Iran feels the heat of Western sanctions over nuclear program

Iran’s currency has hit record low against the US dollar in street trading and observers believe it is a direct effect of the sanctions imposed by the United States and its Western allies against Iran for pursuing a controversial nuclear program. It is for the first time that Iran’s rial has gone so low against the US dollar and the economy of the country is in dire straits. The United States and its Western allies have banned the import of Iranian oil and are also pursuing a number of other countries across the globe to do so.

The United States and its European allies believe that Iran can only be dragged to the negotiating table by slapping tough economic sanctions on it. The move has succeeded as well, but failed to clinch any positive result from the negotiations. Three rounds of dialogue between six world powers and Iran have born no fruit, but even then the Obama administration believes the issue could be resolved through diplomatic means. The six world powers - the United States, Russia, China, Britain, France and Germany - are still desirous to have more dialogue with Iranian representatives to sort out the issue of the much-talked-about nuclear program.

The three rounds of dialogue have been held in Istanbul, Baghdad and Moscow. In all three, Iranian representatives demanded that for meaningful dialogue the US and its allies should first remove restrictions on the import of Iranian oil. However, the world powers declined to accede to the demand, so the deadlock still persists - which is not a good sign for the future of the world, especially the Middle East.

The US and its allies suspect that Iran is developing nuclear weapons and the suspicions get weight when Iran refuses to allow International Atomic Energy Agency (IAEA) inspectors entrance into its nuclear plants.

It may be pertinent to mention here that Iran does not deal in US dollar but for purchases of medicines and some food items. Iran has been using euro for official businesses. The current official rate is 12,260 rials to the dollar. Economic experts and a number of discerning observers believe that if sanctions continue to be effective against Iran, the economy of the country may collapse in the next couple of years. The US believes that Iranian regime will be ultimately forced to dialogue over its controversial nuclear program.

An Iranian semi-official news agency called Mehr said that the value of rial rose slightly late Sunday, but still it fails to make any significant impact on the improvement of the country’s economy. French and German foreign ministers announced on Friday that the European Union was drafting a new round of sanctions against Iran, lamenting that the dialogue to resolve the issue of the controversial nuclear program has failed badly.