Iran rial: Mahmoud Ahmadinejad blames slide on 'enemies'

Discussion in 'West Asia & Africa' started by Rahul92, Oct 2, 2012.

  1. Rahul92

    Rahul92 Senior Member Senior Member

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    Iranian President Mahmoud Ahmadinejad has blamed the "enemies" of his country for the sharp falls in its currency, the rial.

    The currency has fallen to fresh record lows against the US dollar.

    Iranian Industry Minister Mehdi Ghazanfari has blamed speculators for the fall.

    But US officials say the slide reflects the success of US economic sanctions targeted at Iran's controversial nuclear programme.

    Mr Ahmadinejad said Western sanctions amounted to an economic war, but they would not stop the country's programme.

    "We are not people to retreat on the nuclear issue," he told a news conference in Tehran. "If somebody thinks they can pressure Iran, they are certainly wrong and they must correct their behaviour."

    The central bank has placed a $5,000 (£3,100) limit on the amount of foreign currency travellers can take in or out of Iran.

    The rial has reportedly lost more than 80% of its value since 2011 because of US-led trade sanctions.


    Reports from Tehran suggest the rial plunged 18% in Monday's trading and then another 9% on Tuesday.

    Since the start of the year, the currency has lost four-fifths of its value, says the BBC's Mark Gregory.
    'Security move'

    The US-led sanctions are being imposed on Iran because of the country's disputed nuclear programme. The US accuses Iran of aiming to build nuclear weapons, while Iran counters that it simply wishes to develop nuclear power stations.

    The sanctions, which are backed by the European Union, include a ban on the purchase of Iranian oil.

    The US has also threatened to take action against foreign firms and institutions dealing with the Iranian central bank.

    While Iranians are said to be scrambling to convert their rials into hard currency, thereby adding to the downward pressure on the rial, the government has blamed speculation by money changers.

    According to the Iranian Fars news agency, Mr Ghazanfari said: "We have greater expectations that the security services will control the branches and sources of disruption in the exchange market.

    "Brokers in the market are also pursuing the increase in price, because for them it will be profitable, and there is nobody to control them."

    On Tuesday, the rial was said to be trading in Iran at about 37,500 to the dollar, down from about 34,200 late on Monday.

    The rial is not traded on the global currency markets, so it is not possible to produce accurate figures for its value.

    The weakness of the rial has harmed the wider Iranian economy, as it means the country cannot afford to import as many foreign goods and raw materials which are priced in hard currency.

    BBC News - Iran rial: Mahmoud Ahmadinejad blames slide on 'enemies'
     
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  3. Rahul92

    Rahul92 Senior Member Senior Member

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    But i see the opportunity for India,china,S.Korea to import more for less Especially for India we are continuously hampered by these crude imports
     
  4. sob

    sob Moderator Moderator

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    But Rahul92, the international prices for crude are fixed in Dollars, so imports from Iran will not become cheaper. In fact Iranians will get less money for the same Iranian Rial, which goes into producing Crude oil.

    Also Iran has been offering discounts to importers to give an incentive to buy from them, in face of the US sanctions.
     
  5. sob

    sob Moderator Moderator

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    Meanwhile there have been protests in Iran against the Central Bank for the continued devaluation of the Iranian Rial.

    BBC News - Iran police clash with protesters over currency crisis

     
  6. sob

    sob Moderator Moderator

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    Analysis of the events from BBC Persian

    So it seems that there could be a power struggle between President Ahmadinejad and his opponents.
     
  7. sob

    sob Moderator Moderator

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    By the looks of it, the Iranian media too seems to be quite critical of the President and his style of functioning.

    Iranian media reaction

    The conservative daily, Khorasan, asked: "Mr Ahmadinejad, are you the country's president?" It said the president had failed at a news conference on Tuesday to say "what 'programmes' and 'new plans' the government has to resolve the situation".

    The reformist newspaper, Etemad, carried an editorial headlined "Why can't you?" saying that "once again Ahmadinejad took no responsibility for the chaotic situation".

    The conservative news website, Baztab-e Emruz, pointed to the negative impact of the president's remarks on the decline in the rial's exchange rate. "An hour after Ahmadinejad's news conference... the rate of the dollar, which had reduced to 3,200 tomans [32,000 rials approx] in the afternoon, increased to 3,550 again," it said.

    The moderate Mardom Salari noted the "contradictory views" of Majlis Speaker Ali Larijani on the instability of the exchange rate. On Tuesday Mr Larijani told the Fars news agency: "Eighty percent of our economic issues and problems are related to the system of management."

    Source: BBC Monitoring
     
  8. W.G.Ewald

    W.G.Ewald Defence Professionals/ DFI member of 2 Defence Professionals

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    I look forward to seeing his pin-sized head on a pike. That little mutant is a walking advertizement for eugenics.:mad:
     
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  9. sob

    sob Moderator Moderator

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    Bill, a power struggle in Iran could backfire if we get a more hardline President. However I would also like to see the ordinary Iranians assert themselves more and get rid of this regime.

    Students have been protesting regularly but they have always been brutally clamped down. The moderates do not seem to be strong enough.

    And we cannot discount the support the President derives from the Iranian Revolutionary Guards (Pasdarans).
     
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  10. sob

    sob Moderator Moderator

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    BBC News - Iran currency plunge bites into border trade with Turkey

     
  11. asianobserve

    asianobserve Elite Member Elite Member

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    Iranians Abandon Meat for Bread as Rial Drop Fires Protests - Bloomberg

    "xxx

    Iran’s rial is in a tailspin, having lost more than half of its value against the dollar in street trading in the past two months as U.S. and European sanctions aimed at curbing the country’s nuclear program bite. Riot police yesterday fired tear gas and sealed off parts of downtown Tehran after the currency’s plunge triggered street protests.

    xxx
     
  12. average american

    average american Senior Member Senior Member

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    This is what the future holds for Iran if they continue the production of nuclear weapons, isolation of the scale of North Korea forever.
     
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  13. W.G.Ewald

    W.G.Ewald Defence Professionals/ DFI member of 2 Defence Professionals

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    Actually, There Is No Hyperinflation In Iran - Business Insider
     

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