- Although Iran is no longer ‘out in the cold’ politically speaking, the full reintegration of its economy into the international system is yet to gain noteworthy traction.
- Foreign companies’ hesitancy to enter the Iranian market is in part due to the inaccessibility of established banks, able to support and reassure international actors best positioned to do so. In place of these banks, informal and unregulated financial lender institutions have filled the gap and established a domestic presence that may prove difficult to remove.
- Rouhani’s second term will therefore be judged on his ability to address this issue and ensure that Iran maximizes the benefits he promised Iranians as a result of signing the landmark nuclear deal in 2015.
Bank Offices Mushroom in Iran
One of the main targets of the nuclear deal was not only to get the international sanctions removed, but to reconnect Tehran’s economic development, trade and financial institutions to the world’s banks.
Despite promises that in exchange for Iran’s compliance to the nuclear deal, the country’s banks would be reintegrated into the international financial system, there are still no direct international transactions possible with Iranian banks. Major international banks remain wary of U.S. sanctions under Trump, and fear the Treasury’s heavy fines, were they to be found making transactions with institutions or individuals that remain sanctioned by the United States.