Iran’s President Ties Recent Drop in Currency to U.S.-Led Sanctions

The New York Times on October 2, 2012 released the following:


TEHRAN — Iran’s president admitted Tuesday that the American-led economic sanctions on the country were partly to blame for a breathtaking 40 percent fall in value of the Iranian currency, the rial, over the past week. He pleaded with Iranians not to exchange their money for dollars and other foreign currencies.

Speaking during a news conference broadcast live by several domestic and international Iranian news channels, the president, Mahmoud Ahmadinejad, said Iran was facing a “psychological war” waged by the United States and aided by what he described as internal enemies.

He said the currency’s fall was caused in part by the sanctions imposed by the West over Iran’s disputed nuclear program, which have prevented it from selling oil and transferring money. He also blamed a domestic band of “22 people in three separate circles” who with “one phone call” could manipulate foreign exchange trades in Iran.

One Web site, Mashregh News, reported Tuesday that Mr. Ahmadinejad had ordered the arrests of those “disturbing the currency market.”

The fall in the currency’s value has presented Iran with enormous economic risks, including the possibility of starting a severe bout of inflation, which is already high. A rising sense of economic crisis in Iran could also pose political challenges for the country’s leaders.

Mr. Ahmadinejad’s address was aimed at the teachers, bus drivers, businessmen and others who have been frantically converting their savings into dollars and euros at the dozens of unofficial currency-exchange shops in the center of Tehran.

“I ask you, dear people, do not change your money into foreign currency,” Mr. Ahmadinejad said, emphasizing that such moves would only help the “enemy.”

But a fresh day of currency fluctuations played out on Tuesday, with the rial falling, then strengthening before sinking again, to settle around its Monday record low of roughly 37,000 to the dollar. The rate had been 24,600 rials per dollar as of last Monday.

Addressing the mixed emotions expressed by many Iranians, who are confused over whether to blame economic mismanagement by the government or the Western sanctions, Mr. Ahmadinejad accused the United States and “internal enemies.”

He described the United States government as plotting to make Iranians miserable, emphasizing that the sanctions were hurting normal people instead of Iran’s leaders. “They are telling you lies, their pressures are on the people, not on the government,” he said.

Foreign exchange supplies in the country are sufficient to quench demand, he said, and he lauded the central bank, which he said had managed to “find ways” around the obstacles.

“The enemies are trying to blame the economic problems on the government. No. Never. There is no economic reason for these erratic ups and downs,” Mr. Ahmadinejad said. “I have no doubt that we will return to normal conditions.”

But he did not offer any specific solution to the crisis, and the rial’s value weakened after he spoke. The reaction prompted one person who exchanges currency to predict that the rial would continue to lose value against the dollar and other currencies.

Mr. Ahmadinejad said the economic pressures on Iran caused by the sanctions would never force it to compromise on the country’s uranium enrichment program, which Iranian leaders say is purely peaceful but the West suspects is a cloak for developing nuclear weapons capability. But the president repeated an earlier Iranian offer to stop enriching uranium to 20 percent purity, if world powers would be willing to provide Iran with that grade of nuclear fuel.

“We have announced that if they give us the fuel, we will stop production,” Mr. Ahmadinejad said. “But so far no one is prepared to do so.”

Also on Tuesday an Iranian lawmaker threatened that Iran would enrich uranium to 60 percent purity — much closer to bomb-grade material, if talks with world powers failed.

The lawmaker, Mansour Haghighatpour, deputy head of the foreign policy and national security committee in Parliament, said Iran needed the higher enriched fuel for still-to-be-designed nuclear submarines and ships, according to Press TV, Iran state television’s English language news channel.”


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