US Unveils New Iran Sanctions
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The White House on Monday announced its ninth set of sanctions against Iran, including measures that target the Iranian rial for the first time, as it increases the pressure on Tehran to abandon its nuclear programme.
This is the first time the United States has directly targeted the Iranian currency, which has already lost two-thirds of its value against the U.S. dollar since late 2011, hurt by a relentless slew of Western sanctions aimed at crippling Iran’s controversial nuclear programme.
The White House on Monday announced its ninth set of sanctions against Iran, including measures that target the Iranian rial for the first time, as it increases the pressure on Tehran to abandon its nuclear programme.
This is the first time the United States has directly targeted the Iranian currency, which has already lost two-thirds of its value against the U.S. dollar since late 2011, hurt by a relentless slew of Western sanctions aimed at crippling Iran’s controversial nuclear programme.
The enhanced sanctions, less than two weeks before Iran holds its presidential elections, will make it more expensive and unsustainable for foreign financial institutional to conduct or facilitate “significant” transactions in the rial.
“The idea here is to make the rial essentially unusable outside of Iran,” said a U.S. official who spoke on condition of anonymity.
President Barack Obama also approved sanctions against people who do business with Iran’s auto sector, which the White House identified as a major source of revenue for Tehran.
The auto industry had been one of the strongest non-oil sectors in the economy but many international companies left or scaled back their operations in Iran as a result of previous rounds of sanctions.
Sanctions imposed by the United States and European Union halved Iran’s oil exports last year, depriving the government of billions of dollars in revenue as well as sending inflation soaring, causing widespread hardship among Iran’s population.
Related: Iran Oil Exports At Lowest Level Since 1986 Iran-Iraq War
Related: Iran to Subsidise Food for Poor As Sanctions and Inflation Cripple Economy
Talks aimed at resolving the protracted dispute have stalled in advance of Iran’s presidential elections, in which Saeed Jalili, Iran’s top nuclear negotiator, is the frontrunner. He has said that the country will never compromise on the nuclear issue and that the sanctions will have no effect.
Iran’s leaders have remained resolutely defiant even as previous sanctions – which have focused on the banking, oil and shipping sectors – have had a crippling effect on the economy.
Trita Parsi, head of the National Iranian American Council, said the US’s latest sanctions would have no more impact than previous efforts.
“The fundamental basis for this is flawed,” he said. “There seems to be a belief that if we increase the pressure enough, they will give in. But the Iranians do not perceive a way out and do not see a way for the Americans to roll back the sanctions.”
The sanctions go into effect on July 1.
Related: MAD For Oil: Will US Sanctions On Iran Lead To Mutually Assured Economic Destruction?
