Iran Has $100 Billion Abroad, Can Draw $4.2 Billion Under Agreement

 @MeaganKaym.clark@ibtimes.com on January 17 2014 9:27 AM
Foreign Minister Mohammad Javad Zarif at Iran nuclear talks in Geneva
Iranian Foreign Minister Mohammad Javad Zarif, flanked by members of his delegation, attends talks over Iran's nuclear program in Geneva, Nov. 22, 2013. Reuters

Iran has amassed about $100 billion in foreign exchange assets around the world, and under a nuclear agreement signed last November by six world powers, it can withdraw $4.2 billion, a senior U.S. administration official told Reuters on Friday.

That unnamed official said the money and assets are held in various countries, and much of the amount is Iran’s oil revenue. Sanctions have prevented Tehran from freely spending the money and barred it from most of the global banking system, significantly limiting the country’s trading, shipping and payments for the last two years.

In October, Iran’s president, Hassan Rouhani, said publicly that the country’s treasury was almost empty. The chairman of the Majlis Planning and Budget Committee, Gholam Reza Meshbahi Moqaddam, responded to the media by saying $100 billion of Iran’s money is frozen in foreign banks, and if released through diplomatic efforts, not only “will we not have any problems, but also many problems will be resolved,” as reported by the Tehran Times.

An agreement reached on Nov. 24, 2013, between Iran and the major powers will give Tehran limited sanctions relief for six months, about $7 billion, for Iran to restrain its nuclear program. Of that amount, $4.2 billion is Iranian revenue held abroad and currently blocked. 

Iran will choose where to draw the funds from, and Western authorities will facilitate the transfer in a series of installments in the next half-year if Iran delivers on its share of the deal.

The six-month agreement, which takes effect Monday, is meant to provide time for more negotiations on a final settlement of the nuclear dispute and also halts Western efforts to further cut Iran’s oil exports, which have dropped by about 60 percent since 2012. But even if the oil price falls during the six-month agreement, the volume of Iran’s oil exports will not increase, the U.S. official told Reuters.

The official also said now is not a good time to do business in Iran, because sanctions will still make transactions difficult.

Iran still denies Western allegations that it has been trying to develop the capability to build nuclear weapons. 

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