Highlights of the week

-Iran cut off from SWIFT international clearing house on the eve of Iranian New Year

-Better close than angry: Supreme Leader retains Rafsanjani as chairman of Expediency Discernment Council

-From torture chambers to social security: political controversy over appointment of Tehran’s former attorney general as Social Security Foundation chief

-World AIDS Day removed from Islamic republic’s official calendar despite continuing increase in number of AIDS cases

-Debate resumes on use of goldfish on Nowrooz

Iran cut off from SWIFT international clearing house on the eve of Iranian New Year

SWIFT’s decision to cut off dozens of Iranian banks and financial institutions from its systems beginning March 17 was not widely covered on Iranian media, which mostly provided brief reports on this new development.

Top Iranian officials also made few comments on the decision made by SWIFT, after in recent weeks a number of banking officials dismissed the possibility of Iran being cut off from the clearing house. This week former Intelligence Minister Ali Fallahian warned the West that Iran will respond to its disconnection from SWIFT using all means it has available, and said that cutting off Iran from the network is tantamount to closing international waterways.

Mahmoud Ahmadi, director of the Central Bank, recently commented on the possibility of Iran being cut off from SWIFT, saying that the country had prepared in advance for such a development. Speaking at a conference on electronic banking held in Tehran in late February, Ahmadi said that Iran had already found alternative solutions that would allow it to deal with sanctions imposed by SWIFT.

A Saderat Bank official also dismissed the possibility of Iranian banks being cut off from the network, saying that this would harm Western countries first and foremost. In an interview to Fars News Agency, Bahaeddin Hosseini Hashemi said that many European and American companies conduct large-scale banking transactions with Iran using SWIFT, and that cutting off Iranian banks from the system would be highly problematic for these companies.

In contrast, Mohammad-Reza Behzadian, former chairman of the Iranian Chamber of Commerce, warned about the possible repercussions of Iran’s disconnection from the international clearing house. In an interview given to the Iranian Diplomacy website, Behzadian said that, with Iranian banks cut off, even smaller banks that do not depend on the United States and were so far willing to continue cooperating with Iran will be unable to perform transactions with it. Behzadian estimated that it will be impossible for Iran to continue doing business securely using old-fashioned telecommunications systems, and that the country’s disconnection from SWIFT will lead to an increase in the costs involved in conducting international banking transactions.

As the economic sanctions tighten on Iran, this week the Tabnak website called on the government to increase its assistance to the productive sector. An editorial published by the website this weekend said that the Achilles heel of Iran’s economy is the persistent dependence of the agricultural and industrial sectors on raw material and capital import, and that production costs have so far increased by tens of percents.

The website warned that the local currency may continue to devaluate, putting more and more pressure on the productive sector, which depends on capital import. The website argued that the only way to contend with the sanctions is by economic development, which will allow the productive sector to become less dependent on importing machines and technological know-how from abroad. This, however, will take much time, and in the meantime the government needs to help the productive sector overcome the difficulties facing it.

Meanwhile, the Iranian rial set a new low this week, crossing the 2,000 tomans per dollar mark for the first time. ILNA News Agency reported that despite the restrictions recently imposed by the Central Bank on foreign currency trading, the instability on the market continues and many Iranians are having serious difficulties acquiring foreign currency for their trips during the Iranian New Year vacation, which started this week.

Better close than angry: Supreme Leader retains Rafsanjani as chairman of Expediency Discernment Council

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