Iran Feature: Explaining the Currency Crisis (Naghshineh-Pour)

Central Bank Head Bahmani & President Ahmadinejad The Central Bank is losing its battle with the local Iranian gold and foreign exchange markets. Central Bank governor, Mahmoud Bahmani, has been struggling futilely with market forces for a few months now, to prevent potentially profound devaluation of the Iranian rial. For years monetary policy has been based on clutching the rial against the USD despite double digit inflation and directive bank deposit rates lower than the rate of inflation. It seems that at last people are losing their confidence with the rial and exchanging their rial based capital to non-rial liquid asset classes such as gold and foreign currencies to safeguard their resources.

The reasons for this devaluation may be sought in four serious immediate threats to Iran's economy.

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The Latest from Iran (2 January): The Currency is Falling

See also Iran Audio Feature: Scott Lucas with the BBC "The Economy is More Important than the Missile Tests"
Iran Feature: Stumbling and Stalemate over Sanctions
The Latest from Iran (1 January): Let the Campaigning (and In-Fighting) Begin....

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Cartoon: Nikahang Kowsar2045 GMT: Currency Watch. Prominent conservative Habiballah Asgaroladi has warned that Iranian industry "cannot continue to exist" with the rial at today's level above 17000:1 vs. the US dollar.

2040 GMT: Reformist Watch. Rasoul Montajabnia, the deputy head of the Etemade Melli Party, has declared that damaging former Presidents Rafsanjani and Khatami will damage the system and Revolution.

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Iran Feature: The Bluster That Hides Human Rights (Ebadi)

It's clear that the leadership in Tehran is wracked by internal strife, with divisions deepening between Supreme Leader Ayatollah Ali Khamenei and President Mahmoud Ahmadinejad and his allies. Iran's economy is in tatters, with inflation and unemployment soaring thanks to decades of mismanagement. While popular discontent is not at a high pitch as it was after the June 2009 presidential election, the fundamental conflict between citizens and dictators continues to smolder. Externally, the regime's defiance of international norms—such as this week threatening to close the Strait of Hormuz—have left Iran more isolated than ever.

In response, the regime has created an atmosphere of fear and intimidation, renewing its crackdown against students, civil society leaders and human-rights defenders like my friend and colleague Nasrin Sotoudeh.

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The Latest from Iran (29 December): Ahmadinejad on the Campaign Trail

See also Iran Feature: Why Tehran Can't Cut Off Oil Through The Straits of Hormuz
The Latest from Iran (28 December): Look! State-of-the-Art Torpedoes!

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2200 GMT: And A Bit More of a Break. Apologies to readers, but we are going to extend the holiday overnight. We'll be back by 0700 GMT with a feisty opening to Friday's LiveBlog.

1722 GMT: A Break from Propaganda. We are on a holiday break at the moment --- all we are missing, we think, is another round of bluster about fake war from the Iranian media, "Iran Bombers Pound Mock Targets".

1319 GMT: Sedition Watch. One of the showpieces this week of the regime's "victory over sedition campaign", celebrating the 2nd anniversary of the counter-rally against the Green Movement, has been a report for Parliamentary outlining an attempt at "velvet revolution" involving the US, Israel, Britain, and Iranian politicians such as former President Mohammad Khatami and Mehdi Hashemi, the son of former President Hashemi Rafsanjani.

There has been a glitch in the proceedings, however. Conservative MP Ali Motahari, a staunch foe of President Ahmadinejad, has declared, "If we accept the Article 90 Commission's report on the 2009 elections, we have to accept the report of Ahmad Shaheed [the UN Special Rapporteur on Human Rights] as well."

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Iran Feature: Former Detainee Sarah Shourd "The Plight of Iranians and 3 Decades of US Foreign Policy"

Iranians understand what we went through better than anyone else. Their government is rapidly devolving into a neo-totalitarian regime that uses random arrests, assassinations, show trials, and executions to manipulate, silence dissent, and set an example. Many have experienced first-hand having a loved one, neighbor, or friend plucked out of their lives, imprisoned and even killed, sometimes for something as small as writing a blog.

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The Latest from Iran (26 December): The (Dis)Unity of Elections

Nikahang Kowsar portrays President Ahmadinejad's preparations for the Parliamentary elections in March

See also Iran Interview: Detained Mehdi Karroubi on "A Rigged and Forced Election Process"

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2115 GMT: Unity Watch. A short summary has been issued from today's meeting of the head of the three branch of Government --- President Ahmadinejad, Speaker of Parliament Ali Larijani, and head of judiciary Sadegh Larijani (see 1038 GMT). It declares that the three men insisted on no red lines to eradicate financial corruption.

