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".

1734 GMT: Ahmadinejad Watch. Big news from Jam-e Jam --- President Ahmadinejad has been summoned to answer questions before Parliament next Tuesday. The process could lead to impeachment, if the President's answers are deemed unsatisfactory.

Critics of Ahmadinejad have attempted for months to bring in the President for interrogation, amassing the required minimum of 73 signatures (25%+ of the 290-member Majlis). However, they were blocked this summer by the Board of Parliament.

If this news is true, it would indicate that key players in Parliament --- notably the Speaker, Ali Larijani --- and perhaps the Supreme Leader have lifted their objections to questioning.

1635 GMT: Political Prisoner Watch. A photograph of activist Saeed Naeimi (third from left) after his release from prison --- he was arrested on 9 May and charged with ""assistance in espionage":

1630 GMT: The Battle Within. The pro-Ahmadinejad Raha Press claims it has audio tapes of a meeting of hardliners who fear that the President will publish the 140,000 documents exposing wrongdoing among Iran's top officials. The site adds that the hardliners want to push the Supreme Leader to dismiss Ahmadinejad.

1625 GMT: CyberWatch. Another verbal shot in the regime's escalating campaign to control the Internet --- the Imam Khamenei "Cyber-Base" has been launched in Tabas in central Iran.

1618 GMT: Ahmadinejad Watch. Aftab jabs at the President over his failure to appoint his son-in-law Mehdi Khorshidi as head of Iran's Standards Agency: if the Government ignores the basics of management, how does it want to manage the world?

Ahmadinejad withdrew Khorshidi's appointment, heavily criticised by others within the establishment, earlier this week and reinstated the former head of the Agency.

1615 GMT: Rafsanjani Watch. Former President Hashemi Rafsanjani, through his office, has distanced himself from March's Parliamentary elections. Rafsanjani said he is not related to any political group or party and he will not comment on the campaign.

1600 GMT: Currency Watch. Back from an academic break to find Thomas Erdbrink summarising the latest from Tehran on the currency crisis: "So Iran exchange offices half open, but not selling [foreign] currency. Now let's wait for Saturday [Friday is a weekend, with exchange offices closed] to see how rate, officially 15900 rials to 1 $, develops."

Erdbrink adds this photo of an exchange office which shut its doors today:

Mahmoud Bahmani, the head of the Central Bank, has warned that he will resign if he is not given a free hand to deal with the crisis. He added, "If some organisations continue with current policy, cooperation with them becomes very difficult."

After authorities shut down currency websites on Wednesday, in an attempt to impose a "proper" rate of 14000:1, Aftab has launched its own page on current rates.

1300 GMT: Oil Watch. Sources say China will halve imports of Iranian crude oil for a second consecutive month, amidst a dispute over payment terms.

Sinopec, which processes around nine-tenths of China's Iranian oil imports, is insisting on 90 days to pay for imports, while Iran wants payment in 60 days.

China is the leading customer of Iranian oil.

1250 GMT: Currency Watch. Iranian Students News Agency has documented the bungled regime effort to control the open-market currency rate on Wednesday, noting the artificial level of 14000:1 for the Iranian rial vs. the US dollar, supported by injections of foreign currency with commands to vendors and the blocking of websites to prevent information circulating about the "real" level of the rial.

ISNA notes that the effort soon collapsed as people came to the main exchanges at Ferdowsi and Sabzeh Meydan to check the rate that vendors were offering, rather than the published level.

The website said that the rial opened at 15920:1 this morning, but demand for dollars soon moved the rate to 16200:1.

Journalist Jason Rezaian, in Tehran, confirms that the main currency website Mesghal is still blocked.

1200 GMT: Budget Watch. Minister of Health Marzieh Vahid-Dastjerdi has said that her Ministry faces a $2.1 billion budget deficit, as the government’s subsidy cuts have had a “significant impact” on health costs.

