Syria Devalues Currency As New US Sanctions Hit

A boy pays a merchant with a Turkish lira banknote at a shop in the town of Jindayris, in the Afrin region of the northern Syrian rebel-held province of Aleppo, on June 10, 2020. Rami al SAYED / AFP.

 

Syria’s central bank devalued the Syrian pound on Wednesday giving in to weeks of depreciation on the black market as new US sanctions took effect.

The central bank raised the official exchange rate from 704 to 1,256 Syrian pounds to the dollar, in a statement published on its social media pages.

The previous rate had been in force since March.

Earlier this month, the war-torn country’s currency hit a record low on the black market of around 3,000 pounds to the dollar, sparking rare protests, before appreciating slightly after an apparent injection of dollars.

On Wednesday, the rate on the parallel market stood at around 2,600 to 2,800 pounds to the dollar, traders told AFP.

The devaluation comes as the United States prepares to implement new sanctions this week under the Caesar Act, targeting foreigners doing business with the Damascus government, as well as reconstruction of the country.

Zaki Mehchy, a senior consulting fellow at the London-based Chatham House think tank, said the central bank was trying to minimise the gap between the official and black market rates.

“It is trying to encourage people to use the official channel instead of the black market,” he said.

But the pound would probably continue its slide, punctuated by short periods of appreciation, he said.

Syria’s economy has been battered by nine years of war, and is now reeling from the knock-on effects of a financial crisis in neighbouring Lebanon that has stemmed the flow of dollars into government-held areas.

Analysts have said the recent lows on the black market are likely due to worries ahead of the introduction of new US sanctions, and the sudden fall from grace of tycoon and cousin of the president, Rami Makhlouf, which has set other top businessmen on edge.

The Damascus government has long blamed the country’s economic crisis on international sanctions.

Last week, President Bashar al-Assad sacked his prime minister of four years after criticism of the government’s handling of the crisis.

Before the conflict, the exchange rate stood at 47 Syrian pounds to the dollar.

Russia Vows To Finish Gas Pipeline Despite US Sanctions

(FILES) In this file photo taken on March 26, 2019, a man works at the construction site of the Nord Stream 2 gas pipeline in Lubmin, northeastern Germany. 
Tobias SCHWARZ / AFP

Russia on Wednesday vowed to complete construction of a major gas pipeline under the Baltic Sea, despite approval by the US Senate of sanctions that have also angered European states led by Germany.

The Nord Stream 2 pipeline between Russia and Germany, a key part of Moscow’s export strategy for state energy giant Gazprom, aims to deliver Russian gas to Europe via the Baltic Sea.

“We expect that this project will be completed,” Kremlin spokesman Dmitry Peskov told reporters, slamming the sanctions as a “flagrant violation of international law”.

“Moscow does not like such actions, and neither does the European capitals. Berlin does not like this and neither does Paris,” he said, suggesting that sanctions would only lead to higher gas prices for European consumers.

The sanctions against companies working on the project, which were inserted into Washington’s huge annual defence spending bill, easily passed both the US Senate and House of Representatives.

The bill now goes to President Donald Trump, who is widely expected to sign the legislation.

US lawmakers have warned the Nord Stream 2 pipeline would bring Russia billions of dollars and vastly increase President Vladimir Putin’s influence in Europe at a time of heightened tensions between Moscow and the West.

READ ALSO: US Congress Approves Sanctions To Halt Russia-Europe Gas Pipeline

– ‘Holding business hostage’ –

The European Union and Germany have strongly urged the US not to impose sanctions, saying that European energy policy should be decided in Europe.

The 9.5-billion-euro ($10.6-billion) pipeline is set to double shipments of Russian natural gas to Germany.

German Chancellor Angela Merkel, speaking in parliament, said Berlin opposed “extraterritorial sanctions” under any scenario and said she saw “no other possibility other than holding talks”.

MEP Manfred Weber, who heads the European People’s Party in the European Parliament, said that the United States was not behaving correctly on the matter.

“You can’t undertake sanctions against a friend and a partner and hold business as a hostage,” he told the Funke Media Group, adding that Germany had to work in coordination with its European partners.

