According to an announcement by the Bank for International Settlements (BIS), Iran regime’s deposits with foreign banks decreased by $3.5 billion to approximately $12.7 billion at the end of the third quarter of 2023. This significant reduction, particularly in deposits with non-banking financial institutions, is linked by experts to the transfer of Iran’s blocked assets from South Korea to Qatar.
Despite the Iranian regime’s claims of full access to the transferred resources in Qatar, delays have been reported in accessing the country’s foreign exchange resources. Ehsan Khandouzi, the regime’s Minister of Economic Affairs and Finance, acknowledged delays in opening LCs (Letters of Credit), pointing out that the first LC has been initiated, but others have faced delays.
The United States House of Representatives approved a plan in December 2023 to block $6 billion of Iranian assets in Qatar. The Washington Post reported that the U.S. and Qatar agreed to withhold Iranian regime access to these funds until an investigation into the Hamas attack on Israel is completed.
Mohammad Reza Farzin, the head of the Central Bank of Iran, claimed that Qatari banks and SWIFT brokers would handle all payments, and an official letter from Qatari authorities had been received. However, reports suggest challenges for the regime in accessing these resources, impacting the supply of foreign currency for essential sectors, such as the import of livestock inputs.
Importers of livestock inputs have raised concerns about the prolonged process of currency allocation, with queues growing to several months. This situation could potentially lead to an increase in chicken prices in the market, affecting people’s livelihoods.
The reduction in Iran’s reserves and deposits with foreign banks indicates an impending economic challenge. With limited foreign exchange reserves and stable sanctions, the country might face difficulties in foreign exchange supply, potentially resorting to rationing. Current reserves are projected to cover only six months’ worth of imports for basic goods and medicine.
Experts warn that the decline in foreign deposits and constraints on foreign currency provision could have a significant impact on the daily lives of the Iranian population in the near future. The situation suggests a potential economic tsunami for Iran, with uncertainties about improving conditions and economic prospects.
