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Iran had over $100bn of gross official reserves in 2019, says IMF
The International Monetary Fund (IMF) estimated that the government held $112bn of foreign assets and reserves in March last year. It also indicated that Iran ran a current account surplus.​ The figures imply that Iran might withstand the sanctions without an external payments crisis.
But the IMF also noted that Tehran was having difficulty accessing some of its reserves as its relations with foreign banks were constrained by the threat of US sanctions. Meanwhile, sanctions could cut the current account surplus sharply given the severe disruption they are causing to trade.
The IMF estimated in its latest World Economic Outlook released on April 14 that Iran’s current account balance​ across 2019, 2020 and 2021 would likely be at -0.1%, -4.1% and -3.4% of GDP, respectively, as a result of the impact of the coronavirus (COVID-19) pandemic.
5.1.2 ​Import/export dynamics
Trade between Iran and EU falls 2.5% y/y to €1.5bn in first four months
Iran’s foreign minister says gas flows to Turkey will resume by end of June,
Trade between Iran and the European Union in the January to April period reached a value of €1.47bn, marking a 2.5% y/y decline, according to data from the Statistical Office of the EU (Eurostat).
Trade with Europe took a massive hit in the wake of the reimposition of heavy unilateral sanctions on Iran from the US in 2018 by US President Donald Trump. Despite not officially adhering to the sanctions, multinational companies have generally avoided the Iranian market, fearing Washington would apply secondary sanctions to foreign companies continuing to do business with Iran.
In the four months, Iranian exports to the EU stood at €245.5mn, 4.73% down compared with the same period in the previous year.
Of European countries, Germany, Italy and the Netherlands were Iran’s top three trading partners, with bilateral trade volumes standing at €628.3mn (+26.45% y/y), €205.96mn (-22.09% y/y) and €153.41mn (+20.35%y/y), respectively, said Eurostat.
Meanwhile, the Islamic Republic’s trade exchanges with Luxembourg (€674,468), Slovakia (€4.34mn) and Bulgaria (€59.66mn) jumped by 850.93%, 142.96% and 116.60% respectively y/y.
Iranian gas exports to Turkey will resume by the end of June, Iranian foreign minister Mohammad Javad Zarif said on June 15 at a press conference in Istanbul held jointly with his Turkish counterpart Mevlut Cavusoglu.
Zarif said that he had received assurances that repairs to the pipeline—closed since March 31 after an explosion said by Turkish officials to be the result of a sabotage attack by the Kurdistan Workers' Party (PKK)—would be finished and that gas flows would be reinstated. Cavusoglu did not comment on the pipeline.
The PKK has attacked the pipeline several previous occasions, with subsequent repairs then completed within a few days. The failure to repair the pipeline promptly on this occasion has sparked speculation that Turkey is stalling repairs to pressure Iran to improve terms under which Turkey imports gas. State gas importer Botas, meanwhile, has been importing cheap spot LNG cargoes in place of Iranian and Russian gas.
Turkey's deputy energy minister Alparslan Bayraktar told a conference in Istanbul in February that Turkey planned to use the availability of cheap spot LNG to persuade its long-term gas suppliers to lower their prices, S&P Global
22​ IRAN Country Report July 2020 www.intellinews.com