One major contractor that could be hit by the sanctions is Swiss-based pipeline laying company Allseas, which has been hired by Gazprom to build the offshore section.

– ‘Political debates’ –

Russia had hoped to launch the pipeline, which is 80 percent finished, in late 2019 but the completion has been delayed by difficulties in obtaining permits from Denmark.

Russian officials have said they expect the pipeline to become operational in 2020.

The 1,230-kilometre (764-mile) Nordstream 2 pipeline will expand the existing Nord Stream 1 project linking Russia to Germany whose lines were inaugurated in 2011 and 2012.

The pipeline is viewed with suspicion not only by the US, but also by Ukraine, Poland, and the three Baltic States. Ukraine, the traditional hub for the transit of Russian gas to Europe, risks losing out on significant transit fees.

A spokesman for Nord Stream 2 said the consortium was “aware of the ongoing legislative procedure in the US and the political debates” but added: “We cannot comment on any implications for our project.”

Half of the project is financed by Gazprom, with the rest covered by its European partners — Germany’s Wintershall and Uniper, Anglo-Dutch Shell, France’s Engie and Austria’s OMV.

Iran President Announces Budget Of ‘Resistance’ Against ‘Crippling’ US Sanctions

A handout picture provided by the Iranian presidency on May 8, 2019, shows President Hassan Rouhani speaks during a cabinet meeting in the capital Tehran.
HO / Iranian Presidency / AFP

 

Iran’s President Hassan Rouhani announced Sunday what he called a “budget of resistance” to counter crippling US sanctions, weeks after a fuel price hike sparked nationwide protests that turned deadly.

Rouhani said the aim was to reduce “hardships” as the Islamic republic has suffered a sharp economic downturn, with a plummeting currency sending inflation skyrocketing and hiking import prices.

The US sanctions imposed in May last year in a bitter dispute centred on Iran’s nuclear programme include an embargo on the crucial oil sector whose sales Washington aims to reduce to zero in a campaign of “maximum pressure”.

READ ALSO: World Bank Now Reducing Lending To China After Trump Outburst

Rouhani told parliament that the budget, which includes a 15 per cent public sector wage hike, “is a budget of resistance and perseverance against sanctions”.

It would “announce to the world that despite sanctions we will manage the country, especially in terms of oil,” he added.

Rouhani said the 4,845 trillion rial ($36 billion at the current street rate) budget was devised to help Iran’s people overcome difficulty.

It would benefit from a $5 billion “investment” from Russia which was still being finalised, he said, without giving further details.

“We know that under the situation of sanctions and pressure, people are in hardship. We know people’s purchasing power has declined,” said Rouhani.

“Our exports, our imports, the transfer of money, our foreign exchange encounter a lot of problems.

“We all know that we encounter problems in exporting oil. Yet at the same time, we endeavour to reduce the difficulty of people’s livelihood.”

Rouhani said that despite the US sanctions his government estimated that Iran’s non-oil economy would “be positive” this year.

“Contrary to what the Americans thought, that with the pressure of sanctions our country’s economy would encounter problems, thank God we have chosen the correct path… and we are moving forward,” he said.

The budget announcement comes after fuel price hikes Iran announced in mid-November triggered deadly demonstrations across the country.

Officials in Iran have yet to give an overall death toll for the unrest in which petrol pumps and police stations were torched and shops looted.

London-based human rights group Amnesty International said at least 208 people were killed in the crackdown, but Iran has dismissed such figures as “utter lies”.

‘Reducing Hardships’

US President Donald Trump began imposing punitive measures in May 2018, after unilaterally withdrawing from an accord that gave Iran relief from sanctions in return for limits on its nuclear programme.

The United States has continued to ramp up its sanctions this year as part of a stated campaign of “maximum pressure” against the Islamic republic.

Iran’s economy has been battered, with the International Monetary Fund forecasting it will contract by 9.5 percent this year.

The sharp downturn has seen the rial plummet and inflation running at more than 40 percent.

In his speech, Rouhani only touched on a few areas of the draft budget for the financial year starting late March 2020, which must be scrutinised and voted on by parliament.

