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.

2010 GMT: Political Prisoner Watch. Fatemeh Alvandi, the mother of detained journalist Mehdi Mahmoudian, arrested earlier today (see 1440 GMT), has been released.

Alvandi, detained for an interview about her son, has been ordered not to speak to the media.

2000 GMT: Economy Watch. Journalist Jason Rezaian reports seeing this flyer in his Tehran neighbourhood, "URGENT. Due to desperate financial situation, I'm selling a kidney. Type O+."

1845 GMT: Elections Watch. Fars presses the line that many reformist MPs have rejected calls to stay our of March's Parliamentary elections. Citing a short interview with "M. Hosseini, executive secretary of the reformist faction", Fars asserts that 40 of the 64 reformist MPs have registered for candidacy.

Fars has published a series of reports over the last week, claiming significant participation in the elections, that have denied by prominent reformists.

Meanwhile, both the head of the Revolutionary Guards, Mohammad Ali Jafari, and the head of the Basij militia, Mohammad Reza Naqdi, have asked people to participate in elections to neutralise "the enemy's plot".

1520 GMT: Currency Watch. Mehr reports that the Central Bank is meeting with economists on Wednesday over the currency crisis.

The rial has recovered slightly, after its sharp fall today, to 17400:1 against the US dollar.

1510 GMT: Economy Watch. Another note amid the currency crisis --- Asr-e Iran claims that, as Iranians look to put their funds in something other than the Iranian rial, property prices in Tehran have risen 20% in recent weeks.

1455 GMT: Espionage Watch. Iran Prosecutor General Gholam-Hossein Mohseni Ejei has said that hearings have ended in the case of Amir Mirzaei Hekmati, the Iranian-American accused of spying for the CIA, but the court has not issued a decision.

Hekmati,a former interpreter for the US Army, has been held since August. He faces the death sentence if convicted.

At his press conference, Mohseni Ejei also defended last week's suspension of the website of former President Hashemi Rafsanjani, claiming it had been repeatedly warned about violations over its registration.

1450 GMT: Currency Watch. One of the groups that will be hit particularly hard by the plummet in the Iranian currency is families with children studying abroad. Thomas Erdbrink offers one quote, "My son must return if this continues."

1440 GMT: Political Prisoner Watch. Fatemeh Alvandi, the mother of detained journalist Mehdi Mahmoudian, has been arrested after giving an interview about her son.

Mahmoudian has been imprisoned since September 2009, spending much of that in solitary confinement, after he published reports about the abuses and deaths of protesters in the Kahrizak dentention centre. He is serving a five-year sentence.

1420 GMT: Opposition Watch. Back from a holiday break to find the Iranian rial has plummeted further against the US dollar. It has dropped more than 10% in hours, now standing at 17800:1. On Sunday morning, it was 15200:1.

Thomas Erdbrinkquotes a steel trader in Tehran: "It's ugly. Everybody wants to buy steel just to have something that will keep its value."

As well as the decline in the Iranian currency, falling 40% in four months and 17% in the last two days, gold prices are rising despite the decline in the global market. Gold coin in Tehran now sells for 655,000 Toman (about $405).

1110 GMT: Opposition Watch. The son of detained opposition figure Mehdi Karoubi, in a letter to the head of the Assembly of Experts, has asserted that the Government is "based on lies and deception".

1015 GMT: Panic Watch. There is a lot of fluttering this morning in international media about the regime's announcement that it has produced a fuel rod to be used in the nuclear reactor at Bushehr.

A shrewd analysis would note the repeated problems in putting the reactor on-line --- Iran, after earlier delays, first announced that it was operational in September 2010, only for a series of slippages in that launch --- as well as Tehran's serious issues over shortages of uranium. And even a basic analysis would distinguish between the development of nuclear energy and any attempt at a militarised programme.

Alternatively, a knee-jerk, hysterical article, such as that in The Telegraph of London will not bother with any of this: "Responding defiantly to the imposition of fresh US sanctions, officials in Tehran announced that they had successfully produced and tested nuclear fuel rods....If true, the development would represent an important step in Iran's efforts to complete the nuclear fuel cycle, bringing it significantly closer to being able to produce a nuclear bomb."

1005 GMT: Currency Watch. The Iranian rial, which feel more than 5% on Sunday (see 0700 GMT), has slid another 2% this morning. It is now 16400:1 vs. the US dollar.

0955 GMT: Bank Fraud Watch. MP Ahmad Tavakoli has used the $2.6 billion bank fraud to challenge the Central Bank and the Ahmadinejad Government. He claimed that Aria Bank, at the centre of the embezzlement, failed to get a permit for operations on 15 occasions but succeeded on the 16th with the help of Bank personnel.

