Iran, UK Resume Diplomatic Relations

Iran will resume diplomatic relations with the United Kingdom following a two year hiatus. The two countries have agreed to reopen embassies in London and Tehran and to begin to work toward a stronger commercial relationship. Seemingly in accordance with this policy, Iran announced that it would open two new banks in London: the Melli of Iran and the Persian International Bank. The announcement was coupled by other vague commitments to resume greater cooperation in banking and in trade between the two countries.

UK Foreign Minister Philip Hammond went on to add that UK and European sanctions against Iran could be lifted as early as spring of next year, provided that the conditions of the deal are met until then. It is unclear based on recent revelations related to an allegedly secret IAEA deal with Iran if the US sanctions will be removed as expected.

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News Briefs:

  • The Asian Development Bank will provide the Kazakh government a $1 billion loan to assist in remediating the country’s present currency crisis. The announcement came the day after the tenge lost 23% of its value following Almaty’s decision to transition to a floating exchange rate. The tenge is trading at 252.47 to the dollar, a sharp from 188 on August 20.
  • Ukrainian President Petro Poroshenko proclaimed that he will increase Ukraine’s troop count by an undisclosed amount during last week’s parade in honor of Ukrainian independence. The statement could perhaps be described as confusing given the fact that the truce negotiated in Minsk in February is still in effect. There has been a rise in violence in eastern Ukraine during the past few weeks. While both sides have insisted that the other initiated the violence, the Ukrainian military has been criticized for targeting major industries in areas of eastern Ukraine controlled by Russia-backed rebels.
  • Iran will resume supplies of rail cars to Turkmenistan after a four year hiatus. Iranian Railways CEO Pour Seyed Aghaie affirmed that more than 100 rail cars would soon be sold to Turkmenistan, while an additional 3,500 would be manufactured for sale to foreign partners. Iran-Turkmenistan cooperation is expected to increase and even expand into new sectors such as in chemicals, agriculture and foodstuffs in the coming years.
  • Global crude prices are down to around $43 per barrel after a drop by approximately 7% over the weekend. The current price per barrel is the lowest it has been since December 2014. The drop has provoked a similar drop in the Russian ruble, which according to media sources fell to just over 70 rubles per one dollar.
  • Turkmenistan dismissed its energy minister for alleged “shortcomings” in his work with the government. The sacking came after the minister was allegedly given three warnings, which he presumably did not heed. The country’s economy has faced difficulties due to drops in global energy demand and a decline in remittances from Russia, both of which could be considered out of the control of any Turkmen government official.
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