Bahonar: The Release of Assets Will Not Have a Determining Effect on Iran's Economy

Mohammad Reza Bahonar, the Deputy Speaker of the Iranian Parliament, stated that "30 to 40 percent" of the country's economic problems are influenced by sanctions, while the remaining issues are "structural." According to a report on Sunday, July 25, by the Islamic Republic of Iran Broadcasting (IRIB), Bahonar also mentioned that the release of Iran's frozen assets will not have a "determining" effect on the country's economy. He emphasized that $30 billion of these assets is usable and should not be utilized for imports. Previously, varying statements regarding the impact of sanctions on Iran's economy have been made by government officials and economic experts. Iranian President Hassan Rouhani stated on June 14 that due to sanctions, every foreign product in Iran is "at least 10 to 15 percent" more expensive. On June 6, he also stressed that "the oppressive sanctions must be lifted for investment to come, and to solve issues related to the environment, youth employment, industry, society, and drinking water, to increase water resources, and to revive banks." Rouhani's statements drew criticism from several appointees of Ayatollah Ali Khamenei, the Supreme Leader of the Islamic Republic, including the Head of the Judiciary and the Chairman of the Assembly of Experts. Meanwhile, some Iranian economic experts, while acknowledging the positive impact of lifting sanctions on Iran's economy, have advised government officials not to "exaggerate" the positive effects of sanction relief. In this context, economic expert Saeed Leilaz stated on Sunday that there should be no "wishful thinking" about the post-sanction days. According to Leilaz, even if Iran's oil exports increase to two million barrels per day, the revenue from oil sales will not reach the level of 2011, and the economic situation next year will be "even harder than the worst year of sanctions." Iran and six world powers reached a comprehensive agreement on July 13 to resolve Tehran's nuclear dispute, under which Iran agreed to limit its nuclear program in exchange for the lifting of most international sanctions against it. Meanwhile, the Governor of the Central Bank of Iran stated on Sunday that it is estimated that lifting banking sanctions will take "four to five months." However, he did not provide an explanation for the need for this duration to lift banking sanctions. According to IRNA, Valiollah Seif also emphasized that $23 billion of Iran's frozen assets will be deposited into the treasury upon release and will not create new liquidity, while selling this currency can "accumulate liquidity." Additionally, Rouhani emphasized that the foreign currency resources of the government and the Central Bank, which will be freed according to the nuclear agreement, should be directed "towards infrastructure and production activities and the growth of the national economy." Government and Central Bank officials have announced that Iran's total frozen foreign exchange reserves abroad are about $100 billion, while stating that $29 billion of these assets belong to the government and can be spent, but the remainder is funds deposited into the Central Bank's account and does not belong to the government. Nevertheless, some media in Iran have pointed out the impact of the release of the Central Bank's foreign exchange reserves, stating that these reserves are a tool for the Central Bank to maintain the value of the national currency. For instance, the newspaper Donya-e-Eqtesad reported that after accessing its foreign exchange reserves, the Central Bank can create "openness in the market" by injecting this currency into the market and "freezing its rial resources in its accounts."