Iran president strikes hard line as some US sanctions resume
The uncertainty caused by the re-imposition of American sanctions has proven devastating for the Iranian economy, already weakened by decades of sanctions. Iran's rial now trades over double its government-set rate to the U.S. dollar.
The US resumed sanctions targeting Iran’s automotive sector as well as gold and other key metals on Monday. (Source: Reuters)
Iranian President Hassan Rouhani struck a hard line Monday as the U.S. restored some sanctions that had been lifted under the 2015 nuclear deal, demanding compensation for decades of American “intervention” in the Islamic Republic.
While saying he had “no preconditions” for talks, Rouhani in a live television interview maintained that Iran can rely on China and Russia to help its oil and banking sectors as the U.S. ramps up sanctions in the coming months.
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The US resumed sanctions targeting Iran’s automotive sector as well as gold and other key metals on Monday. “If someone has knife in the hand and seeks talks, he should first put the knife in his pocket,” Rouhani said. A first set of U.S. sanctions that had been eased by the Obama administration under the landmark nuclear deal took effect again on Monday, following President Donald Trump’s decision in May to withdraw from the accord. Renewed sanctions targeting Iran’s oil industry and banking sector will resume on Nov. 4.
Rouhani fell back on the rhetoric of many of his predecessors by referencing the 1953 CIA-backed coup that overthrew Iran’s elected prime minister and cemented the shah’s rule. “I have no pre-conditions” for negotiating with America “if the U.S. government is ready to negotiate about paying compensation to the Iranian nation from 1953 until now,” Rouhani said. “The U.S owes the Iranian nation for its intervention in Iran.” Trump repeatedly has tweeted that he is willing to talk directly to Iranian officials without preconditions.
But the Iranians, who negotiated with the U.S. for more than two years in order to reach the nuclear accord, say it has betrayed their trust by reneging on its commitments. Rouhani held a brief phone call with President Barack Obama in 2013 as the talks were getting underway, the first time presidents of the two countries had spoken directly since the 1979 Islamic Revolution.
The uncertainty caused by the re-imposition of American sanctions has proven devastating for the Iranian economy, already weakened by decades of sanctions. Iran’s rial now trades over double its government-set rate to the U.S. dollar. Sporadic protests have broken out across the country, something that Rouhani again blamed Monday on the U.S.
“The Americans thought that they can add to our social and economic problems through increasing pressure,” he said.
Iran’s central bank has lifted a ban on exchange offices, allowing them to resume work in a move aimed at bringing in badly needed hard currencies. The bank also gave the green light for Iranian “legal institutions and businesses” to bring gold and foreign currency into Iran, according to the governor, Abdolnasser Hemmati. Hemmati told state TV late Sunday that “money exchangers are allowed to sell and buy foreign currencies” once again, to improve access to “services and travel abroad.”
The official exchange rate will remain at 42,000 rials to the dollar for vital imports such as medicine and food, he added.
The decision goes into effect on Tuesday. Hemmati said the central bank will try “not to intervene in deciding on the price” of foreign currencies. The ban on the exchange offices, introduced in March, had left the offices idle overnight: gone were the daily long lines of Iranians waiting to buy or sell dollars. The measure backfired, and the black market flourished.
Hemmati said the government’s decision in April to enforce a single exchange rate to the dollar had caused “serious problems” for the country. He maintained the central bank’s decision reflects Iran’s “strength” in the face of renewed U.S. sanctions. “We are facing an economic war and the U.S. government is restoring sanctions and also trying to increase them,” he said. “But our government is powerful … and is capable of opening up the foreign currency market on the same day.” Hemmati said Iran has exported some $15 billion worth of non-oil products from April to July.
The United States has also been pushing its allies to halt their import of Iranian oil ahead of the November deadline. Among the top importers of Iranian oil are China, India, Turkey and South Korea. Rouhani, meanwhile, has suggested Iran might block the Strait of Hormuz in response to a shutdown of its oil exports. The strait at the mouth of the Persian Gulf is crucial to global energy supplies as about a third of all oil traded at sea passes through it. However, Rouhani offered faint praise for Trump in his appearance on state TV.
“Trump has already taken a step back from his previous harsh stance,” Rouhani said. “Trump should go back several steps, at least to the pre-Trump-era, to protect the interests of the U.S., Iran and the world.”
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