The Latest from Iran (23 January): Hibernating While The Currency Falls

1944 GMT: Sanctions Watch. Fars, citing an "informed source", dismisses today's sanctions adopted by the European Union, which included a ban on oil imports starting 1 July and an immediate tightening of restrictions on deals with Iran's Central Bank.

"One of the sanctions announced recently was blocking the Central Bank's assets in the European countries, while the CBI does not have even one single Rial (Iran's currency unit) in Europe," the source said.

Fars, reflecting the regime line that the dollar can be bypassed (see 1325 GMT), insists, "During the last two years, Iran has been replacing dollar with other currencies in its trade with the outside world."

Iranian officials have said that arrangements have been made for trade with Russia in rubles and the Iranian Rials, and Tehran is pursuing exchange with India in yen as well as rupees.

1834 GMT: Sanctions Watch. The Obama Administration has imposed sanctions on Iran's third largest bank, Bank Tejarat, and its Trade Capital Bank.

Washington said the banks were blacklisted for providing financial services to entities already sanctioned for involvement with Iran's nuclear programme.

The move today accompanies the European Union's declaration of tightened sanctions on Iran's Central Bank. The effect is to make it tougher for Iran to carry out transactions in support of international trade.

1748 GMT: Currency Watch. ISNA reports that street traders --- who are operating illegally and are subject to arrest under legislation passed earlier this month --- are now selling 1 US $ for 23000 Iranian Rials.

That is a 15% fall in the Rial's value today.

1742 GMT: Ahmadinejad Watch. So what has the President been doing amidst the economic turmoil today?

He has been praising ta'zieh (religious tragedy) as the most popular theatre in Iran today.

1712 GMT: Economy Watch. Another volley fired at the Government, this time by MP Gholam-Reza Mesbahi Moghaddam of Parliament's Economic Committee....

Mesbahi Moghaddam said the economic reputation of the Government is gone. He claimed that, even though the Central Bank has more than $100 billion in foreign exchange reserves, it has abandoned the defence of the Iranian currency.

Arsalan Fathipour, the head of the Economic Committee, said that the Rial weakening to a level beyond 20000:1 to the US dollar is a "big catastrophe for the economy".

Fathipour continues that Minister of Industry Mehdi Ghazanfari's claim of "cheap" US dollars, provided at official Central Bank rates, for importers is not true (see 0455 GMT). He said Parliament has summoned Minister of Economy Shamseddin Hosseini to report on the currency crisis.

1706 GMT: Questioning the Supreme Leader. And now another prominent supporter for former Revolutionary Guards commander Hossein Alaei (see 1139 GMT), after his article warning the Supreme Leader about the consequences of repression --- MP Ali Motahari has said that critics have the right to spread their opinion via national media and that physical attacks on them are immoral.

1656 GMT: Currency Watch. Mashregh writes that thousands of Iranians have rushed to the Iraq for a "fistful of dollars".

The Mashregh report backs up news that Iraqi authorities have approached international agencies for help with foreign reserves because of the number of Syrians and Iranians seeking dollars amidst US sanctions.

1643 GMT: Elections Watch. Abbas Amirifar, the prayer leader in the President's office who was arrested in May, has been rejected as a candidate by the Guardian Council.

Amirifar was accused of promoting a documentary about the imminent return of Shia's "Hidden Imam".

Bahman Sharifzadeh, another cleric close to the Presidential Chief of Staff Esfandiar Rahim-Mashai, has also been barred by the Council.

1637 GMT: CyberWatch. The Sunni website Islah has been filtered.

1630 GMT: Political Prisoner Watch. Iran's student movement has sent a detailed report of more than 2000 students who have suffered human rights violations to Ahmad Shaheed, the United Nations Special Rapporteur on Human Rights for Iran.

1625 GMT: Currency Watch. Why is the price of gold skyrocketing in Iran? Here's a clue from a stationary merchant in Tehran:

The Rial [the national currency] is falling so fast that it's impossible to do business in it. We can't agree any proper deals with other firms because within an hour or two, the prices of everything may have changed. The government has limited the amount of other currencies we can use, so everyone is using gold instead."

The price of gold has shot up again today. Old gold coin is now 1,024,600 Toman (about $505), an increase of almost 30% since last week.

