Iran will is all set to receive an estimated $32 billion of unfrozen assets after sanctions were lifted under its nuclear deal, the central bank said earlier yesterday, in a boost to an economy sapped by years of isolation.
The unblocking of funds, which had been held in foreign banks, comes after the UN atomic watchdog confirmed at the weekend that Iran had complied with measures in the July atomic accord.
The assets will be kept “in centralised and safe accounts” abroad, central bank chief Valiollah Seif was quoted by state television as saying, adding that the money could be used to pay for imports.
Seif said that $28 billion (25.8 billion euros) would go to the central bank and $4 billion “will be transferred to the state treasury as the share of the government”.
Iran hopes that steps to ease its isolation, including the re-admission of its banks to the SWIFT system of international transactions, will inject new vigour into the economy.
But opening up to the world cannot completely fix the economy, President Hassan Rouhani said Tuesday in a televised speech, warning that the “difficult road has just begun”.
“Today is just the start for an innocent human who was kept chained unjustly by the hands and feet for 12 years,” he said.
“Sanctions are gone but there is a long way between sanctions and development,” he said, speaking to an economics conference in Tehran.
“Today, our main problem is unemployment and recession, the lack of a booming economy and many structural and economic deficiencies,” he added.
Iran’s economy suffered greatly under the international sanctions that since 2006 targeted the Islamic republic’s nuclear programme and financial systems.
Under the previous hardline government of Mahmoud Ahmadinejad, inflation topped 40 percent. But moderate Rouhani, whose election in 2013 heralded more than two years of nuclear negotiations with world powers, managed to curb inflation to 13 percent.
Iran needs annual foreign investment of $30-$50 billion to reach an eight percent growth target and cash in on sanctions relief, the president said Sunday.
“Untapped potential in many industries indicates that domestic demand alone cannot drive the economy” towards that goal, he said, signalling a shift in policy.
Iran announced a major boost of 500,000 barrels per day in oil production on Monday — a move Tehran had long planned for once its nuclear deal with world powers took effect.
The next budget starting in March is based on a projected oil price of $40 per barrel price and exports of 2.25 million barrels per day.
Iran, a member of the Organization of Petroleum Exporting Countries (OPEC), now produces 2.8 million barrels of oil per day and exports just over one million barrels.
Low oil prices and years of US and European Union sanctions that barred much of Iran’s foreign oil sales hammered its income from crude.
But despite global prices falling below $30, Iran intends to increase production to recoup lost market share. Tehran aims to seize the momentum of its thawing relations with the outside world to attract foreign investment.
EU foreign policy chief Federica Mogherini, who was actively involved in the negotiations that led to the nuclear accord, said Monday that she planned to travel to Iran soon.
“This opens the way for a major European Union investment in our bilateral relations that we will need to explore with the Iranian authorities to make sure this covers their interests, our interests and that we coordinate well among Europeans,” she said.
