Many exchange houses in the UAE are scaling back their exposure to Iran in a bid to save themselves from the wrath of US sanctions, financial sources in the country suggested.
“We have stopped transactions with Iran because it’s so difficult with the new regulations brought in by the US,” Mohammad Al Ansari, the chairman and managing director of Al Ansari Exchange, said in an interview.
He also said that despite the fact that there is no law that bans transactions with Iran, nobody is willing to be blocked by the US financial system. The forex company chief revealed that several exchange houses in the country are curtailing their exposure to Iranian currency as the economic embargo is denting the value of the rial forcing it into a free fall.
According to The World Bank estimates, Iran received $1.3 billion in shape of remittances last year, from Iranians living abroad including in Britain, Canada, France, Germany and the United States.
Washington has vowed to cut off Iran’s access to the world’s financial system by imposing sanctions on foreign banks that deal with Iran’s central bank to facilitate oil purchases.
US measures against the Islamic Republic forced Dubai’s Noor Islamic Bank to sever its relationships with two Iranian banks, Bank Saderat and Bank Melli in December last year.
Iranian central bank governor announced last month it would allow the use of gold as a form of payment for oil sales, a move seen by economists as an attempt to circumvent US-led economic embargo.
But widening range of sanctions, especially on remittance channels, is having an adverse affect on the Iranian masses who have no links with the country’s government or nuclear programme. “You don’t want to antagonise the Iranian population at home in Iran by closing down that channel,” said Tim Plews, a partner at Clifford Chance, a law firm.