1151 GMT: Currency Watch. More than 100 Iranian businessmen have protested in front of the foreign exchange office in Dubai because they did not receive currency. The demonstration only ended when the Irnaian Ambassador to the UAE, Mohammad Fayyaz, promised he would contact the head of the Central Bank to arrange for the money.

1147 GMT: CyberWatch. Minister of Communications Reza Taghipour has said slow Internet speed in Iran is due to a cut cable in the Persian Gulf and a fire in Russia, rather than regime restrictions and the preparation of a national Intranet detached from the Worldwide Web (see 0835 and 0850 GMT).

1143 GMT: Elections Watch. Bibak News, the outlet of Ayatollah Mesbah Yazdi and the Islamic Constancy Front, has declared that Imam Ali, Shia's first Imam, was chosen by people in "free elections".

The Islamic Constancy Front is in a running battle with other conservative and principlist groups in the Unity Front.

1139 GMT: Dissent Watch. The Ministry of Intelligence has banned dissident cleric and blogger Mehdi Khazali from leaving the country.

Khazali, the son of a prominent ayatollah, has been detained on several occasions since the 2009 Presidential election and is currently free on $180,000 bail.

1135 GMT: Economy Watch. An EA correspondent reveals another serious issue in the Iranian economy:

There has been little attention to a recent decision by the Central Bank to provide unlimited foreign currency --- at the "official", rather than the "open-market" rate --- to any importer or exporter who presents the correct documentation. This directive was published in mid-December before the current exchange rate dance.

>So if you were to import watches from the UAE for $500,000 dollars, you would need to show all documentation and you would get the money at the point of import --- and not a cent more.

The trouble is, this currency is given out upon receipt of complete documentation, which compels many to avoid doing so because of reasons such as tax avoidance.

This is probably what compels many to resort to their own imports, obviously at non-CBI [official] rates.

The effect? Fewer imports into Iran, and those that do get through are more expensive.

1035 GMT: Supreme Leader Watch. Amidst all the issues in Iran at the moment, we note that Ayatollah Khamenei has used his latest speech to pronounce that the "West" has led women astray.

1025 GMT: Elections Watch. Esmail Gerami-Moghaddam, a spokesman for the Etemade Melli party of 2009 Presidential candidate Mehdi Karroubi, has confirmed that the party will not be putting forth candidates for March's Parliamentary elections.

1020 GMT: Economy Watch. Najmeh Bozorgmehr of the Financial Times summarises, "Iran Warned Over Mounting Unemployment":

Following years of unemployment after graduation, Hamid, a 26-year old electrical engineer, left his home town of Bobol on the Caspian Sea last year and moved to Tehran in search of better prospects. But six months later, he has resigned himself to driving a taxi to make ends meet.

“It is four years I have been looking for a job, but I am certain now that I have no chance,” Hamid says. His brother Saeid, 24, an agricultural engineer who joined him in moving to the capital, has also had no luck.

The brothers, like millions of Iranians, are experiencing a national unemployment crisis that is hitting the young and educated the hardest. The latest official figures released by the Iran Census Centre say urban unemployment stands at 12.5 per cent, rising to 29.1 per cent for the those under 25.

But Iranian analysts say the real figures are as much as double that, and predict the struggles of the unemployed will have serious political and social consequences in a region where youth-driven protest movements are redefining the political landscape.

Abbas Vatanpour, a former Iranian representative at the International Labour Organisation, warned in December that bad economic policy was causing joblessness to rise “day by day”. He thinks youth unemployment could be as high as 50 per cent.

Educated youth are struggling the most. Abdolreza Sheikholeslami, the minister of labour, said in September that university graduates were 10 times more likely to be out of work than those who hold high school diplomas or lesser qualifications.

1015 GMT: All-Is-Well Alert. Minister of Economy and Finance Shamseddin Hosseini has said Iran's non-oil exports reached $32 billion from March to December 2011, a 33% rise compared to the previous year.