1325 GMT: Sanctions Watch. A sign of possible problems for Tehran as it tries to free the bonds of US-led sanctions through payments in alternative currencies....

Iran has asked India to pay for oil partly in Japanese yen in the latest step in a crisis over trade payments from the end of 2010.

At talks in Tehran last week, India proposed to pay its second-biggest oil supplier in rupees. However, Tehran is seeking payment in yen because it is concerned that they may not get sufficient value from the rupee, which is not fully convertible.

The two countries have struggled to preserve $9.5 billion in annual crude trade after the Reserve Bank of India dismantled a mechanism used to settle payments in euros and dollars in December 2010. Transactions are currently routed through Turkiye Halk Bankasi AS, based in Ankara, which has told Indian refiners it may no longer be able to act as an intermediary because of American warnings not to maintain links with Iranian banks.

1317 GMT: Currency Watch. Mehr reports a possible response by the Government to the currency crisis: the Central Bank is proposing a single exchange rate for the Iranian Rial of 14200:1 vs. the US dollar, preventing profit-taking from arbitrage.

Iran currently has five different rates, with an 80% gap in the Rial's value between the official Bank rate and the uncontrolled open-market rate. The proposed new rate is closest to the "commanded" open-market level of 14000:1 that the Central Bank tried --- and failed --- to establish earlier this month.

1308 GMT: Economy Watch. Critics are lining up to challenge the Government over the state of the economy. Aftab observes that the results of "populist management" are gold coins at more than 1,000,000 Toman and more 2000 Toman (20000 Rials) to the US dollar (see 1130 GMT). "Are economic managers able to resign?" it asks before asserting that the Government except to react with slogans

Reformist MP Mohammad Reza Khabbaz chips in, "By putting the blame for the Rial's fall on the raid on the British Embassy [a "spontaneous" action by a crowd on 29 November], the Government projects its failures on others."

And MP Abbasali Noura warns that the Government should not eliminate 10 million people from support payments for subsidy cuts because this "will have very negative results".

1226 GMT: Tough Talk of the Day. Well, it did not take long for elements in the regime to strike a pose in response to the European Union's cut-off of Iranian oil imports (see 1153 GMT).

MP Ali Fallahian, a former Minister of Intelligence and a member of the Assembly of Experts, said Iran should halt all oil sales to the EU Union immediately, pre-empting EU plans for the start of the embargo on 1 July. This would cause a spike in prices and deny European countries, such as Greece, Spain, and Italy --- all of whom take between 10 and 25% of their oil from Iran --- to find other supplies.

Fallahian also insisted, "If they increase the pressure on our country, we can use the Strait of Hormuz as a tool to decrease the pressures and closing the strait is one of the options."

Mohammad Ismail Kowsari, the Deputy Head of Parliament's National Security Committee chipped in, "[The Straits will] definitely be closed if the sale of Iranian oil is violated in any way."

1153 GMT: Sanctions Watch. Diplomats have leaked confirmation that European Union foreign ministers have suspended oil imports from Iran, with an end to new oil contracts with Iran and the completion of existing ones by 1 July.

The EU also agreed on financial sanctions against the Iranian Central Bank, to block Iran's foreign sales of gold, and to restrict exports of sensitive “dual use goods and technology”.

1149 GMT: Elections Watch. More drip-fed information about the Guardian Council decisions on who can stand in March's Parliamentary elections --- Parvin Ahmadinejad, the sister of the President, has been approved, but Morteza Talaei of Tehran City Council has been rejected because he does not have a Master's degree.

1139 GMT: The Battle Within (Revolutionary Guards Edition). Muhammad Sahimi summarises the information --- posted in EA over the last two weeks --- about the controversy around an article by former Revolutionary Guards commander Hossein Alaei, warning the Supreme Leader of the consequences of repression.

Now a fourth IRGC officer has stepped forward and added his voice to the criticism of the nation's state of affairs. In an article on his blog, Gholam-Ali Rajaei, a former IRGC officer, wrote, "There are criticisms of the Supreme Leader in society," and these articles are merely bringing those "whispers" into the open. Responding to the 12 IRGC commanders that had accused Alaei of targeting Khamenei, Rajaei wrote, "Suppose that the target...of Alaei's article was the Leader. What is the problem? In what sense is this is a violation of the law?"