“All our efforts are geared towards reducing these hardships to some extent so it can be more tolerable,” he told deputies.

“I deem it necessary here to tell the honourable representatives that the criteria of our budget is still based on maximum pressure and continuation of America’s sanctions,” he said.

“This does not mean that the government will not take other steps, but at the same time this is our criteria and based on these criteria we have devised and executed the budget.”

The budget comes ahead of parliamentary elections in February.

AFP

Netanyahu To Press Pompeo For More Pressure On ‘Tottering’ Iran

Israeli Prime Minister Benjamin Netanyahu chairs the weekly cabinet meeting at his office in Jerusalem on December 1, 2019. Abir SULTAN / POOL / AFP

 

Israeli Prime Minister Benjamin Netanyahu travelled to Portugal Wednesday to meet US Secretary of State Mike Pompeo and call for increased pressure on the “tottering” Iranian government.

The two men will meet on Wednesday night in Lisbon, the US State Department announced.

Speaking before setting off, Netanyahu said US President Donald Trump’s sanctions against Iran were paying dividends and he would be urging Pompeo to take further steps.

“I think President Trump has placed tremendous pressures and sanctions on Iran,” he said.

“We’re seeing the Iranian empire totter. We see demonstrations in Tehran, demonstrations in Baghdad, demonstrations in Beirut. It’s important to increase this pressure against Iranian aggression.”

Israel, which has the Middle East’s sole but undeclared nuclear arsenal, has for years accused Iran of seeking to obtain nuclear weapons and strongly opposed a 2015 agreement designed to address the concerns of major powers.

Trump, a strong Netanyahu ally, unilaterally pulled the United States out of the deal in May last year and reimposed crippling sanctions.

Netanyahu, who is fighting for his political life after an indictment on graft charges, has hailed the Trump sanctions.

Israel believes they have squeezed the Iranian economy, prompting the government to raise fuel prices — sparking nationwide protests.

Lebanon and Iraq, both countries where Iran has significant influence, have also seen major demonstrations.

Netanyahu criticised European governments that have signed up to a barter system that would allow Iran to trade without fear of US sanctions.

AFP

Moscow Vows To Retaliate Over New ‘Anti-Russian’ US Sanctions

Russia Flag

 

Russia on Monday said it was “bewildered” by fresh US sanctions and vowed to retaliate following what it called an “anti-Russian attack”. 

The foreign ministry said the new sanctions on several Russians  — including a businessman tied to President Vladimir Putin and a disinformation operation accused of conspiring to manipulate the US 2018 midterm election — “will not go unanswered.”

“We urge American politicians to stop this useless sanctions game, the result of which is zero, and to return to the position of common sense,” the ministry said in a statement.

The financial sanctions, which target Russian financier Evgeny Prigozhin, some of his assets and the so-called Internet Research Agency, are the first to be taken under an executive order signed last year President Donald Trump seeking to punish foreign actors accused of interfering in US elections.

The US Treasury announced the sanctions on Monday.

The foreign ministry said the sanctions were part of an “internal political crisis” in the United States in which “Russian issues are deliberately used by part of the Washington establishment as a tool to achieve their own opportunistic goals.”

The sanctions marked the third time the US had added Prigozhin’s name to its list of foreign nationals formally barred from the US financial system, a move which freezes him out of much of the global financial system as well.

US prosecutors last year indicted the Internet Research Agency as well as alleged employees, charging them with a broad conspiracy to influence the 2016 elections by spreading disinformation in the United States via social media.

The US Treasury said Monday the agency had announced its intention to do likewise in the 2018 midterms by seeking to discredit candidates it viewed as hostile to Moscow.

There was no evidence they were successful in preventing voting, altering vote counts or disrupting vote tallying, the Treasury said.

AFP

Huawei Still Number Two Smartphone Seller Despite US Sanctions

The Huawei logo is displayed at a store in Beijing on December 6, 2018. The chief financial officer of China’s global telecommunications giant Huawei has been arrested in Canada and faces extradition to the United States, officials said, triggering a strong protest by Beijing, which called for her immediate release. PHOTO: FRED DUFOUR / AFP

Huawei remained the number two global smartphone vendor in the past quarter despite tough US sanctions imposed on the Chinese technology giant, market trackers said Wednesday.

