US efforts to choke Iran’s economy are starting to come into effect and a major Egyptian bank is feeling the heat.
US due to cut off UAE branches of Egypt's Banque Misr over Iran ties
A woman displays the latest exchange rates between the US dollar and the Egyptian pound outside a currency exchange office in downtown Cairo, Egypt, on 2 January 2013.
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Copyright © africanews
Khalil Hamra/AP
Branches of Egypt’s Banque Misr in the United Arab Emirates are due to be cut off from the American financial system, the US Treasury department said on Friday.
The US Treasury Secretary Scott Bessent laid out plans this week for what he called Iran’s “economic asphyxiation,” and said Banque Misr was being targeted for what he called its “continued, egregious support of the Iranian regime.”
The action will only take effect after a month-long public comment period and Egypt’s central bank said it’s talking to Washington about the measures.
It said the US action is limited to transactions of Banque Misr branches in the UAE "with correspondents in US dollars only, and none of these measures extend to any of the banks in the Egyptian banking sector.”
US-Israel strikes targeting Iran from late February sparked Tehran's retaliation in blocking most traffic through the Strait of Hormuz, while plunging the Middle East into war.
The waterway is a crucial route for global energy transit, sending global oil prices rocketing. Bessent vowed that the United States was declaring an "economic D-Day" on Iran, warning of harsh consequences for countries that do not join the campaign.
The US Treasury chief added this week that President Donald Trump was also contacting world leaders with a request to halt interactions with Tehran.
Bessent himself is due to make direct appeals to G20 counterparts in bilateral meetings next week, as finance ministers gather in Asheville, North Carolina, for talks.
But Friday's effort underscores the Trump administration's challenges in taking aim at larger targets. Beijing for example is an important buyer of Iranian oil. Before the war, Tehran exported millions of barrels of oil a day, mostly to China.
Moves to hit institutions in China, however, could impact the world economy and would strain ties between Washington and Beijing ahead of an expected visit by Chinese President Xi Jinping to the US capital in September.