The US government has updated its sanctions on business dealings with Iran and to allow dollar-denominated transactions, although restrictions on US citizens and access to the US financial system remain.
The US Department of Treasury updated its guidance on 7 October. It said: Foreign financial institutions, including foreign-incorporated subsidiaries of US financial institutions, may process transactions denominated in US dollars or maintain dollar-denominated accounts that involve Iran or persons ordinarily resident in Iran .
The relaxed regulations allows dollar-denominated trading with Iranian institutions such as National Iranian Oil Company (NIOC) and the Central Bank of Iran (CBI).
Allowing dollar-denominated trading does not mean other restrictions have also been lifted. Foreign financial institutions, including foreign-incorporated subsidiaries of US financial institutions, need to continue to ensure they do not process US dollar-denominated transactions involving Iran through the US financial system or otherwise involve US financial institutions (including their foreign branches), given that US persons continue to be prohibited from exporting goods, services (including financial services), or technology directly or indirectly to Iran, with the exception of transactions that are exempt or authorised by a general or specific licence issued pursuant to the ITSR [Iranian Transactions and Sanctions Regulations], said the Treasury Department.
The loosening of sanctions comes at an important time for Tehran as it plans to invite international oil companies (IOCs) to bid on the development of its South Azadegan field in late October.
South Azadegan will be the first tender under the new Iran Petroleum Contract (IPC) model, aimed at attracting more interest from overseas firms to the countrys oil and gas sector.
Iran economy forecast to grow 4.5 per cent
IMF says GDP boosted by rising crude production and renewed activity in non-oil sectors
Irans economy is expected to expand by at least 4.5 per cent in 2016/17 as it is boosted by relief from nuclear-related sanctions and increased oil production, according to the Washington-based IMF.
The fund said increased activity in agriculture, automotive production, trade and transport services have led the recovery in growth in the Islamic Republics non-oil sector.
Monetary and fiscal policies adopted in recent years, along with favourable international food prices, allowed inflation to decline to a low of 6.8 per cent in June 2016, the IMF said, estimating inflation would average 9.2 per cent in 2016/17. Read more