President Hassan Rouhani promised Iranians on Tuesday the government would be able to handle the economic pressure of new US sanctions amid reports of a second day of demonstrations in protest at financial hardship and a weakening rial.
Fars news agency reported that parts of Tehran’s Grand Bazaar were on strike for the second day running, after traders massed outside parliament on Monday to complain about a sharp fall in the value of the national currency.
Defending his economic record, Rouhani said the government’s income had not been affected in recent months, and the fall in the rial was the result of “foreign media propaganda.”
“Even in the worst case, I promise that the basic needs of Iranians will be provided. We have enough sugar, wheat, and cooking oil. We have enough foreign currency to inject into the market,” Rouhani said in a speech broadcast live on state television.
Rouhani, who is under pressure to change his economic team, said the fresh US sanctions were part of a “psychological, economic and political war”, adding that Washington would pay a high price for its actions.
“Withdrawal was the worst decision he (Trump) could make. It was appalling. It hurt America’s global reputation,” he said.
Washington is to start reimposing economic penalties on Tehran in coming months after US President Donald Trump quit an agreement between major world powers and Iran in which sanctions were lifted in return for curbs on its nuclear programme.
This may cut Iran’s hard currency earnings from oil exports, and the prospect is triggering a panicked flight of Iranians’ savings from the rial into dollars.
The International Monetary Fund estimated in March that the government held $112 billion of foreign assets and reserves, and that Iran was running a current account surplus. These figures suggested Iran might withstand the sanctions without an external payments crisis.