The Chinese firm managed to boost its sales even as the overall market declined, remaining on the heels of sector leader Samsung and ahead of US-based Apple.

According to Strategy Analytics, overall global smartphone sales fell 2.6 percent to 341 million units in the April-June period.

Samsung increased its market share to 22 percent, helped by a seven percent rise in handset sales, mainly in the mid-range and entry segments. The South Korean giant stayed ahead of Huawei at 17 percent, and Apple at 11 percent of the market.

“Huawei surprised everyone and grew its global smartphone shipments by eight percent annually,” said Strategy Analytics executive director Neil Mawston.

“Huawei surged at home in China during the quarter, as the firm sought to offset regulatory uncertainty in other major regions such as North America and Western Europe.”

The research firm estimated that Apple, which released its results this week without details on unit shipments, saw an eight percent drop in iPhone sales in the quarter.

“Apple is stabilizing in China due to price adjustments and buoyant trade-ins, but other major markets such as India and Europe remain challenging for the expensive iPhone,” said Woody Oh, director at Strategy Analytics.

A separate report by Counterpoint Research offered similar findings, showing Samsung, Huawei and Apple in the three top spots as overall sales fell.

Analyst Tarun Pathak at Counterpoint said however the US ban on technology sales to Huawei will have an impact in the coming months.

“The effect of the ban did not translate into falling shipments during this quarter, which will not be the case in the future,” Pathak said.

Anthony Scarsella of the research firm IDC, which also issued similar findings, said the market is seeing signs of stabilizing.

“A key driver in the second quarter was the availability of vastly improved mid-tier devices that offer premium designs and features while significantly undercutting the ultra-high-end in price,” Scarsella said.

“Combine this with intensified and generous trade-in programs across major markets and channels, and upgrading now makes more sense to consumers.”

The surveys indicated Chinese makers Xiaomi and Oppo holding the fourth and fifth spots, largely due to sales in their home markets.

According to Counterpoint, the combined global smartphone market share of Chinese majors Huawei, Oppo, Vivo, Xiaomi and Realme reached 42 percent, the highest it has ever been.

Facebook To Cut Off Huawei In Compliance With US Sanctions

 

Facebook said Friday it would stop allowing pre-installation of its social networking apps on Huawei devices to comply with US sanctions against the Chinese technology giant.

The social media giant said it took the step after US President Donald Trump’s order barring Huawei from US technology exports over concerns that it works with Chinese intelligence.

“We are reviewing the Commerce Department’s final rule and the more recently issued temporary general license and taking steps to ensure compliance,” a Facebook spokesperson told AFP.

The California company said people with existing Huawei smartphones with Facebook apps will continue to be able to use and download app updates provided by Facebook.

The move by Facebook is the latest to isolate Huawei, which had become the world’s second largest smartphone vendor despite security concerns voiced in Washington.

Google last month said it would cut ties to Huawei, making it harder to obtain major apps from the US giant.

The Google decision would leave Huawei without the Play Store, the marketplace for most Android apps, and other elements of the mobile operating system.

Facebook – which is banned in China but has more than two billion users worldwide – said its decision would affect its core social network as well as applications such as Instagram, Messenger and WhatsApp, which each have at least one billion users.

Turkey Ready For US Sanctions Over Russian Missile Deal – Minister

 

Turkey insisted it would go ahead with its controversial decision to buy the S-400 missile defence system from Russia, saying it was preparing for any possible sanctions from the US.

Turkey’s push to buy the S-400 system has strained relations with the United States, a NATO ally, which worries about integrating Russian technology with Turkey’s Western equipment.

Defence Minister Hulusi Akar told reporters late Tuesday that Ankara was “preparing” for US penalties under the Countering America’s Adversaries Through Sanctions Act (CAATSA), which prohibits business with Russia’s state and private defence and intelligence sectors.

READ ALSO: Sri Lanka Extends Emergency A Month After Suicide Bombings

He added that Turkey was “fed up” with being just being a buyer of military equipment, and wanted to be involved in joint production and technology transfers.

