Daily Israel Report

U.S. Lawmakers Exploring New Iran Sanctions

As Iran’s currency continues to drop, U.S. lawmakers are exploring possibilities for tougher sanctions on the Islamic Republic.
By Elad Benari, Canada
First Publish: 10/5/2012, 10:54 PM

Iranian Rial
Iranian Rial
AFP photo

As the economic crisis in Tehran worsens and Iran’s currency continues to drop in value, members of the U.S. Congress are exploring possibilities to toughen the sanctions on the Islamic Republic even further, it was reported Friday.

The sanctions currently being imposed on Tehran mainly include a prohibition of trade with the Iranian central bank in terms of oil. U.S. lawmakers are now looking at possibly imposing a comprehensive trade prohibition on many other Iranian goods.

“We are seriously looking into additional legislative options that will affect Tehran’s foreign currency reserves,” an aide to Democratic Senator Robert Menendez said, according to a report on Channel 2 News.

The aide of another senator was quoted as having said that if trade is prohibited with the Iranians on all products and ingredients, except for food and medicine, the Iranian economy will collapse “fairly quickly.”

The new measures may be included in the new security laws which are brought each year to a vote in Congress, said the report. This year, voting will take place after the U.S. presidential election on November 6.

Meanwhile, UN Secretary-General Ban Ki-moon acknowledged on Friday that the sanctions on Iran are beginning to reach their intended goals. Ban said in a new report that “the sanctions are significantly affecting Iran", but also made ​​it clear that they are damaging the country's humanitarian activities. “The sanctions are leading to an increase in unemployment and a shortage of products - including medicine," the Secretary-General was quoted as having said.

On Wednesday, signs of unrest over the economic crisis were seen in central Tehran, as hundreds of police in anti-riot gear stormed the currency exchange district of Ferdowsi, arresting illegal money changers and ordering licensed exchange bureaus and other shops closed.

The protests came after the Iranian rial lost more than half its value in a week. On Saturday alone, the rial dived six percent to a new low of around 28,600 to the dollar. However, President Mahmoud Ahmadinejad denied news reports that international sanctions are crippling his country's economy, claiming that Iran has actually been coping with the economic sanctions and that the impact from diminishing oil earnings is being softened by  the central banks supplying hard currency to finance imports.

Ahmadinejad said the West is waging a "psychological war," adding, "Enemies have managed to reduce our oil sales, but hopefully we will compensate for this."

Foreign Minister Avigdor Lieberman predicted this week that international sanctionscould trigger a popular uprising in Iran like the revolt in Egypt that toppled president Hosni Mubarak.

(Arutz Sheva’s North American Desk is keeping you updated until the start of Shabbat in New York. The time posted automatically on all Arutz Sheva articles, however, is Israeli time.)