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Three Difficult Weeks Ahead, Says Central Bank Of Iran's Governor

Iran-Tehran-Abdol Nasser Hemmati,Governor of the Central Bank of Iran.

Iran's financial status will face a challenging stretch leading up to the U.S. elections on November 3, says the Governor of Central Bank of Iran (CBI), Abdol Nasser Hemmati.

"In the next three weeks, the pressure on Iran is to increase. We have informed Iranians that the risk in the domestic foreign exchange market is very high and that other things may happen," he said on Wednesday.

While hoping that Iran's frozen assets would be released abroad, Hemmati added, "We have to accept that the pressure on Iran will increase in the next three weeks" leading up to November 3.

Hemmati noted that in the last days of Trump's presidency, Washington's pressure on the Islamic Republic has increased.

President Trump withdrew from it in May 2018 and reimposed batches of economic sanctions on Iran.

Furthermore, last week, the United States placed eighteen Iranian banks on its sanctions list, which according to international media reports will nearly sever Iran's economic ties with the outside world.

Since last March, the U.S. dollar's value has doubled against the Iranian national currency, the rial.

On Wednesday, U.S. dollars were traded at 318,000 rials, compared to at 160,000 at the beginning of the current Iranian calendar year beginning March 20, 2020.

In its latest report, the International Monetary Fund (IMF) predicted that Iran's total exports, including oil, non-oil, and other services, would reach $46 billion this year. In the pre-sanctions era, that figure was over $100 billion.

The IMF also estimated that Iran's foreign exchange reserves would fall by about $19 billion, to $85 billion this year and $69 million next year.

However, most of Iran's foreign exchange reserves are frozen abroad, and Tehran is largely unable to inject foreign currency into the market and stop the rial's nosediving value.

Hemmati described his recent visit to Iraq "successful," and hoped that Baghdad would soon release five billion dollars of Iranian assets. Last Monday, the CBI governor announced that the Trade Bank of Iraq (TBI) had agreed to release Iran's export revenues and financial resources accumulated in Iraqi banks.

According to Hemmati, the assets are to be used to purchase essential goods for Iran, attributing shortages to the "oppressive and unilateral" U.S. sanctions.

Hemmati said that the Iraqi PM, Mustafa Al-Kadhimi, has vowed to follow up on the agreement's implementation weekly.

In recent months, Hemmati has frequently referred to such "vows" and "promises", but none of them have materialized so far.

Iran previously called on South Korea to release frozen Iranian oil export assets, with South Korean media reporting that between $7 billion and $8 billion of Iranian assets were frozen in the country's banks. The Chairman of the Iran-South Korea Joint Chamber of Commerce, Hossein Tanhaei, also estimated that Iran's assets in South Korea were between $6.5 and $9 billion dollars.

On Wednesday, Iranian news agencies also reported on a telephone conversation between Iran's Foreign Minister, Mohammad Javad Zarif, and his Japanese counterpart, emphasizing the "need to release Iran's blocked assets in this country."

It is not yet clear exactly how much of Iran's assets have been frozen in foreign countries, but Hemmati, on Wednesday, put the figure at "tens of billions of dollars."

"Even countries that have good relations with Tehran cannot cooperate with us under US pressure," Hemmati lamented.

The International Monetary Fund is scheduled to release a new report on Iran's economic situation and the Middle East next Saturday. The information will include foreign exchange reserves, foreign trade, and government debt.