1130 GMT: Currency Watch. Back from an academic break to find that the official curtain on the value of the Iranian Rial has been lifted --- it is now posted on Mesghal at 21000:1 vs. the US dollar. That is a fall of more than 1% from the last admitted rate, on Saturday, of 19000:1.

Journalist Jason Rezaian confirms that the Rial is now trading at 21000:1 in Tehran.

Mesghal also confirms that the price of old gold coin has broken the 1,000,000 Toman (10 million Rial or $500) barrier. It is posted at 1,003,070 Toman.

0720 GMT: The Battle Within. The pro-Ahmadinejad Raha News fires another warning shot this morning --- it declares that supporters of seditions are ready to publish 16,000 defamatory letters against the Supreme Leader, but the President is ready to defend Ayatollah Khamenei "with his sword".

Now, is this a sign of reconciliation of Ahmadinejad forces with those of the Supreme Leader? Or is Raha threatening, that if the Khamenei camp does not co-operate, that the President has his own documents with revelations? After all, Ahmaidnejad has repeatedly said that he has secret files that will damage his critics, and earlier this month, the rumour circulated that the President's supporters were ready to charge Khamenei's son Mojtaba with fraud.

Meanwhile, Qasem Ravanbakhsh, a leading member of the Islamic Constancy Front, has made clear that the ICF's positions differ from those of other conservatives and principlists in the Unity Front and "7+8" Committee seeking a common line before March's Parliamentary elections.

0510 GMT: Nothing to See Here, Move Along. In case anyone is still following the war talk that prevailed during Iran's ten-day naval exercise at the start of the month:

A U.S. aircraft carrier sailed through the Strait of Hormuz and into the Gulf without incident on Sunday, a day after Iran backed away from an earlier threat to take action if an American carrier returned to the strategic waterway.

The carrier USS Abraham Lincoln completed a "regular and routine" passage through the strait, a critical gateway for the region's oil exports, "as previously scheduled and without incident," said Lieutenant Rebecca Rebarich, a spokeswoman for the U.S. Fifth Fleet.

The Lincoln, accompanied by strike group of warships, was the first U.S. aircraft carrier to enter the Gulf since late December and was on a routine rotation to replace the outgoing USS John C. Stennis.

0505 GMT: We are also in quasi-limbo about the state of the Parliamentary elections in March, or at least those who hope to run in them.

So far State media have said little about the review of candidates by the Guardian Council, the body with final say on who can stand. Instead, media linked to individual politicans and factions are putting out information in dribs and drabs.

It is almost certain that three leading conservative MPs --- Ali Motahari, Ali Abbaspour, and Hamidreza Katouzian --- have been reinstated after they were banned by the Ministry of Interior, and several prominent reformists have also been allowed to run. However, Khabar Online, which has the fullest account of the situation, indicates that other conservatives and reformists have been blocked.

0455 GMT: We are still in official limbo about the state of the Iranian currency.

The website Mesghal, which usually offers the latest rates, has not updated its information since Saturday. State outlet Press TV does not utter a word --- it is more concerned with its own situation, "The Zionist Britain Israel Communications & Research Centre (Bicom) has collaborated with the state-controlled British Office of Communications (Ofcom) to ban the alternative English-language channel Press TV in the UK." 

State news agency IRNA also makes no reference to the state of the currency, although it leaves a clue about concern even as it tries to reassure: Minister of Industry Mehdi Ghazanfari has insisted that the Central Bank will provide enough currency at the official rate --- under which the rial is 80% stronger vs. the US dollar --- to pay for imports.

With an effective State blackout on information, we have to rely on "unofficial" reports. Those indicated on Sunday that the Iranian Rial was now at 20000:1 vs. the dollar, another fall of about 5% from its posted rate on Saturday of 19000:1. Meanwhile, gold prices continue to soar. The unofficial accounts said that old gold coin, which was at about 650,000 Toman at the start of the month, had broken the 1,000,000 Toman (about $500) barrier. In less than two days, the cost shot up more than 25%

And there was one weekend defiance of the blackout that deserves another mention. Fars, often said to be linked to the Revolutionary Guards, noted on Saturday that gold had reached 900,000 Toman. It then accused the Government of "hibernating" during the crisis.