Foreign media: US Treasury Secretary Besent is advancing two fronts simultaneously, while adding financial sanctions against Iran and intervening in the US debt market through operations such as bond buy-backs. According to the article, both actions point to the same objective: to reduce energy and financing costs.
Extension of secondary sanctions against Iran
The United States Department of the Treasury indicated that the use of secondary sanctions would be extended to entities and States operating with Iran. Becent also stated that any country that helped Iran could be excluded from the United States dollar system. The article mentions that this practice may affect, in the first instance, Chinese enterprises that deal with Iranian crude oil and related transactions.
Pressure has also been felt on the Iranian side. Citing Iranian officials and parliamentary sources, the report states that the domestic economy is under clear economic pressure and that some politicians have begun to publicly emphasize the need for peace and negotiation.
The scale of repurchases continues to expand.
On another front, last week Besent announced an increase in long-term United States debt buy-backs in response to a 30-year-old United States debt return up to a high of almost 20 years. It was reported that, following the initial short reaction of the market, the rate of return quickly recovered, suggesting that the scale of buy-backs at the $400 million level remained limited.
The CNBC quoted information that the Ministry of Finance may also use general accounts to expand the repurchase effort. The account, which is supported by tax revenues, has risen to about $950 billion, above the level of the Biden Government.
The market is worried that the Treasury is more proactive.
Finally, citing George Saravelos, Director of Foreign Exchange Studies at Deutsche Bank, the article states that such buy-backs and foreign exchange operations have the effect of suppressing long-term rates of return. Markets are concerned that the Ministry of Finance is playing a more proactive role than before in order to ease the pressure on debt and remittance markets.