Iran has sufficient foreign currency reserves to withstand the impact of US sanctions, Central Bank Governor Abdolnaser Hemmati said on Tuesday, as the country's currency faces intense pressure and inflation remains high. Hemmati's remarks came after US Treasury Secretary Scott Bessent argued that Tehran was facing growing economic pressure from Washington's sanctions.

Hemmati said the Central Bank was prepared to inject up to $2 billion into the foreign exchange market to reduce recent volatility. He also sought to reassure the public and financial markets that Iran had adequate foreign currency resources. According to the semi-official Tasnim news agency, he said the country had sufficient currency reserves despite the economic pressure created by US sanctions.

The Central Bank governor said Iran continued to collect foreign currency receivables and had access to domestic reserves and other resources. He did not provide further details, saying information about some of the reserves could not be disclosed. Hemmati acknowledged that economic conditions and managing people's livelihoods had become difficult, but rejected suggestions that the economy was heading towards collapse.

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Iran's currency has faced a sharp decline in recent months, reaching a record low in August after crossing the psychological threshold of 2 million rials against the US dollar. Annual inflation also reached 66 per cent in July, highlighting the severe economic challenges facing the country. The weakening currency has added pressure on households and businesses already dealing with high prices and restrictions linked to sanctions.

Hemmati's comments came after President Masoud Pezeshkian and other Iranian officials highlighted mounting difficulties facing the economy amid US sanctions and a naval blockade. Washington has increasingly relied on economic pressure to push Tehran to meet its demands, while Bessent has warned that companies and individuals doing business with Iran could face US sanctions.

Bessent argued on Monday that Iran was taking US sanctions seriously and was responding aggressively because it was losing the economic battle. Hemmati, however, maintained that Iran's financial resources remained sufficient and described claims of an impending economic collapse as psychological pressure. His comments are aimed at projecting stability as Tehran confronts a weakening currency, high inflation and continued restrictions on its access to international markets.

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