Sanctions are costing Iran some $5 billion a month —or $120 billion since 2008— according to senior U.S. officials. Overall, Tehran’s economy shrunk by five percent in 2012. Sanctions have also cut Iranian banks off from the international financial system, which has exacerbated rampant inflation. The following are facts and excerpts from an Obama administration briefing on the eve of the third round of talks between Iran and the world’s six major powers.
• Iran’s currency, the rial, has lost around 60 percent of its value against it against the dollar since 2011.
• The Central Bank of Iran and most larger Iranian banks have been cut off from the international financial system.
• Declining oil exports are costing Iran up to $5 billion each month, or approximately $120 billion since 2008.
• Iran has about $100 billion frozen in foreign banks that it has no access to because of banking sanctions.
• Iran’s economy shrunk by five percent in 2012.
Senior Administration Officials on P5+1 Negotiations with Iran
Last year, Iran’s economy contracted by more than 5 percent. And its currency, the rial, has lost around 60 percent of its value against its – against the dollar since 2011. The international financial links of the most significant Iranian banks have been severed and the activities of the Central Bank of Iran substantially curtailed. Iran’s oil experts – exports, which currently average only around a million barrels per day, are dramatically down from an average of about 2.5 million barrels per day in 2011. These declining exports are costing Iran up to $5 billion a month and have cost Iran, along with our other sanctions, about $120 billion – $120 billion since we’ve been at this… [since] 2008, 2009… [over the] last several years…
Around $100 billion of Iran’s reserves are locked up in foreign accounts today. If we do allow Iran to repatriate some of its money from these accounts during the initial phase, it won’t be anywhere near enough to relieve the underlying stress that we’ve brought to bear against the Iranian economy…
Iran is isolated from the international banking system due to the intricate web of overlapping international sanctions we have put in place on Iran’s banks and the Iranian Government’s financial activities. Because of this, Iran cannot easily move money around the world. So even with limited access to some of their funds, Iran will have a difficult time both moving and utilizing this money. The commonplace principle that all money is fungible just doesn’t apply to Iran today...