05/08/2018, 14.12
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Iran’s economy stalling as the world waits for Trump to reject the nuclear agreement

by Kourosh Sheikzadeh

The US president will announce this afternoon his possible "decision" to scrap the deal. For Rouhani, the US will regret its decision. In Tehran prices have doubled in the past few months so a dollar is now worth 70,000 rials. Without the embargo, the US might have been forced to allow the transfer of US$ 150 billion dollars to Iran where the most right-wing factions could be strengthened.

Tehran (AsiaNews) – Iran's economic situation is becoming increasingly difficult as the world waits the expected announcement by US President Donald Trump that he is going to withdraw from the nuclear agreement signed in 2015 between Iran and six great powers (United States, Russia, China, Great Britain, France and Germany).

Since the beginning of his mandate Trump has always said that he wanted to cancel "one of the worst agreements" signed by the US, block funds that could be used to “finance terrorism” and seek "regime change" in the Islamic Republic.

The president tweeted that he would announce his “decision” today at 2 pm (Washington time).

The nuclear deal gave some hope to the Iranian population, allowing the economy to revive thanks to greater oil sales on international markets and the end of the embargo on trade.

The fear now is that the US will renew sanctions smothering the small improvements recorded so far.

The end of the deal could also bring sanctions against trade with Iran, blocking economic and financial transactions.

Two days ago, Iranian President Hassan Rouhani, said that if the US pulled out of the deal “they will regret it like never before in history”, hinting that Iran could restart its enrichment programme, which it had stopped to meet the terms of the agreement.

The Iranian leader added that Trump’s action would negatively affect Iran’s economic situation only “for two or three months”.

In fact, as analysts and businessmen in Tehran told AsiaNews, markets in the Iranian capital are waiting to see what happens.

Meanwhile, the Iranian currency, the rial, lost further against the US dollar and the euro. A US dollar traded around 38,000 Irials six months ago; now it is 70,000.

This has pushed up the cost of imports and this has affected to the value of property. To protect themselves against devaluation, people are trying to exchange rials for foreign currencies or gold, but the supply of foreign currencies is very limited.

The Iranian government has banned or greatly curtailed foreign exchange, as well as financial transactions with abroad.

For the United States, the agreement is also a question of money. Trump and his Republican allies opposed to the agreement arguing that without the sanctions, the US had to transfer to Iran US$ 1.8 billion, which could reach up to US$ 150 billion dollars in financial assets owned by Iranians, blocked by the embargo.

Trump complains that the agreement does not denuclearise Iran but fails to acknowledge that the agreement gives the International Atomic Energy Agency (IAEA) the power to monitor nuclear sites for twenty years (and not only until 2025 when the agreement expires).

As for "regime change", many analysts note that Trump's attitude only hardens Iran’s response and helps the country’s hard-liners, undermining Rouhani’s willingness to talk in favour of the Revolutionary Guards (Pasdaran) and the regime’s most right-wing clerics who can only benefit from tensions with the West and a war emergency.

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