Tavakoli, claiming the fraud was twice as big as the US financial crisis of 2009, said the biggest problems of the Government are nepotism and lack of competition.

0945 GMT: Elections Watch. Nedaye Enghelab, linked to the Revolutionary Guards, tries the line that President Ahmadinejad is aiming to take over power through cooperation with the "technocrat's party" of politicians like former President Hashemi Rafsanjani.

A group of "Green Bloggers", withholding their names for security reasons, declares that participation in the Parliamentary elections is "treason against the homeland and its future".

Yousef Akbari, the district governor of Ardebil, has explained that campaigning in cinemas, mosques, and civic centres is forbidden.

0905 GMT: Sedition Watch. Mehr featuring a fawning interview with General Mohammad Ali Jafari, the head of the Revolutionary Guards, in which the website and the commander celebrate "victory" over seditious groups in December 2009.

It's pretty standard rhetoric, but Jafari's accounts of the days after the disputed June 2009 Presidential election are notable -- he portrays the mass protest of 15 June as a "significant number of people unwittingly caught in the vice of politics", drawing opposition leaders into the "pleasant illusion" that they had "many devotees". This was vanquished by the "firm and decisive stand" of the Supreme Leader on 19 June.

0825 GMT: Appealing to the Reformers. An interesting editorial in Alef, the website linked to key MP Ahmad Tavakoli....

For weeks, conservatives and principlists such as Tavakoli have been seeking the involvement of reformists in March's Parliamentary elections, looking for allies to blunt the campaign of President Ahmadinejad's camp.

That effort looks to be limited in its success so far, with only a few reformists declaring that they are standing in the elections, but there is still the question of whether reformist voters turn out in March.

So Alef, in the guise of a lengthy critique, explains why "Old Reformists" are suspect, notably because of alleged links with foreign organisations and governments, and calls for "New Reformists" to work for the good of Iranian society.

0806 GMT: Bank Fraud Watch. Parliament's Article 90 Commission has announced a two-week delay in its naming of those "indicted" over the $2.6 billion bank fraud.

Reports have linked up to 10 MPs, including the head of the National Security Committee, Alaeddin Boroujerdi, to the embezzlement.

0758 GMT: Ahmadinejad Watch. State news agency IRNA's lead story --- even above the news of the long-range missile test: "President Ahmadinejad has officially opened the country's most advanced integrated producer of steel ingots."

Ahmadinejad is in Bandar Abbas on Iran's southern coast.

0750 GMT: Chest-Thumping Diversion Watch. The Twitter message from Reuters says it all: "FLASH: #Iran plans to test-fire two long range missiles on Monday in gulf drill - military official."

Reuters seizes on the statement in Iranian State media from naval commander Mahmoud Mousavi, "We have test fired a long-range shore-to-sea missile called Qader (Capable), which managed to successfully destroy predetermined targets in the Gulf."

Iranian State media initially carried the report of the test of a long-range missile on Saturday morning, but the military soon withdrew the announcement.

0720 GMT: Creative Economics Watch. Parliament's Article 90 Commission documents an example of Government manipulation of the economy and its budgetary figures. The Commission claims that the Government, instead of transferring 500 billion Toman (about $320 million) in oil revenues to the Treasury, used the money for gasoline imports. The Government then sold the gasoline and, benefitting from the higher prices under subsidy cuts, made a "profit" of 70 billion Toman (about $45 million).

The "profit" was put in the Treasury but the Government never deposited the original oil revenue of $320 million. The outcome? The Government in effect grabbed almost $300 million of funds without making any declaration.

0700 GMT: Sunday's biggest moment in our Iran coverage was not in the already-fascinating developments over March's Parliamentary elections, with rival camps amongst conservatives and principlists firing volleys of rhetoric and pleading to their supporters. Instead, it came with a routine glance at the latest gold prices and exchange rates.

Over the course of a day, the Iranian rial had fallen more than 5% against the US dollar.

Had this been the first drop in some time, this could have been treated as a blip worthy of interest and monitoring, but not as a headline development. But this is not the first drop: the rial had sagged almost 10% versus the dollar over a week in mid-December, and the intervention of the Central Bank had failed to redress the fall. And that slide came on top of months in which the rial was sinking to historic low after historic low.

In September, the Central Bank was struggling to prevent it crossing the symbolic marker of 13000:1. This morning, the rial stands at 16050:1.

Iranian State media is trying to ignore the news. IRNA, for example, headlined President Ahmadinejad's statement that he would reform the banking system without uttering a single word about the currency crisis. Watch, however, for the outlets of Ahmadinejad's political rivals --- especially in the context of the campaigns for Parliament --- to seize the story. Foremost among them is iikely to be Khabar Online, the platform linked to Speaker of Parliament Ali Larijani, which has been in the lead in coverage of the exchange rate and wider economic issues.