The Latest from Iran (6 October): "There is No Crisis"
Saturday, October 6, 2012 at 11:59
Scott Lucas in Abdolfattah Soltani, Ayatollah Ahmad Khatami, EA Middle East and Turkey, Heydar Moslehi, Iran Currency Crisis, Mahmoud Bahmani, Majid Tavakoli, Mehdi Fakhrzadeh, Middle East and Iran, Mostafa Karim-Beigi, Saeed Aghapour, Saeed Jalili, Tehran Bazaar, Zahra Kazemi

One of a series of photos in Mehr showing a re-opened Tehran Bazaar


See also The Latest from Iran (5 October): The Regime Prays for the Weekend


2053 GMT: Currency Watch. A high-ranking manager of Eqtesad Novin Bank has been arrested on charges of illegal currency deals and loans, according to Rah-e Sabz.

Tehran Prosecutor General Abbas Jafari Doulatabadi says "30 main disturbers of the currency market" have been arrested, one with $400,000.

2045 GMT: Bazaar Watch. The opposition site Rah-e Sabz reports that the Qazvin Bazaar in northwest Iran will go on strike tomorrow, with a protest at noon.

1745 GMT: Currency Watch. President Ahmadinejad has said that Iran's "problems" with its currency "cannot be denied".

And the cause? Ahmadinejad said, "The market is disrupted by the devil."

1735 GMT: Rafsanjani Watch. The lawyer for Mehdi Hashemi, the detained son of former President Hashemi Rafsanjani, has said that his client is banned from visits and that the charges against him are unclear.

1715 GMT: Foreign Affairs Watch (Libyan Front). Foreign Minister Ali Akbar Salehi has said that seven Iranian aid workers abducted in Libya in July have been released.

The men were handed over to Iranian Embassy officials in Tripoli.

1615 GMT: Currency Watch. Journalist Jason Rezaian reports from Tehran, "Just went to exchange office near Vanak Square. 1 USD= 28,500 rial, but they were only willing to sell a few hundred dollars."

1515 GMT: Currency Watch. Morteza Afzalifard, the spokesman for Parliament's Article 90 Commission, has alleged that some Iranians have set up bogus firms to make huge profits from the Central Bank's "trade room" of discounted foreign exchange for importers. He claimed there was no Government control of the currency market.

1455 GMT: Currency Watch. The conservative site Baztab, using the trading level for the Euro, claims the "real" rate of the Rial to the US dollar is 35300:1 today, not the posted rate of 27100:1.

Radio Farda reports from Dubai that the Rial is trading at 29000:1, but only because of restricted demand for the US dollar.

Mesghal posts a rate of 28500:1. Mazanex.ir has the same, but Mazanex.com only has this note "Unfortunately, domestic market prices are not available."

1325 GMT: Bazaar Watch. According to State news agency ILNA, Tehran Bazaar guilds and merchants have thanked the police for dealing on Wednesday with "a group outside the market wanted to wreak havoc" and "encouraging us with the increased sense of security".

1300 GMT: Nuclear Watch. Iran's lead nuclear negotiator, Saeed Jalili, has denied the existence of an Iranian nine-step plan for resolution of the dispute over Tehran's nuclear programme.

On Friday, US officials put out the story through The New York Times that Iran had put forth the proposal in July for a series of steps linking easing of sanctions to a winding-down of enrichment of 20% uranium at the Fordoo plant, culminating in a total lifting of economic restrictions for a full suspension of the enrichment.

The US officials made clear that Washington had rejected the initiative out of hand.

A video has been posted of Jalili's remarks to the Expediency Council.

This is the second notable denial in a week by Iranian officials of their reported move for agreement. Last week Tehran's envoy Ali Asghar Soltanieh claimed that an interview, in which he had put forward the Iranian willingness to suspend production of 20% uranium in return for the eased sanctions, had never taken place.

Jalili's denial is also curious because the "nine-point plan" appears to be the proposal put forward by the Iranians to the 5+1 Powers (US, UK, France, Germany, Russia, and China) in Moscow in June and then presented to journalists at the United Nations two weeks later.

1257 GMT: Currency Watch. Mohammad Hassannejad, a member of Parliament's Economy Committee, has said that more than 40 MPs have signed a demand for investigation of the Central Bank's actions.

1249 GMT: Economy Watch. Fars quotes housewives at the Tehran Bazaar on inflation: a set of coffee cups that was recently 10,000 Toman is now 30,000; a blanket that was 20,000 Toman is now 50,000.

1236 GMT: Currency Watch. An EA correspondent notes a BBC Persian report and summarises, "Many exchangers have removed the currency rate figures from their shop windows, and no real trading taking place. The number of informal street peddlers is far smaller than last week."

BBC Persian's Amir Paivar writes, "Traders tell me dollars injected by Iran Central Bank to couple of bureaux have no impact on market. Rial gain is by order. 'Trading foreign exchange? Not us!'"

One exchange employee confirmed to AFP, "We received an order from the Money Changers' Association (under control of the Central Bank) telling us to buy the dollar at 25,000 rials and sell at 26,000. Nobody is selling at this price and we are not trading."

1059 GMT: Currency Watch. Officials have said that students will receive the "trade room" rate, with a discount on the cost of foreign exchange, and have promised that problems of scholarship holders will be solved within two weeks.

1037 GMT: Remembering the Victims. Friends and family hold a birthday party for Mostafa Karim-Beigi, shot and killed by security forces during the Ashura demonstrations of December 2010:

1027 GMT: Political Prisoner Watch. The Committee of Human Rights Reporters expresses concern that there has been no news about detained student activists Mehdi Fakhrzadeh, Saeed Aghapour, and Mehdi Tavakoli.

