Iran worried over plunging currency

Iran worried over plunging currency

MARC BURLEIGH / TEHRAN - Agence France-Presse
Iran worried over plunging currency

A woman walks into an exchange office in Tehran. The rial was trading at 15,800 to the US dollar yesterday. REUTERS Photo

Iranian officials, lawmakers and media yesterday worriedly snapped their focus on to the sanctions-hit economy amid a sudden plunge in the currency.

The rial was trading at 15,800 to the U.S. dollar - its lowest point ever, and an indication of the fragility of the economy as international sanctions bite.

Concerned lawmakers summoned the economy minister, central bank chief and foreign ministry officials to testify on the economic situation and how Iran could weather more sanctions.

President Mahmoud Ahmadinejad put the currency slide down to “rumors” started by profiteers nd sought to reassure the public that the economy was “stable and calm,” in a speech broadcast on state television.
“We are not experiencing any particular problems,” he said, asserting that foreign exchange reserves were at a historic high.

On Tuesday, Ahmadinejad said “mischief from outside and inside” the country was affecting gold and currency prices, according to Iranian media.

Central bank figures quoted by Iranian media say the amount of rials in circulation has jumped 20 percent in the past five months as more money is printed.

That in turn has driven inflation sharply higher. The central bank says it is now running at 19.8 percent per annum.

The United States and Europe are expected to soon announce additional sanctions on Iran, targeting the country’s vital oil sector and central bank.