The Latest from Iran (21 December): It’s The Economy, Mahmoud

0950 GMT: The Battle Within. More on the political dispute between the camps of Mahmoud Ahmadinejad and Hashemi Rafsanjani, which we featured in an analysis yesterday….

Rah-e Sabz reports that the President’s senior advisor Ali Akbar Javanfekr has used an article his Iran newspaper to allege, “What today is known as the deviant current is meaningless phrase that has been created by Hashemi Rafsanjani so that it can stand against the ‚Sedition Current‘ phrase that was used by Supreme Leader.”

The „deviant current“ is often applied by critics to Ahmadinejad’s inner circle including Javanfekr, recently given a one-year prison sentence over an issue of his newspaper.

Javanfekr adds the charge, „Rafsanjani’s aim is to disperse the supporters of the Supreme Leader.“

Abbas Amirifar, who was the prayer leader of the Presidential office, has made the same claim about Rafsanjani and the creation of the „deviant current“.

Amirifar was imprisoned earlier this year for his involved in the making and distribution of a film about the imminent re-appearance of the Hidden Imam. There are reports that Ahmadinejad had planned to put him in place of the Minister of Intelligence, Heydar Moslehi.

0940 GMT: Currency Watch. An EA correspondent checks in with valuable additions to our morning analysis and latest news on Iran’s currency:


1) Sources are reporting that the Central Bank has resorted to forcing the shutdown of most money exchange around Ferdowsi Street and Square in Tehran, traditionally the hub of the open market. Reason is probably to physically block further rises in the US dollar’s value. Nevertheless, the dollar is still hovering on or above the 15,000 rial mark where traded. 

2) Fararu has another, very interesting reason for this sudden spike: it says that speculators and investors from other sectors, such as construction, have recently moved overen masse to the currency sector, because of uncertainty and falling profits elsewhere. The currency market is essentially a sector of last resort for middle- and large-scale entrepreneurs now witnessing the collapse of profitability in banking bonds or large-scale construction.

3) There is more than likely an attempt by people with access to large quantities of foreign currency at the „official“ Central Bank rate to take advantage of the spread between this and the open market rate. No evidence, but speculation runs from the Government wishing to offset its debts to prospective Parliamentary candidates making a fat profit with which to fund their imminent campaigns. If true, the „positive“ would be that the current volatility would peak or stop at some point.


0933 GMT: Cyber-Watch. Deputy Minister of Communications Ali Hakim Javadi, Deputy Minister of Communications, has declared, „The location of the hosts of more than 90% of Iran’s governmental internet sites has been transferred inside the country. This was a vital move for protecting governmental information.“

0929 GMT: Sanctions Watch. Little of substance emerged from Tuesday’s meeting in Rome of officials from 11 countries, discussing further measures against Tehran. Sources put out the line for the media that there was agreement „to step up pressure on Iran to force it to resume talks over its nuclear programme“.

0923 GMT: All the President’s Men. Fars takes a shot at the President’s right-hand man Esfandiar Rahim-Mashai. Citing the complaint of the Ferdowsi Foundation, which honours Iran’s famous poet, the websiteaccuses Rahim-Mashai of „squandering millions“ over the reconstruction of Ferdowsi’s birthplace.

Before becoming Ahmadinejad’s Chief of Staff, Rahim-Mashai was the head of Iran’s Culture, Heritage, and Tourism Organisation.

0920 GMT: Currency Watch. Alef, the outlet of MP Ahmad Tavakoli, jumps in on the currency issue, accusing the Central Bank of manipulating the price of gold coins.

0915 GMT: Ahmadinejad Watch. Unsurprisingly, State news agency IRNA is featuring the President’s later appearance in the provinces, his speech this morning in Varamin in northern Iran.

Ahmadinejad continued the promotion of his subsidy cuts programme, launched a year ago this week, with the declaration that a second phase would soon be launched and the warning that some would scheming against the initiative with „inflammatory rumours“. He added the flourish that Iran would soon be among the world’s main exporters of gasoline.

0905 GMT: Campus Watch (British Edition). Rah-e Sabz reports, from „Government sources“, that scholarships for those studying in Britain will be suspended.

The regime has been trying to reduce the presence of students in the United Kingdom since the 2009 Presidential election, but the recent escalation in tensions with London has raised the prospect of a cut-off of any support.

0855 GMT: Foreign Affairs Watch (Gulf Front). While the regime may have backed away from a trade suspension with the United Arab Emirates, its battle of words with Gulf States continues. After 1st Vice President Mohammad Reza Rahimi declared, „The UAE is only the UAE because of Iran,“ a Tehran officialhas reportedly declared that Qatar is „stealing“ $3 billion a month of Iranian oil.

0755 GMT: How serious is the latest turn in the Iranian economy, with the fall of the currency and Tuesday’s confusion as Tehran announced and then un-announced that it was cutting trade with its second-largest partner, the United Arab Emirates?

Serious enough that leading US newspapers set aside their standard attention to Iran’s nuclear programme and the chatter about „war“ to feature the story. Thomas Erdbrink of The Washington Postoffered an overview — see Tuesday’s LiveBlog — and this morning The New York Times headlines, „As Further Sanctions Loom, Plunge in Currency’s Value Unsettles Iran„.

Djavad Salehi-Isfahani, one of the leading analysts of the Iranian economy, offers the incisive quote: “This is the most serious financial crisis they’ve faced, with multiple things coming to a head. I have the feeling that really nobody is in charge of economic policy, nobody who can quickly think on their feet.”

(It should be noted that The Times article overstates the issue, at least with respect to the currency, with the wildly inaccurate claim, „In late October, it cost about 7,000 rials to buy one dollar…., which means the Iranian currency has plunged in value by more than 50 percent against the dollar in the past few months.“ The rial was around the 12500:1 mark on the open market this autumn.)

Sections of the Iranian press continue to pretend that nothing serious is happening. Press TV, for example, makes no reference to the currency issue. However, it cannot avoid the confusing — and damaging — episode on Tuesday over the short-lived declaration that Tehran was suspending trade with the UAE, carrying the Foreign Ministry’s denial of any cut-off.


Veröffentlicht am 21. Dezember 2011 in Empfehlungen, Gesetze, Medien, Meinungen, Politik, Wirtschaft und mit , , , , , , , getaggt. Setze ein Lesezeichen auf den Permalink. Kommentare deaktiviert für The Latest from Iran (21 December): It’s The Economy, Mahmoud.

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