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  • Last week, the Trump administration sanctioned Iran's entire financial sector - a move critics say further hampers its ability to buy humanitarian goods as it battles the worst COVID-19 crisis in the Middle East.

    Last week, the Trump administration sanctioned Iran's entire financial sector - a move critics say further hampers its ability to buy humanitarian goods as it battles the worst COVID-19 crisis in the Middle East. | Photo: Twitter/@AJENews

Published 12 October 2020
Opinion

The announcement comes a week after the United States sanctioned Iran's entire financial sector.

Iran's central bank chief announced Monday an agreement with neighboring Iraq to unlock frozen Iranian funds in Iraqi banks to purchase humanitarian goods. 

The announcement comes in the context of Washington's move last week to blacklist Iran's entire financial sector, which will further hamper Tehran's ability to purchase essential foods and medicine while facing the worse COVID-19 outbreak in the Middle East.

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US Sanctions Iran's Entire Financial Sector

In a banking and business delegation to Baghdad Monday to meet with the prime minister, central bank chief, and finance minister, Central Bank of Iran (CBI) governor, Abdolnasser Hemmati, said: “During these negotiations, especially in trilateral talks with the heads of the central bank and the Trade Bank of Iraq, we reached good agreements to free [Iranian] central bank funds and use them to import essential goods to our country.”

This summer, Iran-Iraq Chamber of Commerce member Hamid Hosseini estimated nearly $5 billion of Iranian funds are frozen in Iraqi banks due to U.S. sanctions against Iran's economy, most of which come from its electricity and natural gas exports to its neighbor.

Following the U.S. sanctions' announcement last week, the Iranian currency hit an all-time low with an open-market rate of 310,000 rials per $1 on Sunday. On Monday, Iran recorded its highest single-day COVID-19 death toll of 272 and its highest single-day infection rate of 4,206. 

Despite U.S. sanctions on Iranian energy exports in November 2018, the U.S. has granted 45-90 day waivers permitting Iraqi energy and natural gas purchases, with the State Department mentioning on multiple occasions it has been working with Iraq to decrease dependence on Iranian imports and increase energy independence. 

After U.S. President Donald Trump withdrew from the Iran nuclear deal in 2018, Iran's economy has been hit with a relentless barrage of economic sanctions, raising concerns that imports of food and medicine could be further affected given some of the sanctioned banks specifically facilitated humanitarian trade transactions. 

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