“The idea that we always buy, you always produce, is finished,” he told reporters in Ankara.

President Recep Tayyip Erdogan on Saturday said Turkey and Russia would jointly produce S-500 defence systems after the purchase of the S-400 system.

Turkey has already sent personnel to Russia for training, Akar said, and the system could be delivered as early as June or July.

Last month, he said the S-400 would likely be used to protect the capital Ankara and Istanbul.

In a bid to force Turkey to cancel its S-400 deal, the US offered a renewed proposal in March for Patriots, its own anti-missile and anti-aircraft weapon system.

The US has said buying the S-400 could jeopardise Turkey’s involvement in the F-35 fighter jet programme, for which it provides some parts.

Akar said Turkey was still considering the offer but that there had been “general easing” in negotiations with the US on the F-35s and Patriots.

Relations have been tense over multiple issues, including US support to a Syrian Kurdish militia viewed by Ankara as terrorists, and the refusal to extradite a Pennsylvania-based Muslim preacher Fethullah Gulen accused of ordering a failed coup in Turkey in 2016.

AFP

Iran: OPEC Determined To Avoid ‘Energy Crisis’ – Barkindo

Barkindo
OPEC’s Secretary-General, Mohammed Barkindo

 

OPEC is determined to avoid a global “energy crisis” as some of its members are facing international sanctions and others struggling with unrest, the cartel’s secretary-general said in Tehran on Thursday.

“As an organisation, we will remain focused on our goal of avoiding an energy crisis that may affect the global economy,” Mohammed Barkindo said on the sidelines of an oil and gas exhibition.

READ ALSO: Nuclear Deal: Iran ‘Playing With Fire’ – Trump

The Organisation of the Petroleum Exporting Countries will pursue this policy “despite current troubles in several of its member countries,” he said.

His comments came as the end of US sanction waivers for purchases of oil from key OPEC member Iran was due to kick in on Thursday.

Venezuela, another cartel member, is also facing sweeping US sanctions and in the throes of political troubles while fighting rages between rival forces for control Tripoli, capital of oil-rich Libya.

Barkindo did not name any country but said some OPEC producers were “currently under unilateral sanctions” — a reference to Iran and Venezuela.

Another country “is also going through transitional challenges with all its potential consequences,” Barkindo said, also apparently about Venezuela where opposition leader Juan Guaido is trying to rally demonstrators against President Nicolas Maduro.

Another cartel member he said, alluding to Libya,  “is fighting day in and day out to avoid an all-out war”.

OPEC is “committed to staying united” and “not slip back into the chaos” it has faced in recent years, Barkindo said.

Iran, as a founding member of the organisation, has regularly slammed some of the cartel’s members for going along with Washington’s policies against Iran and lacking solidarity.

On Wednesday, Iran’s oil minister Bijan Namdar Zanganeh accused OPEC members he did not name of sowing “division” and threatening the cartel’s “disintegration”.

These countries — he said referring to Iraq and oil kingpin Saudi Arabia —  were “exaggerating” their production capacity to reassure markets after the US lifted sanction waivers for buyers of Iranian crude.

The end of the exemptions announced on April 22 has sparked fears of supply shortages and pushed prices up.

AFP

Iran Celebs Launch Petition Against US Sanctions

 

Iranian celebrities including Oscar-winning film director Asghar Farhadi and Grammy winner Kayhan Kalhor have launched a petition condemning US sanctions on Tehran and warning of the impact on ordinary people.

“Once again, the United States has imposed sanctions against Iran… Every Iranian will personally pay the price,” reads the petition, named “Voices Against Sanctions” and posted on change.org on Thursday.

A last tranche of US sanctions were reimposed on Monday following the decision by US President Donald Trump to pull out of the 2015 nuclear deal earlier this year.

“Politicians will come and go, but the fallout from their disastrous decisions will be a nightmare for generations to come,” said the petition, which had picked up nearly 5,000 signatures by Friday.

It was signed by Iranian filmmakers, musicians, activists and lawyers.

