UPDATE 1415 GMT: Iran’s currency has reached an all-time low amid fears over the future of the nuclear deal and US sanctions.
The rial fell to 63,000:1 against the US dollar on Saturday, breaking the previous low of 61,000:1 last month.
The Government stepped in with a series of measures, including the unifying of offical and open-market rates at 42,000:1, rises in interest rates, and arrests of unofficial currency dealers. However, the measures only brought a small recovery in the rial — which has lost 30% in value against the US dollar in recent weeks — before this week’s plummet.
UPDATE 1400 GMT: Far from backing down, President Hassan Rouhani appears to be setting up for a showdown with other factions in the regime — and even the Supreme Leader.
Rouhani is criticizing the ban of the Telegram messaging application, used by about half of Iran’s 80 million people. In a reference to the Supreme Leader, he suggested the order came from officials “at the highest level”.
Authorities temporarily blocked the application during nationwide protests in January, accusing it of hosting groups advocating violence.
Earlier this month the Supreme Council on Cyberspace ordered a block on Telegram on mobile phones. Then on Monday, Iran’s Culture and Media Court extended the command to internet service providers.
Tehran’s Prosecutor General, Abbas Jafari Doulatabadi, also ordered the block to ensure that users cannot bypass it by using a virtual private network.
In a post on Instagram, Rouhani wrote:
No social network or messenger were blocked by this government and won’t be blocked.
If at the highest level of the system a decision has been made to restrict or block the people’s communications, the real owners of this country, which are the people, should be aware of this.
He added that the ban is “opposite to democracy”.
Iran’s hardliners are preparing to act against centrist President Hassan Rouhani if Donald Trump imposes sweeping US sanctions, effectively breaking the July 2015 nuclear deal between Tehran and the 5+1 Powers.
Multiple officials and well-connected sources told Reuters that a de facto US withdrawal, with the economic consequences for Iran, will lead to a hardline attack on Rouhani — whose two Presidential campaigns have been based on completion of the deal and the Islamic Republic’s economic recovery.
Trump must decide by May 12 whether he will renew waivers on widespread Congressional sanctions, repeatedly suspended because of the deal. He is widely expected to let the waivers lapse.
A “senior Iranian official” said there will be an initial display of unity in Iran, where the regime has promised a swift response to any US sanctions: “But when the crisis is over, hardliners will try to weaken and sideline the president.”
A relative of the Supreme Leader added, “Rouhani will be in a no-win situation,” promising that Iran’s system of velayat-e faqih, with ultimate clerical authority, will not be weakend.
Political analyst Hamid Farhvashian also warned of in-fighting if the US steps away from deal, signed between Tehran and the US, France, Germany, China, Russia, and the UK after more than a decade of tension and talks: “It will…lead to a backlash against the moderates and pro-reformers who backed Rouhani’s detente policy with the West…and any hope for moderation at home in the near-future will fizzle out.”
The regime is already serious economic problems amid uncertainty over the future of the agreement and the prospect of tougher sanctions. Foreign companies, especially from Europe, have been reluctant to confirm trade and investment deals. Production has been hindered by mismanagement and financial issues, even as the Supreme Leader has called for Iranian self-sufficiency and sharp restrictions on imports. There is a historic currency crisis, with Government measures fail to halt the slide of the rial to an all-time low of more than 60,000:1 v. the US dollar.
A senior offical said Rouhani will serve out his term to 2021 — “His removal would be a sign of weakness for the system. It would harm its legitimacy abroad” — however, “he will be blamed and pressured for the economic malaise”.
Other officials said the Revolutionary Guards, with their widespread interests in the Iranian economy, will benefit despite the problems. A restriction of foreign investment reduces competition for the Guards’ firms, and the elite military organization has also reportedly sheltered its assets, with many of them priced in dollars.
A hardline politician summarized:
Sepah [the Guards] is an asset for Iran. They protect Iran whenever needed….They rescued the economy when the enemies wanted to crush us with sanctions.
If European investors yield to America’s pressure and leave Iran, then Sepah will take over.