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Nuclear deal with Iran doesn't mean business right now

Staff writer |
The deal to freeze Iran's nuclear program in exchange for some easing of international sanctions reached over the weekend doesn't mean the pent-up demand worldwide for business deals with that country can be met any time soon, a senior Treasury official said.

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"Our job going forward is to implement aggressively the sanctions that are in place and to continue to apply pressure on the Iranians," the official who asked not to be identified told reporters.

"There's an important psychological aspect here," the official said. "There's a lot of pent-up business interest in going into Iran and I'm sure there's hope out there that there's a light out at the end of the tunnel," the official said. "There may be a light at the end of the tunnel but it's a long tunnel and in the meantime we are going to ensure that what we agreed to... all the other sanctions, remain in place."

"Any business, any bank, any broker, anybody who thinks it's open season to go into Iran today I think is sorely mistaken," the official said. "We will enforce these sanctions and if someone thinks there's some there's some wink and a nod, that now it's time to jump back into Iran with both feet, they're just wrong."

Compared to Iran's budget deficit, which is about $36 billion this year, the economic benefit of the slight easing of sanctions, the official said, won't count for much.

"In relation to the depth of the economic distress Iran is currently facing, this package really is quite modest and economically insignificant," the official said. "It will not move the needle in terms of the bad economic indicators in Iran."

Iran's currency has declined 60% in the past few years. "It may spike up a little bit on this but it's not going to, by any stretch, regain the strength it was at a year and a half ago," he said.

"The vast bulk of our sanctions remain in place," he continued. Twenty-five Iran financial institutions have been isolated from the financial markets, having been denied access to the worldwide bank clearing system. Treasury will be monitoring closely to make sure the $4.2 billion by which Iran is allowed to increase its trade is spent on ordinary items not related to the country's nuclear or missile programs.

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