Rouhani Braces for Sanctions With New Ministers in Key Posts

(Bloomberg) -- Iranian President Hassan Rouhani won the approval of lawmakers for his picks to run key ministries in a major reshuffle intended to galvanize the Islamic Republic against U.S. sanctions due to kick in soon.

Late on Saturday, lawmakers in Tehran approved the ministers Rouhani had proposed to run the ministries of economy and financial affairs; industry, trade and mines; welfare and labor; and roads and urban development.

“Today, our main enemy means America. It’s drawn its sword from the sheath and points it in the faces of the people of Iran, and we have to battle and we have to fight and we have to be united,” Rouhani said in a speech to lawmakers ahead of the parliamentary vote aired on state TV.

Currency Crisis

Rouhani is under mounting pressure to contain a currency crisis brought on by U.S. President Donald Trump’s decision to withdraw from the 2015 nuclear deal. Bringing in new ministers is part of an agenda to overhaul Iran’s banking sector and gird the oil-rich Persian Gulf country against the impact of a second round of U.S. sanctions.

The new minister for economy and financial affairs, Farhad Dejpasand, previously held senior posts in Iran’s Budgetary and Planning Organization. He told lawmakers in a speech before the vote that he wants to improve transparency, crack down on corruption, and do more to reform Iran’s banking sector and support the private sector.

Mohammad Shariatmadari, who was minister of industry, trade and mines, will move to the ministry of welfare and labor following Saturday’s vote. He leaves behind a ministry mired in allegations of corruption and was criticized by some lawmakers for failing to prevent graft in the ministry linked to the illegal import of luxury cars.

Plunging Rial

Despite the rial crashing to record lows, Iran’s foreign-exchange and cash reserves are “at their highest level than at any other time in the past,” he said, without giving more details. The rial has lost about 70 percent of its value against the dollar on Iran’s secondary market since last year, and the government has banned the import of hundreds of non-essential goods to prevent foreign currency outflows.

The next round of U.S. sanctions against Iran come into effect on Nov. 5, an effort to wipe out the Islamic Republic’s revenue from oil exports, its main source of income.

“On Nov. 5, all U.S. sanctions against Iran lifted by the nuclear deal will be back in full force,” Trump said on Thursday at a White House gathering to mark the 35th anniversary of the 1983 attack on the Marine Corps barracks in Beirut, Lebanon.

“And they will be followed up with even more sanctions to address the full range of Iran’s malign conduct,” Trump added. “We will not allow the world’s leading sponsor of terror to develop the world’s deadliest weapons. Will not happen.”

To contact the reporter on this story: Golnar Motevalli in Tehran at gmotevalli@bloomberg.net

To contact the editors responsible for this story: Riad Hamade at rhamade@bloomberg.net, Ros Krasny, Bernard Kohn

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