Officials blame “enemy”, insist an “abnormal situation”
Iran’s regime scrambled for excuses and a way out of a currency crisis on Monday, as the rial continues its historic collapse.
The currency fell more than 5% on Monday, on top of a slide of more than 30% on Sunday. It now stands at 119,000:1 v. the US dollar, compared to 85,000:1 on Saturday and about 45,000:1 in January.
With the unprecedented drop threatening economic chaos as prices rise and production is disrupted, the Central Bank continued its declaration that the fall is due “mainly to enemies”. The Bank, focusing on US sanctions rather than long-standing internal issues, insisted that the devaluation had nothing to do with Iran’s “economic realities”:
Recent developments in the gold and forex markets are part of the conspiracies hatched by the country’s enemies in order to agitate the economy and rob the people of their psychological security.
Speaker of Parliament Ali Larijani also played the foreign card, announcing on Monday that “some enemy intelligence services are seeking to sabotage the Iranian economy”.
Following Government discussions on Monday, First Vice President Eshaq Jahangiri echoed the Central Bank by insisting that the situation was unusual and that the economy will soon return to stability. He added on Tuesday, as he arrived in Kermanshah in western Irah, that the new Bank head — Abdolnasser Hemmati, appointed last week — has just started working to resolve the situation in coordination with the Government’s economic team.
Jahangiri gave no details of any specific policies or actions. Hemmati said Sunday that the crisis will spur necessary “banking reform”.
The Iranian judiciary announced the arrest of 29 individuals on charges of disrupting markets, proclaiming that more detentions are under way. Spokesman Gholamhossein Mohseni Ejei said, “The charges of some of the suspects are tantamount to corruption on Earth,” which can lead to a death sentence.
Since January, authorities have periodically tried to round up unofficial currency traders, without any apparent effect on the rial’s value.
The currency broke its historic low, set in 2011-12 under the Ahmadinejad Administration, at the start of the year. Government steps such as a unification of the official rate at 42,000:1 v. the US dollar, a rise in interest rates to encourage saving, and a switch to the Euro as the reporting currency failed to check the fall.
The devaluation was then accelerated by concerns over instability following Donald Trump’s May 8 announcement of US withdrawal from the July 2015 nuclear deal and of expanding American sanctions, to be implemented comprehensively from November.
Iran Sets Terms for Any Talks with Trump
Iran has responded to Donald Trump’s sudden remark that he will meet Iranian leaders without preconditions.
On Monday, Trump surprised his own staff as well as observers by putting aside — at least for one comment — his Administratin’s pursuit of regime change. He said at a press conference alongside the Italian Prime Minister:
“I would certainly meet with Iran if they wanted to meet. I do believe that they will probably end up wanting to meet. I’m ready to meet whenever they want to.
No preconditions. They want to meet, I’ll meet, whenever they want.
Trump’s declaration appeared to be due more to his personal belief in his ability to make deals, rather than a change in US approach. Secretary of State Mike Pompeo quickly said that US policy, including its departure from the July 2015 nuclear deal and its expansion of sanctions, has not changed. On Tuesday, Israel said it had received assurances from US officials that there was no alteration.
Hamid Aboutalebi, an advisor to President Hassan Rouhani, set out terms on Twitter — “Respect for the great Iranian nation, end of hostilities, and America’s return to the nuclear deal”:
احترام به ملت بزرگ ایران،
کاهش خصومت ها،
وبازگشت آمریکابه برجام،
هموارکننده مسیر سنگلاخ کنونی است؛ گفتگوی تلفنی روسای جمهوردوکشور درUN در۱۳۹۲،بر این باوراستواربودکه می توان با التزام به ابزارگفتگودرمسیر اعتمادسازی گام برداشت.
برجام دستاورد التزام به گفتگو است؛بایدآن را پذیرفت.
— Hamid Aboutalebi (@DrAboutalebi) July 30, 2018