The Latest from Iran (10 October): Economic Fantasy and Reality

Iran Special: The US Nuclear "Experts" at ISIS --- When Propaganda Replaces Analysis
The Latest from Iran (9 October): Triple-Digit Inflation?

---

1815 GMT: Currency Watch. It looks like the Central Bank, trying to preserve foreign reserves, is restricting trade in the Iranian Rial. Reports indicate the Bank has declared that foreign currency accounts cannot be opened with Rials, but interest on the accounts will be paid in the local currency.

Meanwhile, an indication of the "real" price of gold, amidst the blackout on information. Khabar Online claims that advance sales of gold coins are trading at 14.44 million Rials (about $1200 at official rate).

That is an increase of about 11% on the "current" price, last posted on Tuesday.

1809 GMT: Political Prisoner Watch. The mother and father of Behnoud Ramazani, who was killed by security forces in March 2011, have been given eight-month prison sentences; his aunt has received a four-month term.

Their crime? They visited Ramezani's grave.

1532 GMT: Nuclear Watch. The International Atomic Energy Agency has denied that its head, Yukiya Amano, plans to visit Iran to resolve issues over inspection and supervision of Tehran's nuclear programme.

The Iranian Foreign Ministry's website, quoting Foreign Minister Ali Akbar Salehi, said Amano would be travelling to the Islamic Republic, but gave no date.

Serge Gas, the IAEA's director of public information, said, "The IAEA has seen media reports that Director General Amano will visit Iran to discuss nuclear issues. There are no such plans at this time."

Amano said last week that the IAEA had yet to agree a date for further talks with Iran and, in contrast to his optimism this spring, that he had little hope for a resolution in the near-future.

1520 GMT: Economy Watch. The Cabinet, after a meeting today, has said that it is ordering officials to review rising prices of imports, especially foodstuffs, and to take necessary steps over the "illegal" and "arbitrary" acts of "profiteers".

1438 GMT: Currency Watch. Mehr reports that the Central Bank is preparing to sell gold coins as well as providing foreign exchange in its "trade room" for importers.

Aftab claims that the price of old gold coin has dropped after reports of a sharp rise this week --- it says the coin is now selling for 12.6 million Rials (about $1030 at official rate).

The site says that there is no trade in foreign currency, with only "secret deals" for US dollars.

1431 GMT: Scuffle Watch. Iran Green Voice claims that a scuffle in the Digital Media Fair led to the handcuffing by "moral police" of an advisor of the Ministry of Culture with other staff of the Ministry arrested.

The clash reportedly started when the moral police objected to a booth displaying "cyber-dangers for youths".

1411 GMT: Rafsanjani Watch. The lawyer for Mehdi Hashemi, the detained son of former President Hashemi Rafsanjani, has said he has no contact with his client in more than two weeks.

Alizadeh Tabatabaei claimed that Hashemi, arrested last month after he returned from three years in exile in Britain, was interrogated for 11 hours on each of two days.

1405 GMT: Economy Watch. Radio Farda profiles a decline in Iran's pistachio industry, with the claim that exports have fallen by more than 30%, with sanctions hampering transport and money transfers, and that domestic demand is low because people have no money.

1335 GMT: Espionage Watch. We noted last week that the Ministry of Intelligence has established a new website, vaja.ir, inviting Iranians to submit information of suspicious activity. The site is now open to IP addresses outside the Islamic Republic.

So what's the featured entry? Vaja presents what it claims is an address by the Iran officer of the US National Intelligence Council, Jillian Burns, in which she sets out a plan to: 1) "paralyse middle- and high-ranking officials"; 2) "create a fitna [sedition] movement, with anti-Revolution [Iranians] and foreigners uniting to expand discontent with economic situation"; 3) "claim widespread corruption"; 4) "intensify rifts within the nezam [system] and weaken it so people lose hope that it can solve economic problems"; 5) "block nuclear talks to cause more economic shocks".

Fars, linked to the Revolutionary Guards, has reproduced the report.

I can no English-language version of the supposed talk. Burns served for a few months in the National Intelligence Council but left in June for a Foreign Service assignment.

1225 GMT: Protest Watch. About 200 relatives of detainees on Death Row have gathered outside the Supreme Leader's house to call for a halt to executions.

