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Saturday
Jun022012

The Latest from Iran (2 June): Holding the Currency Line

See also The Latest from Iran (1 June): Through the Syrian Looking Glass


1552 GMT: All the President's Men. Prominent conservative activist Abdolhossein Ruholamini, whose son died in the abuses in the Kahrizak detention centre in summer 2009, said earlier this week that charges were being filed against Saeed Mortazavi, then Tehran Prosecutor General and now Presidential advisor.

Now Ruholamini has claimed that the Government was informed about the filing of the charges against Mortazavi before it controversially appointed him as head of the Social Security Fund.

1255 GMT: Currency Watch. The Iranian Rial has fallen 2% to 18000:1 vs. the US dollar, with gold prices also rising --- old gold coin is now at 690 thousand Toman (6.9 million Rial).

The Rial, propped up by the Central Bank and Government this spring, has lost 15% in value in the last month.

1245 GMT: Things That Make You Go Ummmm.... Former Speaker of Parliament Gholam Ali Haddad Adel, having failed to retake the post from Ali Larijani, has broken his leg in a football match. An EA correspondent asks the key questions, "Who broke it? And why?"

Meanwhile, 38 of the 290 MPs in the new Parliament still have not been approved to take their seats, one because of a six-month prison sentence for murder.

1235 GMT: Gold Watch. Khabar Online reinforces news that exports of Turkish gold to Iran have risen sharply --- up to 30-fold in some accounts --- this spring. Ankara is now sending 80% of its gold exports to the Islamic Republic.

1045 GMT: Political Prisoner Watch. Peyke Iran reports that five Azeri activists have been given sentences of up to one year by the Tabriz Revolutionary Court, while a Baha'i resident of Semnan has been handed a 4 1/2-year prison term.

1015 GMT: Tough Talk of the Day. Brigadier General Yahya Rahim-Safavi, military advisor to the Supreme Leader, has declared, “The politicians and the military men of the United States are well aware of the fact that all of their bases [in the Middle East and Central Asia] are within the range of Iran's missiles; and in any case, the US military forces in the region are highly vulnerable."

Rahim-Safavi added that, if the Islamic Republic is attacked, there is no spot in Israel that outside the range of Iranian missiles. He continued, “The Army and the Islamic Revolutionary Guards Corps have effective plans against any danger and have prepared themselves to confront any danger,” Rahim Safavi said. "We will inflict damage on them at the same level as they do [on us].”

0515 GMT: A quiet weekend for Iranian politics so far --- IRNA goes through the motions to feature the former Malaysian Prime Minister criticising war and sanctions, while Press TV tries to take advantage of the US Government's revelation that it has pursued cyber-warfar against Tehran for years, with President Obama expanding the effort.

So we turn to the lead story in Fars: the announcement that Sunday is the last day that Iranians can get 24% bonds in exchange for gold coin --- from Monday, the rate will be 20%.

Not exactly an article to get the heart racing, but it is still a significant measure of the Central Bank's efforts to get control of the Iranian currency market. By reducing Iranians' demand to hold gold, the Bank is hoping to limit the price while propping up the Iranian Rial.

The Bank's months-long effort, including the bonds-for-gold initiative, has had limited success. The gold price has fallen since it spiked earlier this year, now standing at 668,000 Toman (about $430 at official rate) for old gold coin. However, the Iranian Rial, after bouncing back in the spring from its historic lows at the start of the year, is still shaky. The open-market rate is 17680:1 vs. the US dollar, compared to 15800:1 at one point last month.

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