1025 GMT: Bazaar Watch. The opposition site Kalemeh reports that about half the shops in the Tehran Bazaar --- especially those of gold and cloth merchants --- are closed, while there is a signficant presence of security forces.

One merchant told Reuters, "It is business as usual today. Shops are open and we are serving customers," but added, "Of course we are also watching the currency rates to see what is going to happen."

Another said, "The dominant thing on every merchant's mind is concern for tomorrow. What really bothers us is the instability of the prices, even more than the high value for the dollar. Merchants need to be able to plan for their business and with instability in currency rates, that is almost impossible."

1005 GMT: Currency Watch. An interesting note on the Mazanex site --- while it posts a rate of 26000 Rials to the US dollar, it adds, "We are unfortunately still unable to provide a reputable exchange rate for the internal market."

0955 GMT: Currency Watch. An EA correspondent explains the mixed situation of both the short-term strengthening of the Rial and the artificial limit of the boost:

The rate of 285000:1 for the US dollar has a limit of $5,000 per customer, and only very select exchangers, authorised and supplied by the Central Bank, are providing this.

Five thousand dollars for a traveller or for a student needing to pay a $15,000 tuition fee is not much, so the special rate is only suitable for those purchasing dollars to make a quick buck, not for those needing to spend them abroad.

The US dollar is still above 30000:1 elsewhere, and we have no clear news on the British pound and the Euro.

Still, this is a good move forward. The Central Bank had to start providing dollars to the open market.

But this is by no means a "solution". It's a band-aid.

0945 GMT: Honouring a Political Prisoner. Lawyer Abdolfattah Soltani, serving an 18-year sentence, has received the International Bar Association's Human Rights Award.

In a letter read to the IBA conference, Soltani said, "The ugly truth is that the political establishment in Iran, in many cases by using a few non-independent judges, has turned the whole judicial system into a tool for implementing their own wishes. They are using these courts as a heavy hammer to suppress the legitimate and legal demands of the population.”

Soltani, the co-founder of the Center for Defenders of Human Rights, is noted for his representation of activists and the family of the Iranian-Canadian photographer Zahra Kazemi, who was murdered in Evin Prison in 2003. He was convicted on charges of “propaganda against the system”, “participation in founding the Human Rights Defenders Centre”, "assembly and collusion against national security”, and “earning illegitimate assets” through his receipt of the Nuremberg City’s Human Rights Prize in 2009.

0940 GMT: Currency Watch. Khabar Online puts a question mark over today's good-news story of the stronger Rial. It reports queues to get dollars for 28500 Rials, with exchanges posting a rate of 30000:1. Elsewhere, the cost for a dollar is up to 50000 Rials, indicating concerns over the shortage of dollars that will be on offer after this morning's rush.

0922 GMT: Currency Watch. Mehr claims Mehr the Rial is trading at 29000:1 vs. the US dollar, with some exchanges selling at 25000:1.

Mazanex has now posted 26000:1, its first Rial-to-Dollar rate since Tuesday. Mesghal still shows 27000:1 --- its Mesghal.ir is also on-line after it was "Account Suspended" for four days.

The Central Bank's "trade room" is selling dollars at 25975:1.

Mesghal also claims gold prices have fallen sharply after an upward spiral over the last month. It puts the cost of old gold coin at 11 million Rials, a drop of more than 20% from Tuesday.

Minister of Intelligence Heydar Moslehi has been summoned by Parliament to report on the "domestic currency mafia directed by foreign forces". MP Arsalan Fathipour has said the head of the Central Bank, Mahmoud Bahmani, has also been summoned.

0722 GMT: Currency Watch. The Rial-to-Dollar rate, removed since Tuesday, has re-appeared on Mesghal. The claimed open-market level is 27300:1, a strengthening of the Rial by almost 30% from the last posted rate of 35500:1.

Mazanex still does not post a Rial-to-Dollar figure.

State news agency IRNA reports that the Rial has also risen today in the Central Bank's "trade room", which discounts the purchase of foreign exchange.

0537 GMT: Foreign Affairs Watch (Syrian Front). Al Arabiya has posted footage from insurgents claiming to be of three members of the Revolutionary Guards, captured near Aleppo.

0530 GMT: Economy Watch. Outside Tehran, the speeches of Friday Prayer leaders were marked by criticism of the Government and probing questions. One example: "Are we so weak that 20 people [a reference to the judiciary's claim of "ringleaders"] can hurt the currency?"

0528 GMT: Currency Watch. The Central Bank has extended its "trade room", with the provision of foreign exchange at a discount on the open-market rate, to Classes 3 to 6 of imported goods.

The open-market rate for the Rial, last posted on Tuesday afternoon, was 35550:1 vs. the US dollar. The discounted rate is between 26000:1 and 27000:1.

Formally the official rate of 12260:1 is offered to basic goods in Classes 1 and 2, although this was suspended in August for a month before the Bank launched the trade room.

The initiative started with a 2% on the cost of US dollars, offered to Classes 3-5, but the gap quickly grew to 35% with the fall of the Iranian Rial on the open market.

The Rial-to-Dollar rate, last posted on Tuesday afternoon, is still suspended on leading Iranian websites such as Mesghal and Mazanex.

0520 GMT: In his Tehran Friday Prayer, Ayatollah Ahmad Khatami insisted, "The circumstances in the country are normal and there is no crisis. We do have problems, and will also have them in the future. But there is no crisis.... If you are looking for crisis-ridden countries, take a look at those very countries which sanctioned Iran."

So this morning we are looking for the re-opening of the Tehran Bazaar, which has been largely closed since Wednesday. We will be watching for the resumption of the open market in foreign exchange. And we will be noting if life is "normal" on the streets of the capital.

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