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Iran says US bank sanctions aim to “blow up” its remaining channels to pay for food, medicine
deposit with the Bundesbank at the beginning of the year, according to the banks’ financial accounts. Some of this money has since been withdrawn, but the level of financial exposure is still above €3bn, Bank for International Settlements data from June shows.
Iran late on October 8 accused the US of targeting its “remaining channels to pay for food and medicine” in the midst of the coronavirus (COVID-19) pandemic by blacklisting virtually all of the Islamic Republic’s financial sector, cutting it off from the international financial system.
The Trump administration move blacklists 18 Iranian banks that had, so far, escaped most of the US sanctions imposed since the US in May 2018 pulled out of the 2015 nuclear deal between Tehran and six world powers, arguing that only heavy sanctions could bring Tehran to the table to renegotiate restrictions on its nuclear and ballistic missile development programmes and roles in various Middle East conflict zones.
Critically, the move subjects foreign, non-Iranian financial institutions to penalties for doing business with the blacklisted Iranian entities, effectively cutting off Iran from global financial channels essential to trade.
"Today's action to identify the financial sector and sanction eighteen major Iranian banks reflects our commitment to stop illicit access to U.S. dollars," US Treasury Secretary Steven Mnuchin said in ​statement​.
Central Bank of Iran governor Abdolnaser Hemmati dismissed the new sanctions. He said they amounted to propaganda linked to US domestic politics ahead of the November 3 American presidential election. “
The targeted banks are the Amin Investment Bank, Bank Keshavarzi Iran, Bank Maskan, Bank Refah Kargaran, Bank-e Shahr, Eghtesad Novin Bank, Gharzolhasaneh Resalat Bank, Hekmat Iranian Bank, Iran Zamin Bank, Karafarin Bank, Khavarmianeh Bank, Mehr Iran Credit Union Bank, Pasargad Bank, Saman Bank, Sarmayeh Bank, Tosee Taavon Bank, Tourism Bank, and the Islamic Regional Cooperation Bank.
Foreign companies that do business with those banks have been given 45 days to wind down their operations before facing "secondary sanctions."
"Our maximum economic pressure campaign will continue until Iran is willing to conclude a comprehensive negotiation that addresses the regime's malign behavior," US Secretary of State Mike Pompeo said in a statement.
8.1.1 ​Liquidity / assets
Iran’s liquidity expands to IRR18.82 quadrillion in Persian year ending March 2019
The Central Bank of Iran (CBI) has reported on July 8 rial liquidity grew 23.1% to reach IRR18.82 quadrillion (around $447bn) in the previous Persian calendar year (to March 20).
Liquidity continues to grow due to the devaluation of the rial against a basket of other currencies. With prices continuing to creep upwards, the pace of growth is likely to be higher than the CBI’s official statistics.
The share of M2 money stood at in March at IRR2.85bn (more than $67.6bn) “Quasi money” – money sitting in bank savings accounts – stood at IRR15.97 quadrillion (above $379bn) registering a growth of 19.6% y/y.
35​ IRAN Country Report February 2021 www.intellinews.com