Activists claim at least 488 people have been executed in the past year while 333 people have been sentenced to death.

1127 GMT: Economy Watch. Asr-e Iran reports that automobile production is down by 42% in the first half of the Iranian year --- including 66% in August/September --- and mini-bus production has fallen by 92.7%.

1120 GMT: Supreme Leader Watch. In his speech today, the Supreme Leader referred to last week's emergence of public protest in Tehran, amid the currency crisis and the closure of the Tehran Bazaar: “A few people on two streets burned two trash bins and our enemies became happy. Our enemies should know that Iran will overcome these problems and will defeat them again.”

He added, "The US witnesses demonstrations every day."

While declaring that Iran would prevail over sanctions (see 1052 GMT), Ayatollah Khamenei said they had caused "problems", compounded by "some mismanagement".

1109 GMT: Currency Watch. Mehr reports a "strong" presence of security forces near foreign exchanges in Tehran today.

Officials announced this week that 50 "disruptors" of the currency market have been arrested since last week.

1052 GMT: Supreme Leader Watch. In a signal against resumption of negotiations with the "West", the Supreme Leader has told a crowd in northeastern Iran, “They pretend that that the sanctions will be lifted if the Iranian nation gives up nuclear energy. They lie. They make decisions out of grudge and aversion [toward Iran] and impose irrational sanctions.”

Ayatollah Khamenei declared that the Islamic Republic would stand firm against the economic pressure:

Sanctions are not an issue of yesterday or today. Sanctions have existed from the very beginning; they intensified the sanctions, which didn’t work; they intensified them again; these won’t work either."

1043 GMT: Ahmadinejad Watch. Khabar Online reports that the petition to interrogate the President has been submitted with the signatures of 102 MPs --- far more than the 74 required --- to the Board of the Majlis.

The petition emphasises economic issues, notably the Government's mismanagement of the currency crisis.

1035 GMT: Currency Watch. The blackout on foreign exchange rates continues, with Germany's Welt the latest international website to note the suspension of information via Mesghal and Mazanex.

1025 GMT: Sanctions Watch. President Obama has issued an executive order implementing the sanctions legislation of theIran Threat Reduction and Syria Human Rights Act of 2012, signed into law in August.

The law closes loopholes in existing sanctions and adds penalties for those aiding Iran’s petroleum, petrochemical, insurance, shipping, and financial sectors. It also broadens the list of available programmes under which sanctions can be imposed on Iranian individuals and entities.

Elsewhere, Germany has toughened its law banning export of dual-use goods to Iran.

1015 GMT: Supreme Leader Watch. State news agency IRNA highlights the visit of the Supreme Leader to Bojnourd in northeastern Iran, writing that he was met by "thousands of enthusiastic" people.

0755 GMT: Tough Talk Alert. Unsurprisingly, Iranian State media and the President prefer headlines far away from the economy this morning, with Mahmoud Ahmadinejad telling the regime's international TV channel Jam-e Jam, “I think that all the wise people of the world know that such a move [attacking Iran] by this regime (Israel) is tantamount to an absolute suicide."

0545 GMT: Tuesday was distinguished by an episode of economic fantasy. As economists inside Iran warned of rising inflation, as most trade in foreign exchange and news of that trade was suspended, as the President's subsidy cuts programme was formally buried by Parliament, the International Monetary Fund put out the numbers in its World Economic Outlook that all would be well in Iran in a few months.

The IMF has put out fantastic projects on Iran before, notably in Summer 2011, but this one --- like its predecessors, "researched" by conversations with Government agencies --- emerges at a time when even leading officials have warned that Iran is in a state of "war" comparable to the 8-year battle with Iraq in the 1980s. No surprise, then, that State media --- skipping over the one dose of reality in the IMF report, a note of Iran's first contraction in GDP since 1994 --- cheered that the Fund has hailed Tehran's progress despite sanctions.

Open-market rates for the Iranian Rial, not just against the US dollar but against all foreign currencies, are still suspended, while reports indicate that there is almost no trade at official exchanges. We will be watching the Central Bank's "trade room" for importers, set up two weeks ago to provide foreign currency --- yesterday Fars signalled that US dollars were not being sold. Given the certainty that those dollars are still being demanded, the likely explanation is that the Bank is having problems drawing from foreign reserves to maintain supply.