U.S. Secretary of State John Kerry says that the dollar could cease to be a world reserve currency if Washington reneges on a nuclear deal with Iran and demands that allies follow suit.
"If we turn around and nix the deal and then tell [U.S. allies], ‘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 an August 11 event hosted by Reuters in New York City.
Kerry’s warning came during his impassioned defense of the nuclear agreement between Tehran and six world powers reached last month.
The accord, which lifts some sanctions against Iran in exchange for significant curbs on its nuclear activities, has come under fire from Republicans in the U.S. Congress and Israel, who say it will only delay Iran’s ability to obtain an atomic weapon and spark a nuclear arms race in the Middle East.
Kerry dismissed this suggestion, saying that the agreement expressly states that “Iran can never have a nuclear weapon” and can “never pursue it.”
He said that it would be impossible under the deal for Tehran to embark on a secret program to develop atomic fuel without being detected by the United States.
“This deal is a good deal. It gets the job done,” Kerry said.
Congress is expected to vote in September on whether to approve or disapprove of the deal. Republicans say they have enough votes against the accord to pass the legislation disapproving of it.
But the Republicans don’t appear to have enough votes against the nuclear deal to override a veto that U.S. President Barack Obama has vowed to wield should lawmakers vote against the accord.
Kerry said that if Washington walks away from the deal, “we will have lost the moral imperative.”
“We will have left Iran free to go do its [nuclear] program without restraints, without inspections, without knocking down its stockpile, without knowing what they’re doing,” he said. “And what do you think happens then?”
Iran and the so-called P5+1 group of world powers -- Britain, China, France, Russia, and the United States, plus Germany -- reached the agreement in Vienna on July 14.
Tehran has long maintained that its nuclear program is for peaceful purposes, while Western nations have accused Iran of pursuing an atomic weapon.
With reporting by Reuters