The Iranian economy is starting to feel the sting from a raft of banking sanctions applied by the US to pressure Tehran over its controversial nuclear drive, analysts said.
Washington has blacklisted Iran's three main banks and has also successfully encouraged virtually all major European banks to cut business with the Islamic republic.
"Practically all the major European banks have ceased their cooperation with Iran," said an official from Iran's Export Development Bank, who asked not to be named.
"It is no longer possible to wire money by dollar into Iran and for the payments in euro there are just three European banks. They could stop cooperating with us at any moment," the official said.
British-Asian bank HSBC and the Swiss giants UBS and Credit Suisse were the first to cut business with Iran last year while Deutsche Bank, Commerzbank and BNP Paribas have followed suit this year.
Meanwhile, Washington has blacklisted Iranian banks Melli, Mellat and Saderat, accusing them of acting as a conduit for "terrorist financing" -- something the banks vehemently deny.
The decision has effectively cut the Iranian banks off from the dollar-based financial system and turned them into pariah institutions with whom their foreign counterparts are unwilling to deal.
"There has never been a single example of the involvement of the bank in any illegal activity," Bank Mellat said in an angry statement rejecting the allegations.
But it acknowledged the measures would be felt by ordinary Iranians: "It may inflict harm on the lives of ordinary people using services."
The moves against the Iranian financial system have been in parallel to two sets of UN sanctions against its ballistic missile and nuclear programs. But it is the unilateral US actions that are being felt most keenly in Iran.
In essence, the sanctions aim at cutting off Iran's financial lifeblood.
Foreign banks, who were already refusing to accept letters of credit issued by their Iranian counterparts, are now refusing to carry out even simple operations of money transfers to Iran.
"We wanted to import equipment to construct prefabricated houses but the Australian banks refused to accept letters of credit," said Touraj, an Iranian businessman who preferred not to give his surname.
Even Asian banks from countries that still have close economic links with Iran -- such as South Korea and China -- have been imposing restrictions on business with the Islamic republic.
"The big banks from China, one of Iran's most important partners, are now refusing to deal with Iran as they have important interests in the United States and fear reprisals," said Mehrdad Mahmoudi, a leading currency dealer.
Even banks on the Arabian peninsula -- notably those from the United Arab Emirates -- a US ally and Iran's No. 1 trading partner -- may not be prepared to deal with the Islamic republic over the long haul.
"Iranian banks can still use the services of small Asian banks or the Persian Gulf but that will not last forever," said Bijan Khajepour, director of Atieh Consulting in Tehran.
"Firms are increasingly having to pay in cash or go through a third country to import their goods which will make the finished product even more expensive," he said.
Iran's status as the world's fourth-largest oil exporter and OPEC's second-largest means it cannot allow itself to become detached from the world economy.
Foreign currency oil revenues are expected to reach US$70 billion this year.
"The aim of the Americans is to cut financial links between Iran and the rest of the world," said a banking expert, who asked not to be named.
"The great lesson of North Korea that the Americans understood was that they do not necessarily need to resort to the [UN] Security Council," he said, referring to US pressure on Pyong-yang's nuclear program.
"They can exercise the maximum pressure just by imposing sanctions through their own financial system," he said.
A fire caused by a burst gas pipe yesterday spread to several homes and sent a fireball soaring into the sky outside Malaysia’s largest city, injuring more than 100 people. The towering inferno near a gas station in Putra Heights outside Kuala Lumpur was visible for kilometers and lasted for several hours. It happened during a public holiday as Muslims, who are the majority in Malaysia, celebrate the second day of Eid al-Fitr. National oil company Petronas said the fire started at one of its gas pipelines at 8:10am and the affected pipeline was later isolated. Disaster management officials said shutting the
DITCH TACTICS: Kenyan officers were on their way to rescue Haitian police stuck in a ditch suspected to have been deliberately dug by Haitian gang members A Kenyan policeman deployed in Haiti has gone missing after violent gangs attacked a group of officers on a rescue mission, a UN-backed multinational security mission said in a statement yesterday. The Kenyan officers on Tuesday were on their way to rescue Haitian police stuck in a ditch “suspected to have been deliberately dug by gangs,” the statement said, adding that “specialized teams have been deployed” to search for the missing officer. Local media outlets in Haiti reported that the officer had been killed and videos of a lifeless man clothed in Kenyan uniform were shared on social media. Gang violence has left
US Vice President J.D. Vance on Friday accused Denmark of not having done enough to protect Greenland, when he visited the strategically placed and resource-rich Danish territory coveted by US President Donald Trump. Vance made his comment during a trip to the Pituffik Space Base in northwestern Greenland, a visit viewed by Copenhagen and Nuuk as a provocation. “Our message to Denmark is very simple: You have not done a good job by the people of Greenland,” Vance told a news conference. “You have under-invested in the people of Greenland, and you have under-invested in the security architecture of this
Japan unveiled a plan on Thursday to evacuate around 120,000 residents and tourists from its southern islets near Taiwan within six days in the event of an “emergency”. The plan was put together as “the security situation surrounding our nation grows severe” and with an “emergency” in mind, the government’s crisis management office said. Exactly what that emergency might be was left unspecified in the plan but it envisages the evacuation of around 120,000 people in five Japanese islets close to Taiwan. China claims Taiwan as part of its territory and has stepped up military pressure in recent years, including
RSS