Wall Street Journal Report: Businesses in Iran Cannot Survive Under Threat of Sanctions
New US sanctions have created an economic shock across Iran even before they were implemented.
Following President Donald Trump’s withdrawal from the Iran nuclear deal in May, carpet manufacturers, exporters and shopkeepers in Iran are increasingly struggling to exchange dollars for needed imports. Foreign companies are terminating contracts and large foreign banks, many of which have paid billions of dollars in fines to the United States over the past five years, fear sanctions.
Even when Iranian companies are able to finance imports, the low value of the rial against the dollar has made imports so expensive that they prefer to halt production and cancel contracts.
The sanctions will be implemented in two phases: sanctions against gold and precious metals trade, rial exchanges, and the automotive sector will begin on August 5. Broader sanctions against shipping, oil exchanges, and foreign financial institutions' interactions with the Central Bank of Iran will begin on November 4.
This situation has been a challenge for Iran’s political leadership. Iran’s economy, despite the lifting of sanctions following the ratification of the JCPOA, suffers from double-digit unemployment and inflation. Growing dissatisfaction with the economic situation and mismanagement is evident in nationwide protests this year. The unrest has forced the government to avoid economic isolation.
Source: Voice of America
