An Iranian moneychanger: Through a combination of sanctions
and mismanagement, the Ahmadinejad is struggling to deal with
an alarming drop in the nation's currency: 40% in the last week,
80% in the last year.
for Rial Plunge; Stone to be Thrown Back at West (Kayhan, Islamic Republic of Iran)
Does the open
unrest experienced in Tehran yesterday reflect a growing challenge to the
Iranian regime? According to this news item from Iran's state-run Kayhan, Iranian
officials characterized the collapse of the nation's currency as a 'stone' that
must be flung back at the 'enemies' - who have mounted a 'clandestine, vast and
heavy war' against the country.
TEHRAN: On Wednesday, Minister of Economic Affairs ShamseddinHosseini said that Iran is working to shrink and
eventually eliminate the free trade in its currency, the rial.
"The unofficial currency market will be tightened,"
the Mehr News Agency quoted Husseini
as saying." Step by step, a foreign exchange center is being constructed, and
its development will eventually lead to the elimination of the tricksters'
Husseini was speaking after the rial plunged to record lows against the U.S. dollar on
Tuesday, losing about a third of its value in a week.
The rial hit a record low of
around 37,500 to the dollar in open trade on Tuesday, from about 24,600 just
eight days earlier, foreign exchange traders in Tehran said.
On Wednesday, Mehr reported that the
open-market rate had opened at 36,100.
The rial has been falling for over
a year and has lost about two-thirds of its value since June 2011. In an effort
to stabilize the currency, the government last week launched an "exchange
center" to supply dollars to importers of essential goods.
The Central Bank issued a statement that the center supplied
only $181 million in its first week, not nearly enough to satisfy demand.
But Husseini said that the authorities
would use the center to replace the volatile free market, which the government
says has been manipulated by speculators. According to Husseini,
about $100 million per day is now traded at the government-backed center.
On Tuesday, President Mahmoud
Ahmadinejad insisted that Iran's economic underpinnings were sound, and blamed
the rial's tumble on "psychological pressure"
from sanctions and currency speculators.
He described sanctions as part of a "heavy battle"
that has succeeded in driving down oil exports "a bit."
“A clandestine, vast and heavy war has been waged against
Iran on a global scale … and our colleagues at the Central Bank and other
relevant bodies are working hard to find solutions … this is a real battle,”
Ahmadinejad told a press conference.
Referring to Iran's currency market, the president said,
“Fluctuations in the foreign exchange market didn't begin today. The market has
been fluctuating for some time, and have only gathered steam recently.”
Ahmadinejad said that the enemies have imposed embargos on
Iranian crude oil exports and bank transactions, making it difficult for the
Islamic Republic to sell oil, since this is the country’s most important
The president emphasized that Iran would make up for this
brief decline in its oil exports triggered by enemies.
Posted by Worldmeets.US
“Keep in mind that this is a battle. The enemy imagines that
it can shatter the will of the Iranian nation by applying such pressures, and
they may even seek to apply new ones.
“The pressures are not exerted on governments alone, but on nations
as well. All of these measures constitute psychological warfare, and certain
decisions have been taken. Of course, our people are calm. The enemy has thrown
a stone at us. Now we have to lift it and throw it back at them.”