The Latest from Iran (29 September): The Economy and the Divisions Within the Regime

See also EA Video Analysis: Iran --- Ahmadinejad in New York "He Came, He Spoke, He Slipped Away"
Iran Feature: Fars News and The Onion Agree --- "Rural American Whites Prefer Ahmadinejad to Obama"
The Latest from Iran (28 September): The Next Fall in the Currency

---

1544 GMT: Political Prisoner Watch. Prominent human rights lawyer Mohammad Ali Dadkhah has been summoned to Evin Prison to begin his nine-year sentence.

Dadkhah, one of the founders of the Center for Defenders of Human Rights, was arrested less than a month after the disputed 2009 Presidential election. He was sentenced in July 2011 on charges including membership of the CDHR and "spreading propaganda against the system through interviews with foreign media".

1531 GMT: Press Watch. Families of 25 martyrs and veterans of the 1980s Iran-Iraq War have expressed support for Hadi Heydari, cartoonist for the reform newspaper Shargh, in an open letter.

Shargh was banned and its managing editor imprisoned this week over a Heydari cartoon which showed men blindfolding each other in bright light. Authorities argued that the image was an insult to veterans on the 32nd anniversary of the start of the war.

1527 GMT: Currency Watch. As the Iranian Rial falls, the head of the Central Bank, Mahmoud Bahmani has insisted that the "resistance of the Bazaar" to currency measures "certainly will be broken soon".

Bahmani assured that the Bank would take steps to give foreign exchange below open-market rates to importers of all goods soon.

After suspending the provision of exchange last month, the Bank has resumed sale at official rate --- under which the Rial is more than twice as strong --- to importers of 1st-grade goods, and it has set up a "trade room", providing exchange at 2% below open-market rate, in the last week.

1517 GMT: Labour Front. Jahan-e San'at reports that car sales have been stopped because of a quarrel with the government over prices. The stoppage would affect two million employees.

Iranian media have reported a 30 to 50 percent drop in car and component production in the past six months (see 0955 GMT).

About 3000 workers from Qazvin have written an open letter to the Minister of Economy, demanding that their wages be adjusted for inflation.

1354 GMT: Tough Talk of the Day. Hojatoleslam Ali Shirazi, the Supreme Leader's representative to the army has said, "To destroy Israel, we need a pretext and 24 hours."

1348 GMT: Foreign Affairs Watch (Syrian Front). The Supreme Leader's advisor on international affairs, former Foreign Minister Ali Akbar Velayati, has re-asserted a defiant line of support for President Assad: “The Syrian government’s position has been stabilised and certain blasts and blind acts of terror cannot overthrow this regime."

Velayati said the victory of the Syrian government is also the triumph of the Islamic Republic.

1340 GMT: Inflation Watch. Authorities have set a price of 1400 Toman (about $1.25 at official rate) per litre of milk with 1.5% fat, a rise of 30% over the previous cost.

1330 GMT: Currency Watch. The Iranian Rial is close to free fall today --- having passed the 27000:1 mark against the US dollar this morning (see 1115 GMT), it has continued its decline to 28500:1.

The Rial has fallen 6% today and almost 20% this week on the open market. Its official level is 12260:1 vs. the dollar.

There has also been a striking rise in the price of gold, with old gold coin soaring more than 10% to 11.38 million Rials (about $930 at official rate).

1115 GMT: Currency Watch. The Iranian Rial has plunged to yet another all-time low today, falling almost 3% vs. the US dollar to 27650:1 on the open market.

The Central Bank's intervention last Sunday has failed to check the slide, with the Rial dropping almost 15% since then. The gap between the official rate of 12260:1 and the open-market rate is now more than 125%.

1105 GMT: Foreign Affairs Watch (US Front). So is the Islamic Republic's position to maintain the prospect of talks with Washington, as President Ahmadinejad has indicated, or to reject them, as the Supreme Leader --- according to the President's brother (see 0600 GMT) --- has commanded?

Ayatollah Khamenei's senior advisor on international affairs, Ali Akbar Velayati, puts out a cryptic line, "Our policy towards the US has not changed."

However, journalist Borzou Daragahi sees a smack-down to Ahmadinejad in Velayati's announcement that "only" the Supreme Leader can set the policy on the talks.

