Iran Calls New US Sanctions 'Psychological War'

TEHRAN, Iran (AP) - Iran's foreign ministry has dismissed the new U.S. sanctions on Tehran, saying they are part of a "psychological war" meant to sow discontent among Iranians.

A foreign ministry spokesman says Iran's central bank has no financial transactions with the United States and would not be affected by the measures.

He told reporters in Tehran today that the penalties are just "propaganda."

The U.S. ordered the new penalties on Monday, giving U.S. banks additional powers to freeze assets linked to the Iranian government and close loopholes that officials say Iran has used to move money despite earlier restrictions imposed by the U.S. and Europe.

The United States and its allies suspect Iran's nuclear activities are geared toward nuclear arms. Iran denies the charge.