The Latest from Iran (11 October): A President Under Fire

See also Iran Analysis: As Ahmadinejad Is Challenged, The Supreme Leader Tries to Protect Himself
The Latest from Iran (10 October): Economic Fantasy and Reality

---

1615 GMT: Currency Watch. Reports earlier this week that the Central Bank was not selling US dollars in its "trade room" for importers raised our suspicions about shortages of foreign reserves to inject into the market.

The assistant director of the Trade Development Organization has a different explanation: the Bank is offering a mix of currencies each day --- why is not detailed --- so there may be a lack of certain currencies at times.

1553 GMT: Nuclear Watch. Julian Borger of The Guardian reports, from "Western" diplomats, that the 5+1 Powers (US, Britain, France, Germany, China, and Russia) "will launch a new diplomatic push after the US elections":

A "reformulated" proposal will offer limited relief from existing sanctions and other incentives for Iran to limit the level of enrichment of its uranium stockpile. A new attempt will be made to sequence the steps required to reach a deal to overcome the mutual distrust that helped sink previous rounds of negotiations, where each side appeared to wait for the other to make the first major concession.

"We recognise that the Iranians need something more with which they can sell a deal at home, and we will expect real change on the other side. It is about getting the sequencing right. That is what this next round will be about," a European official said.

"If Iran is prepared to do enough, sanctions will be on the table," another western diplomat said. "It shouldn't expect the [the six-power group] to blink first – but if it's ready to take genuine steps we're ready to respond. This could include sanctions relief –-- but only for the right moves by Iran. Sanctions are biting in Tehran and we're not going to lift them without making solid progress on our concerns."

Tough talk aside, this appears to be close to the Iranian proposal of a nine-step plan matching an easing of sanctions with a reduction of enrichment of 20% uranium, culminating in a suspension when sanctions are fully removed.

If so, have the Europeans spoken lately to the Americans? This was the US line, fed to The New York Times last week:

The plan requires so many concessions by the West, starting with the dismantling of all the sanctions that are blocking oil sales and setting off the collapse of the Iranian currency, that American officials have dismissed it as unworkable....Obama administration officials say the deal is intended to generate headlines, but would not guarantee that Iran cannot produce a weapon.

1548 GMT: Disappearing Money Watch. Fars claims the Government has withdrawn cash from the accounts of people who signed building contracts with the housing project Maskan Mehr, and then frozen the accounts after the money is gone.

1539 GMT: Currency Watch. Fars breaks the silence on the currency market, claiming the Rial is being traded at 33000:1 vs the US dollar.

If true, that rate shows a strengthening of the Rial by more than 7% from its low point last Tuesday, when open-market rates were suspended, but a significantly weaker position than the "imposed" rate by the Central Bank of 28500:1.

Fars adds that there is no regular trade on the open market, with "official foreign exchange traders preferring to drink tea and watch TV".

Fars puts the price of old gold coin at 13 million Rials, a similar level to the last posted rate more than a week ago.

1418 GMT: Supreme Leader Watch. Ayatollah Khamenei dominates headlines for the second day in a row, telling teachers and university professors in northeastern Iran about meeting "the most basic needs of the nation" by building "spirit, hope, joy, and self-esteem in the young generation".

1410 GMT: Ahmadinejad Watch. Asr-e Iran reports that, in addition to the petition by 102 MPs for the interrogation of Mahmoud Ahmadinejad, 170 of the Majlis' 290 MPs have signed a statement protesting the President's news conference last week for attacks on other groups within the regime.

1358 GMT: Currency Watch. Leading MP Ahmad Tavakoli, an ally of Speaker of Parliament Ali Larijani, has accused the Government of intentionally weakening the Rial so it could provide for support payments during a second round of subsidy reform.

Families receive a monthly stipend to cover the higher costs of food, energy, and goods becuase of the cuts. The second phase of the plan is still suspended, with Parliament formally calling for a halt in a measure it adopted last week.

Larijani, at a ceremony for Revolutionary Guards who died in battle, told journalists that he did not think the second phase was "expedient".

0928 GMT: Grounded. Aftab writes that, amid difficulties in financial transactions amid sanctions, Air France, British Airways, and Tajikistan Air have all suspended flights to Iran.

Malaysia's Asia Air announced this week that it was stopping flights from mid-October.

0925 GMT: Scuffle Watch. Dr Alizadeh,Ershad, an official in teh Ministry of Culture advisor to the head of the Digital Development Center, has reportedly resigned in protest after a clash between moral police and personnel of the Ministry at the Digital Media Fair.

One Ministry official was handcuffed and others were reportedly arrested on Wednesday after the moral police objected to a display on cyber-threats to Iranian youth.

0718 GMT: Supreme Leader Watch. Clerica and students greet Ayatollah Khamenei in North Khorasan Province:

0710 GMT: Political Prisoner Watch. The brother of Death Row detainee Saeed Sadighi has been arrested after interviews with the BBC and Voice of America.

Saeed Sadighi has been sentenced to death for drug smuggling. His brother was one of the relatives of Death Row prisoners who gathered outside the Supreme Leader's house and judicial buildings on Wednesday to call for an end to executions.

0705 GMT: Labour Front. Rooz Online reports that 200 members of the Tehran Metropolitan Vahed Bus Company gathered Wednesday in front of the captial's municipal building to protest discrimination in wages. The demonstrators also called for the dismissal of managing director of the company and an investigation of their unpaid salaries.

0655 GMT: Cyber-Watch. The manager of a leading Iranian blog has claimed that the filtering of bloggers' websites has increased six-fold since last year.

0625 GMT: The effective suspension of open-market trade in foreign exchange, accompanied by a near-blackout on currency news, enters its second week. One leading site, Mesghal, is down; another, Mazanex, shows empty spaces where numbers should be.

Reports leaked out, however, that the Central Bank's strategy --- setting up a "trade room" for provision of foreign currency to the most important customers, such as importers --- may be in trouble. If claims that the Bank has suspended the opening of exchange accounts with Iranian Rials and that it is paying out interest on those accounts only in local currency are true, it points to a possible difficulty with the provision of foreign reserves to maintain some economic movement.

And far from stifling the political challenge, the manoeuvres have only fed the criticism of President Ahmadinejad. Habibollah Asgarouladi, a leading member of the conservative Motalefeh party --- linked to economic interests such as the Tehran Bazaar --- attacked on Wednesday:

Mr. Ahmadinejad is someone an assortment of Principalists introduced, but as soon as he got votes he said I don’t owe any party.…He has cast aside everyone who had a party or organizational affiliation and only relied on a hidden group who think like him....The president can’t not have relations with parties and society.