accustomed to battling Islamist militants to shut down dealers smuggling the currency to the Islamic Republic.
Saturday's raids in Baghdad represent an early test for Prime Minister Mohammed Shiaa al-Sudani, who took office in October after more than a year of political paralysis and must now tread a delicate diplomatic path.
In November, the New York Federal Reserve introduced tighter controls on international dollar transactions by commercial Iraqi banks.
The move was designed to stop the illegal syphoning of dollars to Iran. It will apply more pressure along with US sanctions imposed over Tehran's nuclear programme and other disputes, leaving Tehran struggling to source dollars.
A senior banking official said the United States sent a clear message to Iraqi officials: comply with the new regulations or the Iraqi central bank will face fines.