The collapse of the Toman after the US sanctions .. Will it make Iraq's economy on the verge of impasse?

As soon as President Donald Trump announced his country's withdrawal from Iran's nuclear deal in 2015 and the reinstatement of US sanctions on Tehran, the Iranian toman broke down in an unprecedented manner against foreign currencies, bringing the exchange rate of the dollar to 6800 to 7200 tomans.

The decision was accompanied by a significant rise in oil prices to a three-and-a-half-year high of more than 2 percent, as Trump's move is likely to limit Opec's exports of crude in a market already suffering from tight supply.

US crude rose to $ 75.76 a barrel on Wednesday, its best performance since November 2014. It was $ 76.66 a barrel at 0137 GMT, up $ 1.81 or 2.4 percent from its last close. .

US West Texas Intermediate crude futures rose 1.51 dollars, or 2.2 percent, to 70.61 dollars per barrel, also nearing their highest level since late 2014.

As soon as Trump ended, his national security adviser, John Bolton, announced that reinstatement of US sanctions linked to Iran's nuclear program would immediately apply to new contracts, adding that foreign companies had a few months to "get out" of Iran.

The US Treasury Department said the United States would re-impose a wide range of sanctions on aircraft exports to Iran, trade in minerals, sanctions targeting the Iranian oil sector and transactions with its central bank, and any efforts by Tehran to obtain US dollars.

A move in which observers see a rise in the risk of conflict in the Middle East, raising uncertainty about the global oil supply, as well as the impact of the Iraqi economy market as a result of the demand of Iranian tourists to buy the dollar and this causes the crisis of foreign currency out of the country, As a result of the lack of tourists in religious areas, which rely heavily on Iranian visitors.

Iraq is Iran's economic outlet

"The withdrawal of the US from the nuclear agreement and the collapse of the Iranian currency again will affect Iraq in terms of imports of Iranian tourism, which will decrease in the coming days, this will increase the stagnation of the Iraqi markets and hotels, especially economic experts," Salam Samisem told The News. In religious areas that depend not least on Iranian visitors. "

"When the currency of a particular country falls, exports will increase directly, and imports from that country will become profitable, and thus increase the amount of Iranian exports to Iraq because of the neighborhood relationship and the political ties between the two countries."

"Iran will not find a way out but Iraq, as in 2009 when the economic blockade was intensified, Iraq was its only outlet," Smisem added.

And draws that: "Iraqi markets will be open to Iranian goods without rival, which will negatively affect the Iraqi economy and domestic goods, the fact that the importer below the quality level and less price."

A danger hovering over Iraq

A member of the Committee on Economy and Investment, Abdul Salam al-Maliki says in his speech to (One News) that: "A withdrawal from the nuclear agreement will have a significant return on the whole region, especially as the situation surrounding Iraq divided between supporters and opponents of this withdrawal."

"The region will be shaken in the event of another US decision that includes imposing sanctions, taking a stand, or strikes, or international interventions, and thus will affect the Iraqi arena directly," he said.

He added: "We will not allow to be a party to the conflict and we will remain neutral in the direction of pushing the threat from Iraq, and this requires that there is a vision of the Iraqi political leadership, and make decisions in accordance with the interests of Iraq and not the interests of States." Adding that the conflict will be fought between the strong to the point that there will be new axes formed in the Chinese-Iranian-Korean axis, or the China-Iran axis, and the axis of the European Union with the United States of America.

He stressed that: "The increase in demand for foreign currency will pose a real danger, especially as there are Mafiyat control in this area, in addition to the Central Bank did not control the sales and purchase, and the presence of parties fraud, either in forged invoices, or buy unreal quantities of materials according to Invoices paid to the Central Bank and pay the money on the basis. "

"We are surprised by the decision of the Central Bank to increase the share of banks and this is not deliberate, because the foreign currency enhances the country's economic capacity and exit transactions with Turkey up to $ 18 billion, and with Iran $ 12 billion adversely affect the economy." Calling on the government to limit unnecessary imports and that there is a regulation and control of imports.

The impact of toman decreases is limited

"The effect of the decline in the Iranian currency is limited, the pressure on the dollar's demand may increase sometimes, but it will not reach the exit of the hard currency from the country, but it will witness," said Majid al-Suri, a member of the Economics and Investment Committee. She got up a bit. " Pointing out that the central bank is in control of the situation and can equip the market with all its requirements

"US pressure will increase on Iran, so it only has to reactivate its relations with countries that have a good relationship with it, to look for outlets for economic cooperation and unloading the goods, and only Iraq will find an outlet," he said.

International reactions

In the past two weeks, French President Emmanuel Macaron, German Chancellor Merkel and British Foreign Minister Boris Johnson have sought separate visits to Washington to persuade the US president to reverse the decision to withdraw from the nuclear deal. But all European attempts and McCron's recent attempt by telephone hours before Trump's announcement of the resolution was not successful.

"The decision to endanger the nuclear deal without any violation by Iran is a terrible mistake," he said in a statement on his official Facebook page.

The United Arab Emirates and Saudi Arabia have welcomed the imposition of sanctions on Iran. The Kingdom said in a statement published on Al Arabiya television channel : "The Kingdom supports and welcomes the steps announced by US President Donald Trump regarding the withdrawal of the United States from the nuclear agreement, and supports the declaration of imposing economic sanctions on Iran , Which has already been suspended under the nuclear agreement . "

Iranian President Hassan Rowhani said his country would stay in a nuclear deal without the United States, provided Iran was assured within weeks that it would get full concessions from the deal.

EU foreign policy chief Federica Mujerini called on the international community to abide by the nuclear deal with Iran.

For his part, a spokesman for Turkish President Recep Tayyip Erdogan said that America's decision to withdraw unilaterally from the agreement of Iran will destabilize and cause new conflicts.

The sanctions imposed by the United States and the European Union on Tehran in early 2012 over its nuclear program caused Iranian oil exports to drop from a peak of 2.5 million bpd before sanctions to just over 1 million bpd.

The Iranian Toman has witnessed a collapse on April 10, after it announced the exchange centers in different cities of Iran to close its doors to the "inability to buy and sell foreign currency at the prices set by the government."

The authorities also closed 80 exchange shops in Tehran, while arresting 39 traders working in the foreign exchange market, according to the spokesman of the Internal Security Forces of Iran Brigadier Saeed Muntader al-Mahdi.

Article Credit: https://oneiraqnews.com/
Special Thanks to Vernell Washington!!