LONDON: President Hassan Rouhani promised Iranians on Tuesday the government would be able to handle the economic pressure of new US sanctions amid reports of a second day of demonstrations in protest at financial hardship and a weakening rial.
Fars news agency reported that parts of Tehran´s Grand Bazaar were on strike for the second day running, after traders massed outside parliament on Monday to complain about a sharp fall in the value of the national currency.
On Monday, police patrolled the bazaar following clashes with protesters angered by the rial´s collapse, which is disrupting business by driving up the cost of imports.
Defending his economic record, Rouhani said the government’s income had not been affected in recent months, and the fall in the rial was the result of "foreign media propaganda".
"Even in the worst case, I promise that the basic needs of Iranians will be provided. We have enough sugar, wheat, and cooking oil. We have enough foreign currency to inject into the market," Rouhani said in a speech broadcast live on state television.
Washington is to start reimposing economic penalties on Tehran in coming months after US President Donald Trump quit an agreement between major world powers and Iran in which sanctions were lifted in return for curbs on its nuclear programme.
This may cut Iran´s hard currency earnings from oil exports, and the prospect is triggering a panicked flight of Iranians´ savings from the rial into dollars.
The International Monetary Fund estimated in March that the government held $112 billion of foreign assets and reserves, and that Iran was running a current account surplus.
These figures suggested Iran might withstand the sanctions without an external payments crisis.
Iran´s judiciary chief warned on Tuesday that the "economic saboteurs", who he said were behind the fall of rial, would face severe punishment, including execution or 20 years in jail.
"The enemy is now trying to disrupt our economy through a psychological operation. In recent days some tried to shut down the Bazaar, but their plot was thwarted by the police," Ayatollah Sadeq Larijani was quoted as saying by Fars news agency.
The Iranian government is implementing new plans to control rising prices, including banning imports of over 1,300 products, preparing its economy to resist threatened US sanctions.
Rouhani, who is under pressure to change his economic team, said the fresh US sanctions were part of a "psychological, economic and political war", adding that Washington would pay a high price for its actions.
"Withdrawal was the worst decision he (Trump) could make. It was appalling. It hurt America´s global reputation," he said.
Meanwhile, Iran's oil minister said that OPEC´s oil output agreement did not specify a production increase and that a figure of 800,000 barrels per day (bpd) was an interpretation by some members of the group.
The Organization of the Petroleum Exporting Countries and other top crude producers, meeting in Vienna, agreed on Friday to raise output from July, but the agreement failed to announce a clear target for the output increase, leaving traders guessing how much more OPEC will actually pump.
"Despite what some (members) say about OPEC´s production rise of around 800,000 barrels (per day), there is no figure in the statement," Bijan Zanganeh was quoted as saying by Iran´s oil ministry news agency SHANA.
"Iran´s suggestion was to first balance oil in the market, secure members´ 100 percent compliance to the agreement, and then decide on a production increase in next meeting if needed," Zanganeh said.
He said that Iran´s suggestion was approved in OPEC´s last summit, and that "if a country has a different interpretation of this agreement, Iran will officially raise it to the OPEC.
"Zanganeh said some countries want to send "positive signals to the market or to the United States", but that is not related to OPEC´s decision.
The United States, China and India had urged oil producers to release more supply to prevent an oil deficit that could undermine global economic growth.
Iran, OPEC´s third-largest producer, had demanded OPEC reject calls from U.S. President Donald Trump for an increase in oil supply, arguing that he had contributed to a recent rise in prices by imposing sanctions on Iran and fellow member Venezuela.
Market watchers expect Iran´s oil output to drop by a third by the end of 2018. That means the country has little to gain from a deal to raise OPEC output, unlike arch-rival Saudi Arabia.