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Tuesday
Jan222013

Iran Live Coverage: Crisis at the Central Bank?

Central Bank head Bahmani & President Ahmadinejad2055 GMT: Defiance of the Day. After recent admissions that US-led sanctions are having an effect on Iran's economy, President Ahmadinejad has returned to his tough posture. Speaking to a crowd in the western city of Hamedan, he sent the message:

Don't buy our oil? To hell with you.

It's better if you don't buy...Ten times more money will head to people's pockets through the inventions of our scientists.

2005 GMT: Assurance of the Day. A Press TV video features the visit of MPs to Evin Prison, where many of Iran's political detainees are held. The spokesman of Parliament’s National Security Committee, Seyyed Hossein Naqavi-Hosseini, proclaims:

Evin Prison is managed under proper conditions. Some inmates complained about food and sleeping conditions, they made several requests and proposals, which we will discuss with Judiciary officials. The idea is to improve their conditions, even though we know that prison is not a good place for anyone.

1925 GMT: Tough Talk of the Day. Speaker of Parliament Ali Larijani, speaking to a meeting of the Islamic Inter-Parliamentary Union in Sudan, has downplayed threats of military action and the effects of sanctions on Iran.

“As the peaceful nuclear (energy) program of the Islamic Republic of Iran has been indigenized, it will not be destroyed by any strike or pressure,” Larijani said. “Moreover, the country’s response to any possible attack against its nuclear installations will be stinging....Since [the US and Israel] have a little wisdom [left], they fear Iran’s response.”

Larijani told reporters that the US-led sanctions against Iran and the pressure imposed on its economy have failed to stop the country from pursuing its nuclear energy programme.

At home, Larijani has said that sanctions only account for 20% of Iran's economic problems, with 80% due to Government mismanagement.

1905 GMT: Oil Watch. China's December crude oil imports from Iran rose to their second-highest monthly level in 2012, supported by an easing in shipping delays as Iran expanded its fleet.

China, Tehran's top oil customer, bought 593,390 barrels per day of Iranian crude in December, the highest amount since June's figure of 633,000 bpd.

Despite the December boost, Chinese imports from Iran fell 21% to 438,448 bpd in 2012.

1705 GMT: Economy Watch. Marcus George of Reuters offers a full overview of the economic and currency difficulties, including some new information: and an appearance by EA WorldView

Reuters contacted currency traders who offered the rate of 35,400-36,250 to the dollar on Tuesday, little changed from Monday but down some 8 percent from Sunday, when reports of [Central Bank head Mahmoud] Bahmani's possible departure first emerged....

The volatility in rates and difficulties in making transfers have crippled businesses that import goods from abroad because of slackening demand.

"Sales are dropping. My customers are waiting until the exchange rate is better before buying," a Tehran-based IT trader told Reuters by phone. "It's been like this for months."

Iranians have seen the price of food and goods rocket and their spending power slump, especially regarding imports which are directly affected by the weakening rial.

Mohammad, an Iranian businessman in Isfahan, said the price of a Nissan Maxima in Iran had nearly quadrupled in the last 10 months to around 1.2 billion Iranian rials ($35,000).

"These are blood prices," he told Reuters by email. "No matter how hard we work, there's no money in it for us."

1555 GMT: Nuclear Watch. Laura Rozen of Al-Monitor sees a clue to Iran's negotiating position in a public essay by Mahdi Mohammadi, "one of two key architects of Iran’s nuclear negotiating strategy under the team led by Iran National Security Advisor Saeed Jalili". He wrote almost two weeks ago:

The United States should...recognize Iran’s right to enrich uranium and Iran, in return, will announce that it has no plan to build nuclear weapons. In the next stage, the US and the European Union should remove all unilateral sanctions against Iran and Iran, for its part, will take immediate steps to address the remaining concerns of the International Atomic Energy Agency (IAEA) which the Western countries claim to be very important. In fact, a new round of IAEA’s inspections of and access to Iran’s nuclear sites will begin. In the third stage, Iran will be ready to negotiate about 20-percent enrichment provided that the United Nations Security Council will annul all its sanctions resolutions against Tehran.