1055 GMT: Sanctions Watch. Iran has suffered another serious blow to its efforts to move oil and other exports, as the last big company doing classification work on Iranian ships, key to securing insurance and ports access, has halted the work.

The Korean Register of Shipping is the final member of the world's top 13 classification societies to halt the marine work, following suspension by Britain's Lloyd's Register and a Russian firm.

0955 GMT: Economy Watch. A correspondent for NBC News offers an first-hand overview of the economic situation:

“Our money is becoming more and more worthless every day,” said Sarvenas Sadi, an elderly woman doing her daily shopping in Tehran earlier this week.

She picked up a handful of limes and exclaimed, “These were 100 percent cheaper last year!”...

So what’s the solution? “Eat less limes,” she jokingly replied.

The financial situation is affecting people from all classes. Thousands of workers have been laid off and have not been paid back wages because companies have simply run out of money. Majid, a 32-year-old mechanic who used to work for a large car company was recently laid off and is owed six months’ salary.

“They are laying off people left, right and center. I doubt there will be a company left by the [Persian] New Year,” he said, giving just his first name because of the sensitivity of the issue in Iran....

The car industry, one of the biggest manufacturing sectors in Iran and a massive employer, has been affected dramatically; Iranian media have reported a 30 to 50 percent drop in car and component production in the past six months.

0945 GMT: Oil Watch. Japan resumed oil imports from Iran in August, but the numbers are still disappointing for the Islamic Republic, with a 67% fall from August 2011.

Tokyo purchased 101,035 barrels per day last month after a halt in July because of European Union sanctions cutting off insurance for tankers.

Japan, the world's third-biggest oil user, raised its crude imports by 2.9% in August from a year ago, by raising purchases from Saudi Arabia, Qatar, Kuwait, and other suppliers.

Tokyo's imports of Iranian oil for the first eight months of 2012 are down 42% from the same period a year ago.

0930 GMT: Tough Talk of the Day. Javad Estaki, the commander of a military base in Isfahan, has said that the Islamic Republic matches the enemy in military equipment while warning that the "possibility of attack is 100%".

0630 GMT: Rafsanjani Watch. Fatemeh Hashemi Rafsanjani --- the daughter of former President Hashemi Rafsanjani and the sister of imprisoned Fatemeh Hashemi and Mehdi Hashemi --- has spoken to the media:

[On Thursday] we went to Evin Prison with some things for Mehdi which they did not accept from us. They said, "We did not arrest him, we can't accept this." We asked where Mehdi is now, but they did not give any answer. We don't know where he is and we don't know in which condition he is....

Faezeh is in the female section of the Evin Prison and she is happy. She has asked us not to take any action for her release or leave....

The aim is to deal with Mr. Hashemi [Rafsanjani]. This movement has existed since before the Revolution and still continues. They want to purge Mr. Hashemi.

0600 GMT: It did not take long. Almost as soon as President Ahmadinejad returned from his five-day trip to New York, public divisions and tensions took over Iranian politics.

The Secretary of the Expediency Council, Mohsen Rezaei, criticised the fighting among conservative and principlist factions: "Unfortunately we are witness to disagreement and quarrelling from the lowest level of society, which is the family, to the highest levels of the regime, and every day we are witness to the different collating of files [against one another]. If this state continues there isn’t much hope for the people’s economic future."

MP Ali Motahari, a leading foe of the Government, has sent out his latest challenge to the media after he said he was prevented from speaking in Parliament on Thursday. Motahari inisted that President Ahmadinejad "should not stay in power for another day". He cited the economic crisis and specific issues, such as Ahmadinejad's refusal to remove controversial aide Saeed Mortazavi as head of the Social Security Funds and the failure to pay support funds to industry.

Mostafa Pourmohammadi, Iran's Inspector General, responded again to the political attack of 1st Vice President Vice President Mohammad Reza Rahimi, who has accused Pourhommadi of embezzlement while he was Minister of Interior. The Inspector General said the 21 billion Toman (about $17 million) in question was used to provide homes for deprived staff of the Ministry.

Rahimi himself has been accused of corruption, notably involvement in a major insurance fraud. So far, although others are on trial, the Vice President has escaped prosecution. 

And Davoud Ahmadinejad has a pointed message for his brother: he said the Supreme Leader is opposed to negotiations with the US.

While in New York, Mahmoud Ahmadinejad made clear that he would welcome a resumption of talks with the Americans over Tehran's nuclear programme.