The Latest from Iran (28 January): Back to the Battle Within

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The Latest from Iran (27 January): Pilgrims and Soldiers

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Ayatollah Mesbah Yazdi2235 GMT: Currency Watch. The Government may have taken measures to halt the slide of the Iranian currency, including the raising of interest rates and a single exchange rate, but key MP Ahmad Tavakoli is not satisfied.

Tavakoli, a cousin and ally of Speaker of Parliament Ali Larijani, has posted a detailed criticism on his website Alef, outlining Government mismanagement and claiming "incompetent officials, a lack of trust, and corruption". In addition to demanding trustworthy, effective personnel, he called for control of liquidity in the economy, a halt to the Government's subsidy cuts programme in the energy sector, and avoiding of measures contributing to inflation.

MP Mohammad Baqer Noubakht has echoed Tavakoli's complaints: "Straying cash is the economy's Achilles heel," as liquidity has increased five-fold in the last six years. He called for a halt to the second phase of the Ahmadinejad subsidy cuts.

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Iran 1st-Hand: How the Currency Crisis Began (Chenar)

The first sign of trouble appeared in the gold market. There has always been a strong demand for gold and gold coinage in Iran, as Iranians have traditionally saved in the precious metal. "I never lose money buying gold," said Simin, a 50-year-old retired teacher and mother of four grown children. "Even during the war, I registered for Bahar-e Azadi coins [the Islamic Republic's official gold coins]. They are easy to hide and easy to trade. When I need cash, all I need to do is go into the first jewelry store and sell them at market price." Few became alarmed as gold prices began to increase in Tehran; after all, the gold market was on the upswing globally. According to an economist at the Central Bank of Iran (CBI), "Gold was rising everywhere, and it was only natural to see prices increasing in Tehran. Although sometimes the price of gold in Tehran was more expensive than its price in the global market, sometimes it was lower."

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The Latest from Iran (8 January): Mr Chavez, Can You Spare a Dime?

See also Iran Photo Special: Snapshots of Life and Living
The Latest from Iran (7 January): "We are in an Economic War"

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2140 GMT: Elections All-Is-Well Alert. Press TV goes over the top in its cheerleading, "Iran Political Groups Debate Parliament Vote": "A number of reformist lawmakers said it's business as usual and everyone is taking part because there are assurances that like the previous rounds the next elections will be free, fair and transparent."

An excess from nerves? Possibly, because in the next paragraph the website undermines its confident assurance, "Principalist political organizations and politicians are also preparing themselves for the elections. They express concern over the consequences of absence of reform oriented forces."

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The Latest from Iran (6 January): Squeezing the Regime

Supreme Leader: "We will break the neck of boycotters" / Journalist: "Take care of your own neck, Haji" (Cartoon: Nikahang Kowsar)

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2100 GMT: Elections Watch. Gholam-Hossein Haddad-Adel, former Speaker of Parliament and a member of the Supreme Leader's inner circle, has made conciliatory noises about rivals in the Islamic Constancy Front, led by Ayatollah Mesbah Yazdi. Haddad-Adel, linked to the Unity Front preparing for the Parliamentary elections in March, said, "We do not disagree with our friends in the Constancy Front. There may be difference in preferences but we are united on principles."

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The Latest from Iran (5 January): Shaky Currency, Desperate Measures, and An Outright Lie

See also Iran Feature: Is Ahmadinejad's Government Fuelling the Currency Crisis?
The Latest from Iran (4 January): If You Yell Victory, Does It Count?

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Tehran Times: All is Well2110 GMT: Ahmadinejad Watch. Pro-Ahmadinejad State news agency strikes a very different note on the visit of Turkish Foreign Minister Ahmet Davutoğlu (see 2100 GMT). Forget all the chatter about nuclear talks; IRNA's concern is the President's declaration on "the need for vigilance against the intrigues of the enemies of humanity".

2100 GMT: Foreign Affairs (Turkish Front). Back from a break to look through reports of today's meetings in Tehran between Foreign Minister Ahmet Davutoğlu and Iranian officials, including President Ahmadinejad and Foreign Minister Ali Akbar Salehi....

Davutoğlu's headline announcement was that he had delivered a "Western" offer to resume talks on Iran's nuclear programme and that Salehi had accepted: "We are waiting for a good result coming out of the willingness of the two parties to go back to the negotiating table."

Salehi confirmed that Iran was ready to return to talks "at a time and place agreed by both sides".

However, a European official said Iran had still yet to formally accept a new meeting in writing: "We still await [Iran's] response to [European Union High Representative Catherine] Ashton's letter of October. We are open to talks on confidence-building measures without preconditions....But it's up to Iran to respond in writing."

Iranian media such as ISNA and Press TV are highlighting Salehi's declaration that Iran is "ready for negotiation".

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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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Iran Snap Analysis: Finding a Scapegoat in the Currency Crisis

Head of Central Bank BahmaniTucked in amongst Press TV's assurances of Iran's military and economic strength --- "Iran successfully test-fires Nour missile"; "Israel can cease to exist if Iran attacked" --- is a brief but telling story, "CBI hibernates as Iran rial slides":

Despite a steep rise of the US dollar's parity against Iran's national currency in the unofficial market, the Central Bank of Iran (CBI) has yet to announce a clear policy to assuage the foreign exchange market.

As the business day started in Tehran on Monday, every dollar was traded for IRR16,400, which rapidly rose to IRR 17,000 by early afternoon. 

Meanwhile, the CBI has announced the official exchange rate of the US dollar as being IRR 11,180 on its official website. 

The State news agency IRNA is still not breathing a word about the currency crisis --- instead, its lead story is "California's massive protests against capitalism" --- so what explains the sudden admission by Press TV?

The clue may lie in the headline. If the crisis cannot be hidden, given that other Iranian newspapers as well as international media are now on top of the developments, then a culprit has to be prepared. That won't be the Supreme Leader, of course, and President Ahmadinejad seems to be exempt. Even the Ministry of Economy, Shamseddin Hosseini, who has been under pressure in the Parliament, is not mentioned.

Instead, it is the Central Bank and its head, Mahmoud Bahmani, who can take the blame. Even though Bahmani has been far from inactive --- it was his intervention, through a statement to a Parliamentary election, that brought a short-lived halt to the rial's fall two weeks ago --- he and his staff can be accused of "hibernation". They are dispensable.

Of course, Bahmani's eventual removal will not solve any of the big issues about the currency and the economy, but the hope is that it will buy some time for a solution to suddenly appear. If it does not, then the politics get really interesting: when the scapegoat is gone, who is next? 

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 (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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Iran Snap Analysis: The Currency Falls --- What Does It Mean?

If those at the highest levels of the establishment are feeling the pressure, then it might be assumed that those lower down --- with less power and fewer resources, facing subsidy cuts, rising prices, and a high rate of unemployment --- may be feeling it even more. Their eroding coincidence would feed the cycle of economic distress.

All the posturing statements of the President --- on Tuesday, he declared that many countries had asked Tehran for economic advice --- and the attempts of State news agency IRNA to hide the news cannot offer a cure. Instead, the Islamic Republic will move to another question: what will be the political effect of the falling currency and confidence? Passive acceptance by the public or a sign of public anger? And if the latter, in what form and directed at whom?

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