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.
‘IN A DIFFERENT PLACE’: The envoy first visited Shanghai, where he attended a Chinese basketball playoff match, and is to meet top officials in Beijing tomorrow US Secretary of State Antony Blinken yesterday arrived in China on his second visit in a year as the US ramps up pressure on its rival over its support for Russia while also seeking to manage tensions with Beijing. The US diplomat tomorrow is to meet China’s top brass in Beijing, where he is also expected to plead for restraint as Taiwan inaugurates president-elect William Lai (賴清德), and to raise US concerns on Chinese trade practices. However, Blinken is also seeking to stabilize ties, with tensions between the world’s two largest economies easing since his previous visit in June last year. At the
UNSETTLING IMAGES: The scene took place in front of TV crews covering the Trump trial, with a CNN anchor calling it an ‘emotional and unbelievably disturbing moment’ A man who doused himself in an accelerant and set himself on fire outside the courthouse where former US president Donald Trump is on trial has died, police said yesterday. The New York City Police Department (NYPD) said the man was declared dead by staff at an area hospital. The man was in Collect Pond Park at about 1:30pm on Friday when he took out pamphlets espousing conspiracy theories, tossed them around, then doused himself in an accelerant and set himself on fire, officials and witnesses said. A large number of police officers were nearby when it happened. Some officers and bystanders rushed
Beijing is continuing to commit genocide and crimes against humanity against Uyghurs and other Muslim minorities in its western Xinjiang province, U.S. Secretary of State Antony Blinken said in a report published on Monday, ahead of his planned visit to China this week. The State Department’s annual human rights report, which documents abuses recorded all over the world during the previous calendar year, repeated language from previous years on the treatment of Muslims in Xinjiang, but the publication raises the issue ahead of delicate talks, including on the war in Ukraine and global trade, between the top U.S. diplomat and Chinese
RIVER TRAGEDY: Local fishers and residents helped rescue people after the vessel capsized, while motorbike taxis evacuated some of the injured At least 58 people going to a funeral died after their overloaded river boat capsized in the Central African Republic’s (CAR) capital, Bangui, the head of civil protection said on Saturday. “We were able to extract 58 lifeless bodies,” Thomas Djimasse told Radio Guira. “We don’t know the total number of people who are underwater. According to witnesses and videos on social media, the wooden boat was carrying more than 300 people — some standing and others perched on wooden structures — when it sank on the Mpoko River on Friday. The vessel was heading to the funeral of a village chief in