The United States Secretary of State John Kerry said on Tuesday dollar might be negatively affected if the US Congress rejects the nuclear deal reached between Iran and the West last month.
The US top foreign diplomat told Reuters that a possible failure regarding the approval of Iran nuclear deal in the Congress could threaten the global position of US dollar as the world’s reserve currency.
"If we turn around and nix the deal and then tell them, 'You're going to have to obey our rules and sanctions anyway,' that is a recipe, very quickly ... for the American dollar to cease to be the reserve currency of the world," Kerry said at a Reuters Newsmaker event.
Kerry has cast an argument in a feverish battle to prevent US lawmakers in the Congress from killing the 14 July nuclear deal which was agreed after a long-lasting marathon talks between Iran and the P5+ 1 countries, including the US, the UK, France, Germany, Russia and China.
The deal suggests Iran to curb its nuclear programme in exchange for the removal of UN sanctions and arms embargo over the country as well as releasing the country’s 100 billion dollars worth of assets around the world.
The Iran nuclear deal must be endorsed by the US Congress until Sept. 17 in order to lift sanction regime over Iran where radical political wing also opposes a Western-imposed nuclear settlement.
Kerry urged US lawmakers on the implementation of nuclear agreement for the sake of US financial stability since dollar is used as an international currency and warned over a loss of confidence in US leadership that could also impair dollar’s leading position in world economy and politics.
He said US Treasury experts "are doing a full dive on how this works and what the implications are. But the notion that we can just sort of diss the deal and unilaterally walk away as Congress wants to do will have a profound negative impact on people's sense of American leadership and reliability."
“The reality of the situation is that the U.S. dollar hasn’t been this strong in decades. The thought that it could be replaced as a reserve currency is laughable at this point on a geopolitical basis and nothing in the Iran deal even remotely touches upon that issue,” Kerry added.
Kerry defended the Iran deal as he claimed the deal would limit Tehran of developing nuclear weapons secretly without being detected by the US and international community.
"I'm not going to tell you that Iran is definitely going to change," Kerry said. "There's nothing in this agreement that is based on trust or an expectation of a change of behavior. It is based on verification and the knowledge that we have the ability to enforce this regime." he added.
A final nuclear deal might also be said to provide Tehran a legitimate base in relations with its Middle Eastern neighbours, such as Saudi Arabia and the Gulf countries which have been essentially opposing a nuclear armed Iran.
With a Western support derived from the nuclear settlement, Iran is expected to enhance its bargaining power regarding the crises in Iraq, Syria and Yemen where the parties have been divided over power struggle and sectarian violence.