Rozen's interpretation is that this is a "hard-line" position because Iran will not concede enrichment of 20% uranium at the same time that "all unilateral sanctions" are lifted. Instead, Tehran will "be ready to negotiate about 20% enrichment" if the UN sanctions --- far less stringent than the US and European measures --- are removed.

1545 GMT: All the President's Men. Will the conflict over President Ahmadinejad's senior aide Saeed Mortazavi turn into a showdown?

Ahmadinejad has defied court orders for the suspension of Mortazavi --- accused of involvement in the abuses and killings at the Kahrizak detention centre in 2009 --- for months. In his latest move, he is defying an Administrative Court's command to remove Mortazavi as head of Social Security Funds.

The court ruled that the Government could not use a technicality to keep Mortazavi in his post, but the 1st Vice President, Mohammad Reza Rahimi, has persisted. He decreed that Mortazavi is the "administrator" --- and therefore not the "head", subject to judicial decision --- of the Fund.

The deputy to Parliament's Supervisor, Reza Tali Nik, has said that Mortazavi’s appointment is illegal. Leading MP Ahmad Tavakoli said, "It seems Ahmadinejad does not want to remove the tension and wants to keep Mortazavi at any cost."

MP Ali Motahari has gone farther, threatening the impeachment of the Minister of Labor if Mortazavi is not removed.

1455 GMT: The House Arrests. Salimi Namin, the former editor Kayhan, is the latest figure to press the argument that the detained opposition leaders Mir Hossein Mousavi and Mehdi Karroubi are not "heads of sedition".

Writing for Alef, the website linked to conservative MP Ahmad Tavakoli, Namin defended politician Habibollah Asgarouladi, who has been criticised for making similar remarks about Mousavi and Karroubi. Namin said "people with low capacity" were making the attacks.

1355 GMT: Currency Watch. An Iranian currency page on Facebook claims the Rial has slipped more than 2% today to 35800:1 vs. the US dollar.

1005 GMT: Economy Watch. Mohammad Azad, the head of the Union for Iron Sellers, has said the cost of iron has doubled in the past 12 months: "A year ago in the first week of the month of Bahman the price of iron beams and rebar was 900-950 Tomans, but this amount has increased...to reach 1,900 Tomans."

0955 GMT: The Battle Within. Hojatoleslam Abdol Ali Govahi, the Supreme Leader's representative in the Tehran Revolutionary Guards, has claimed that the “deviant current" --- usually a label for President Ahmadinejad’s inner circle ---are intent on causing problems for the regime in June's Presidential election: "We have a duty more than ever to make the people aware of this most dangerous current, so the country goes toward peace and tranquility.”

0925 GMT: Conspiracy Theory of the Day. The hard-line Mashregh News explains that the Israeli intelligence service Mossad and the "Jewish mafia" killed President John F. Kennedy: "Perhaps [David Ben Gurion’s] last action as [Israel's] prime minister was to order Mossad to plan the assassination."

0625 GMT: Political Prisoner Watch. Attorney Nasrin Sotoudeh, serving a six-year sentence, returned to Evin Prison on Monday after a four-day furlough.

0605 GMT: Bank Watch. Monday's news was taken over by the confusion and apparent crisis at the Central Bank, blamed by many politicians for the Islamic Republic's economic and currency problems.

The conflict escalated on Sunday when Parliament demanded an enquiry into the Bank's operations. Reports circulated that Bank head Mahmoud Bahmani had resigned.

President Ahmadinejad appeared to stem the immediate problem by rejecting Bahmani's resignation, but the Supreme Audit Court then ratcheted up the pressure. The court ruled that the Bank head must be dismissed, as he had violated financial regulations with unauthorised withdrawals from other banks.

The legal finding intersects with the charge of MPs that Bahmani had been acting on orders from Ahmadinejad, taking the money to help fund the President's controversial subsidy cuts programme.

The latest tension adds to the prospected of renewed currency difficulties. The Rial fell between 4 to 8% --- it is hard to be precise, given the regime's clamp-down on the open market from October --- to about 35300:1. That is not quite as weak as the level that forced the Bank and Government to intervene in the autumn, but it is about a 30% fall in seven weeks.

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