The current state of Iran’s economic standing is not looking very promising. For the past year there have been protests across the nation, with protesters pushing back against the everyday hardships they face. Just recently an Iranian protester, Hamid Rasouli, was killed by security forces. Iranian forces demanded that if Rasouli’s family wanted his body back that they would have to pay them nearly $8,000 and say that their son was a member of a state militia who died at the hands of protesters.
This is just another example of how dire a situation the Iranian people are living with on a daily basis. The US has been hurting Iran by imposing economic sanctions on the country, forcing Iran to look towards other sources of economic opportunity besides the oil industry. Gas prices have been spiking in Iran, which has contributed to the protests. Iran is in a tough spot by trying to cut fuel demand at home to generate more revenue of selling more fuel abroad.
Iran is feeling the economic squeeze in particular through their foreign exchange reserves. These reserves represent the emergency cash that countries use to pay off trade debt, safeguard currency and stave off financial turmoil. The International Monetary Fund estimates that Iran’s foreign exchange reserves are currently $86 billion. This number is lower than in 2013 when Iran’s poor economy forced them to negotiate on their nuclear program. However, the $86 billion is quite misleading. Classified US intelligence suggests that Tehran only has access to about 10% of those cash reserves, as sanctions against the financial sector prevent the government from tapping into them.
It will be interesting to see just how desperate Iran is over the coming years. As their oil exports continue to decrease while already in a 3% trade deficit, Iran is running out of economic options to uplift their struggling economy. If they reach a breaking point it could mean good news for the US and the West as Iran would be forced to make concessions on their nuclear program and striking down homegrown terrorism.
Sources:
https://www.wsj.com/articles/iran-cut-off-from-vital-cash-reserves-is-approaching-economic-peril-u-s-says-11575369002
https://www.wsj.com/articles/iran-takes-hard-line-to-keep-protests-down-11575288000?mod=article_inline