The language indicates a deliberate attempt to show unity despite tensions --- this summer, President Ahmadinejad warned his foes not to cross "red lines" and prosecute his advisors and minister, while both Ahmadinejad and his critics among conservatives and principlists have accused each other of links to corruption cases.

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Iran Interview: Detained Mehdi Karroubi on "A Rigged and Forced Election Process"

These gentlemen are fully aware of the continued discontent and anger of our people, and as a result they seek to organise a rigged and forced election process in which candidates who do not meet their requirements are disqualified and barred from participating. This will lead to ballot boxes filled with votes that belong to God knows whom.

Their goal is to once again arrest, create fear amongst our citizens, impose a heavy security atmosphere and repeat the tragedies that took place during the Presidential elections in 2009; a process in which candidates will be approved by the Guardian Council based on their positions regarding the supposed "heads of the sedition" and the groups causing the "diversion".

It goes without saying that when the ruling government is reduced to calling the reformists, the Green Movement, and protesting citizens the "diversionary group", their intent is to deceive and I believe that our nation is fully cognizant of these types of tactics.

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The Latest from Iran (24 December): Watching Some Boats, Watching The Currency

1735 GMT: Bank Fraud Watch. Iran Prosecutor General Gholam-Hossein Mohseni Ejei has said that four MPs have been summoned and interrogated over the $2.6 billion bank fraud, involving 200 properties of the Aria Group.

Mohseni Ejei did not name the MPs, but one legislator has said that Alaeddin Boroujerdi, head of Parliament's National Security Commission, and his sons have been arrested and released on bail.

Mohseni also said five managers of Aria Group companies, including the Chief Executive Officer of Ahwaz Steel, have been arrested.

1715 GMT: The Battle Within. Ayatollah Mesbah Yazdi, one of the leading forces in the Islamic Constancy Front, sets up the group's approach for the Parliamentary elections in March --- total obedience to the Supreme Leader, with a fight against the seditious current and "intrusive elements", but also a tip of support to the President: "After the rule of the reformists, Ahmadinejad was the best choice (in 2005)."

The Constancy Front has been fighting other conservatives and principlists who have been seeking "unity" before the elections.

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The Latest from Iran (23 December): The Ahmadinejad All-Is-Well Show

1540 GMT: Tehran's Israeli Friend. Bloomberg has published a report asserting that the Israeli communications company Allot Communications Ltd has shipped cyber-surveillance equipment to Tehran through a Denmark-based distributor.

Allot's Chief Executive Officer Ramy Hadar denied the report, "Allot's equipment was sold to a Denmark-based distributor, the same way it is sold to thousands of distributors and tens of thousands of clients worldwide. We have no way of knowing where our equipment ends up. We have no ties with Iran. You can get our equipment online --- like on eBay."

Israeli officials denied any knowledge of the shipments. The Defense Ministry said it is investigating the report.

1534 GMT: Economy Watch. Alef, the site linked to MP Ahmad Tavakoli, continues its attack on the Government's economic policies. It carries an analysis tying the fall of the Iranian currency to President Ahmadinejad's subsidy cuts.

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The Latest from Iran (22 December): Tangoing Towards the Elections

Nikahang Kowsar on Ahmadinejad and the "dollar snake" of the currency crisis

See also Iran Analysis: The Supreme Leader is Looking for A Few Good Reformists
Iran Snap Analysis: The Currency Falls --- What Does It Mean?
The Latest from Iran (21 December): It's The Economy, Mahmoud

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1831 GMT: Ahmadinejad Watch. The President might have declared this week that the Iranian economy is one of prosperity and growth, which all countries wish to emulate, but that does not mean that he is not on the lookout for some sacrifices. In a speech in east Tehran, he asked wealthy citizens to renounce their support payments for subsidy cuts. Meanwhile, he promised that the Government would ensure each family had a car.

Ahmadinejad did not say whether his request for deferred support payments is connected to reports that the Government is running a large deficit in the subsidy cuts programme.

1822 GMT: CyberWatch. IUS News, a website of hard-line Iranian students, reportedly knocked off-line earlier today, is unavailable.

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