WASHINGTON: A precipitous drop in Iran’s currency, the riyal, shows that sanctions are cutting “deeper and deeper” into its economy, the United States said Monday, reiterating Iran must rein in its nuclear program.
The riyal plunged against the U.S. dollar in open-market trading Monday, and has lost more than a quarter of its value over the past week.
The United States and its allies, who accuse Iran of seeking to develop nuclear weapons despite Iran’s insistence that its atomic program is peaceful, have tightened sanctions this year, notably via a European Union embargo on Iranian oil and U.S. sanctions targeting banks that deal with Iran’s central bank.
“Our understanding is that the Iranian currency has dropped to a historic low today against the dollar in informal currency trading – this despite some frantic efforts by the Iranian government last week to try to prop it up, rearrange the way it dealt with these issues,” State Department spokeswoman Victoria Nuland told reporters in Washington.
“From our perspective, this speaks to the unrelenting and increasingly successful international pressure that we are all bringing to bear on the Iranian economy. It’s under incredible strain,” she added.
Sanctions are “cutting deeper and deeper into the Iranian economy and this is an important factor in trying to change the calculus of the Iranian leadership,” she said.
The United States and other countries are seeking to intensify pressure on Tehran “so that it will understand that the international community is not going to tolerate Iran with a nuclear weapon,” she added. “They have to make a choice.
“Iran is increasingly cut off from the global financial system, significant amounts of Iranian oil are also coming off the market,” she told journalists.
“The currency is plummeting and firms all over the world are refusing to do business with Iranian companies,” she insisted.
“These are the most punishing sanctions we have ever been able to amass as an international community and they are very important for trying to get Iran’s attention on the important denuclearization work.”
Officials said after talks held at the United Nations last week that the European Union and United States are now set to toughen the sanctions while seeking to hold back Israel from a military strike.
The European Union will be first to step up sanctions as part of the international campaign of pressure alongside increasingly frustrating efforts to negotiate a halt to Iran’s uranium enrichment efforts. “What we will do next is intensify sanctions,” a top Western official close to talks said on the sidelines of the U.N. General Assembly.
European foreign ministers are scheduled to meet in Luxembourg on Oct. 15 to discuss the measures.
“We don’t think that Iran would ever have come to the P5+1 negotiating table at all if they weren’t under the kind of pressure that we are talking about,” Nuland added, referring to the Western powers leading talks with Iran.