Iran Central Bank governor expects Washington to up economic pressure as US election nears

ERBIL, Kurdistan Region — The governor of Iran's Central Bank warned on Wednesday that Washington will step up pressure on Tehran as the US presidential election draws closer, exacerbating Iran's economic woes.

“We have to accept that pressure on Iran will increase in the next three weeks,” governor Abdolnaser Hemmati said at a press conference that followed a cabinet meeting on Wednesday. 

“They have placed restrictions on our assets, now tens of billions of dollars of our revenue is blocked abroad. Even many countries who have good relations with us do not allow Iran to use these funds because of US pressure.”

Iran has made considerable efforts to access its funds overseas, Hemmati said, for which it soon hopes to reap the rewards.

“We have taken good measures and I am hopeful for the future,” he told reporters. “I visited Iraq a few days ago, fortunately the trip was successful and I hope we will be able to use our resources [there] which amount to more than $5 billion dollars.”

The Trump administration withdrew from the Iran nuclear deal in May 2018, and Washington re-imposed, then expanded economic sanctions on Iran with the stated aim of preventing the country from acquiring a nuclear weapon – a pursuit Iran has denied – and stopping the Islamic Revolutionary Guard Corps (IRGC) from interfering in neighbouring countries.

Within Iran, President Hassan Rouhani is at loggerheads with hardliners in the country including the IRGC about how to deal with the West. Hardliners managed earlier this year to block two pieces of legislation that would have prevented Rouhani’s government from falling foul of regulations from the Paris-based Financial Action Task Force (FATF), a body which primarily combats money laundering and financing of terrorism. Instead, Iran was added to FATF's high-risk jurisdiction list in February, where it joined North Korea.

Rouhani’s reformist supporters have condemned hardliners with increasing frequency as the Iranian currency fast loses its value and the economy disintegrates.

"Though accepting FATF would not root out [Iran's] economic problems because [US] sanctions would still prevent some activities, not ratifying FATF means no banking relations with countries such as China and Russia that are keen on continuing relations with Iran,” Hassan Forouzanfard, the head of the commission for combatting corruption in Tehran's Chamber of Commerce was quoted as saying by the government-run IRNA news agency. 

Kayhan newspaper, which acts as the main mouthpiece of the hardliners and whose editor-in-chief is appointed by Supreme Leader Ali Khamenei, retaliated by saying that the Rouhani government should not blame its incompetence on FATF legislation. 

With the value of the toman against the dollar tumbling from 16,000 tomans earlier this year to 30,000 tomans now, Hemmati acknowledged that the government is not in full control of Iran's currency market. 

“This [the currency market] is the most risky market...anything could happen in this market,” Hemmati said.

Growing US sanctions, the coronavirus pandemic, and the fall in oil prices have combined to bring Iran's economy to its knees, forcing over 75 percent of the population to rely on government subsidies for survival.

“The [Iranian] decision makers are hoping that Trump won't be re-elected in the upcoming US election and that Biden will be elected, but the truth is that America's relation to us is not the decision of one person, but of the political establishment in that country,” Iranian economist Lotfali Bakhsi said on Tuesday. “But rest assured that even if Biden were to become President, these pressures would not only not be decreased, but increased.”