The Iranian rial fell to a record low this weekend, largely in response to President Trump’s appointment of John Bolton – seen as hawkish on Iran – to serve as his national security advisor. FDD experts Richard Goldberg and Saeed Ghasseminejad argue that the administration should use Iran’s economic unrest to its advantage in shaping tougher foreign policy towards Iran – including re-imposing sanctions.
An excerpt from the piece follows:
“With the rial already under so much pressure, the re-imposition of sanctions on the Central Bank of Iran could push it into freefall. Under the sanctions law applied prior to the nuclear deal, foreign financial institutions are generally prohibited from engaging in transactions with the Central Bank. In effect, the Bank’s foreign-held accounts are put on lock down, barring the regime from accessing its foreign exchange reserves. On paper, Iran may get paid for its oil but the money sits in the purchaser’s country and is only available for Iran to buy goods from that country in the local currency. Without access to these reserves, the regime would find it much harder to defend the rial.
“In January, President Trump announced that he was suspending sanctions against the Central Bank of Iran for the last time. Trump warned that unless Europe agreed to help him fix the nuclear deal and address the ever-growing list of malign Iranian behavior, he would bring back America’s toughest economic weapon. These sanctions, if re-imposed, may also represent the greatest opportunity to regain leverage over the regime on issues like human rights abuses, ballistic missiles, terrorism, and regional expansionism.”
Read the full op-ed from The Hill here.
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