Oil accounts for more than 80% of Iran's exports, but in early October, President Mahmoud Ahmadinejad announced hplans to boost the value of non-oil exports to $60 billion by March 2013.

1005 GMT: Currency Watch. It appears that, having failed to impose a rate of 14000:1 for the Iranian rial vs. the US dollar on the open market (see 0655 GMT), Iranian authorities are now allowing the key currency site Mesghal --- forced to put out the false rate on Wednesday --- to offer accurate information.

Mesghal currently has the exchange rate at 15950:1, close to its market level on Tuesday and the "real" rate on the Tehran street yesterday.

0955 GMT: Protest Watch. The Mothers of Mourning, prominent in their weekly gatherings in Tehran's Laleh Park after the violence and detentions following the 2009 Presidential election, have issued a statement about the continued imprisonment and pressure on political activists: "Who Threatens National Security, Mothers or Rulers?"

0850 GMT: Cartoon of the Day. As the regime steps up control of the Internet (see 0835 GMT) and reportedly moves toward introduction of a national Intranet detaching Iranians from the Worldwide Web, an illustration of the effect on Internet speed within Iran:

0845 GMT: Sanctions Watch. The Wall Street Journal follows up on the story, reported in EA yesterday, that European Union governments have agreed in principle to cut off imports of Iranian oil.

The decision will be announced at a meeting of EU foreign ministers on 30 January; however, the timing of the suspension is still to be determined. EA correspondents and sources, while confirming the news of the EU's intentions, project that implementation will not be before late spring or earlier summer, allowing time for alternative supplies to be arranged for countries such as Greece and Italy.

The Journal also considers whether South Korea and Japan, given their imports of oil from Iran, will adopt tougher sanctions. South Korean officials may meet with American counterparts this month to negotiate next steps.

0835 GMT: CyberWatch. Golnaz Esfandiari updates on new measures by Iran's cyber-police to monitor and restrict use of the Web in Internet cafes. The personal information of visitors, including name, father's name, national ID number, and telephone number, will be registered. Cafe owners must keep the personal and contact information of the users and a record of their browsing history for six months.

The cafes must also install closed-circuit cameras and keep video recordings for six months. Installation of circumvention tools allowing access to banned websites is illegal.

The cafes have 15 days to implement the restrictions, announced on 3 January.

0655 GMT: We start again with the currency situation. On Wednesday, Iran's Central Bank held emergency meetings with government officials, businessmen, and economists and took steps to settle an Iranian rial which had fallen 35% over four months --- and 15% in 48 hours --- against the US dollar.

Some of the measures appeared to be practical responses to the fall. The Bank put restrictions on the "traveller's rate", which allowed Iranians travelling abroad to obtain dollars and other foreign currencies on preferential terms. And --- if it occurred --- there was the story that $200 million in dollars had been injected into the Tehran market.

Others, however, smacked of desperation. Even though the rial was around 16000:1 vs. the dollar, Iranian officials ordered currency websites and State media to put out the message that the rate was 14000:1. Central Bank inspectors told traders that, in an "open market", they must sell dollars at that level.

The plan soon fell apart. Currency exchanges did not believe the 14000:1 number, even though it was on Meshgal, the leading website guiding their trade, and the site was soon blocked inside Iran, even though it was open outside the country. The traders defied the inspectors: they simply held on to their dollars, waiting for the artificial measures to pass, or went on the streets selling dollars at a rate between 15700:1 and 16000:1.

Of course, this has not stopped the regime's "reality" that the rial had suddenly strengthened by more than 20%. Having ignored the currency crisis story all week, State news agency IRNA put out the message through its English-language Iran Daily:

And Mesghal, until 24 hours ago the sign that Iran --- for all its economic problems, for all the other false and hidden information about the state of the economy --- was still pursuing open trade, still announces the fictional rate of 14000:1.