Farhadi has received two Academy Awards for Best Foreign Language Film, while musician Kalhor, a virtuoso on the kamancheh (spiked fiddle), won a Grammy in 2017.

AFP

Iranians Feeling US Sanctions ‘In Their Bones’

Iranians embark on a protest against government’s policies. Credit: AFP

 

The latest round of US sanctions on Iran’s vital oil industry may have just started on Monday but some Iranians say they have already become a basic fact of life.

“I don’t need the news to tell me that sanctions have started, I am feeling them in my bones,” said Farzad, a 65-year-old pensioner.

“Anyone who goes to the market to acquire their basic needs will feel the sanctions straight away,” he told AFP as headed to the Tajrish bazaar in northern Tehran for his weekly shop.

The last tranche of sanctions hit Iran on Monday, targeting its oil and financial sectors, following President Donald Trump’s decision in May to pull out of the 2015 nuclear deal.

Hit by months of economic turmoil since that decision, in part due to US pressure but also to long-standing problems in the domestic economy and banking sector, many Iranians were left nonplussed when the final sanctions hit.

“There have been sanctions forever, almost 40 years now, there is nothing new about that,” said Sogand, a retired college lecturer.

“America has power, so it bullies everyone. Not just us — they even bully the Europeans,” she added.

All over Iran, the mood is a mix of gloom and anxiety, defiance and anger.

“What we do is none of America’s business,” said Mehdi Mirzaee.

Lost cause 

His defiance came in spite of considerable personal hardship after his textiles workshop was forced to close over the rising price of wool.

“America has been hitting at us for the last 100 years, but we will never become their servants,” he said.

Others said they felt naive for having dared to hope their country’s international isolation would end with the nuclear deal signed with six world powers, including the US, in 2015.

“When the nuclear deal was signed, we Iranians were very happy. We thought everything would change for the better,” said Fereshteh Safarnezhad, a 43-year-old teacher.

“But unfortunately we were treated dishonourably by both the American and Iranian governments. The Americans never really committed to the deal and the Iranian government did not spend the cash it got from the deal on the people,” she said.

Iranians were not holding their breath for a quick solution to the country’s economic woes.

“The problem is Iran’s economy was sick anyway. Even if sanctions were lifted immediately, it would take years to cure it,” Safarnezhad said.

For others it is a lost cause.

“You can’t keep on trying to fix things with trial and error,” Farzad said.

“The government has been trying for the last 40 years and they have failed. They are just not up to the job.

“They should resign and allow someone who can do it to take up the job.”

AFP

China To Continue Iran Trade Despite New US Sanctions

China’s President Xi Jinping                                                                     Lintao Zhang / POOL / AFP

 

China denounced new US sanctions targeting Iran’s oil and financial sectors as “long-arm jurisdiction” on Monday and vowed to continue its bilateral trade with the Islamic republic.

The measures, which took effect on Monday, follow US President Donald Trump’s decision to abandon a multi-nation nuclear deal with Tehran, which he said was flawed and does not adequately constrain Iran’s destabilising behaviour in the Middle East.

The sanctions aim to significantly cut Iran’s oil exports — which have already fallen by around one million barrels a day since May — and cut it off from international finance.

“China opposes unilateral sanctions and long-arm jurisdiction,” foreign ministry spokeswoman Hua Chunying told a regular press briefing.

“We believe that China’s normal cooperation (with Iran) within international law is legal and legitimate, and this shall be respected.”

The US has given temporary exemptions to eight countries — including India, Japan and Turkey — to continue buying oil in a bid to avoid disrupting their economies and global markets.

Asked whether China has been granted an exemption, Hua said Beijing is conducting “normal cooperation” with Teheran within the framework of international law.

China is a signatory to the 2015 Joint Comprehensive Plan of Action — which includes Britain, France, Germany and Russia — that Trump pulled out from earlier this year.

The remaining members believe the agreement is working as intended and is keeping Iran from obtaining nuclear weapons for now.

“Under the current circumstances, we hope all parties can bear in mind the larger picture and fulfil their duties and choose to stand on the right side of history,” Hua said, adding that China will continue to “uphold the objective and responsible attitude to uphold the agreement”.

AFP