40,000 Rials For The Dollar Record--Iran

By: Jabbar Fazeli, MD

The Iran rial hit an all time low with an exchange rate of 40,000 rials for the dollar today (1).

The Iranian government, short on hard currency, and contending with a budget deficit, is no longer able to pursue a policy of injecting hard currency into the exchange market to drive the exchange rate down as it had done in past years.

With the Iranian presidential "elections" approaching, the government is also preparing to spend money it doesn't have in the form of direct cash payments and/or subsidies to 70% of the wage earners, if we believe the latest reports (newspaper headlines below), thus decreasing the Iranian Government's "cash in hand", and its flexibility with regards to controlling the exchange rates in the future. If that holds true then a declining rial and increasing inflation is expected to continue in the upcoming Iranian new year.

Ettelaat: The lower 70% will qualify for government "help"

Kayhan: Cash payments or commodity "help", the government and Parliament deciding

One could argue that under the facade of "regime stability" there a simmering dissatisfaction among the public, and some say even the military, due to unpaid wages and rising prices (3). This year's "May Day" is likely to have a new meaning in Iran as a potential day of labor disconnect over unpaid wages and unemployment.

References:
(1) http://www.bbc.co.uk/persian/business/2013/01/130131_ka_exchange_iran_currency.shtml
(2) http://www.google.com/hostednews/afp/article/ALeqM5gqDTSzL79sbLoDT9nG7EwxgmjKBg?docId=CNG.3fa76d79026c3c8d8e16884eda5e8623.01

Title Photo source: PBS

Iran Currency Hits Historic Low

The Iranian currency hit a record low against the dollar on Thursday, trading at 40,000 rials to a dollar in Tehran’s open markets. The previous low record was hit in October 2012 when the exchange rate sank to 37,000 rials/dollar, causing currency crisis and protests in the bazaar.

On 31 January 2012, the rial was traded at 18,500:1. Today’s plummeting of the currency to 40,000:1 means that rial has lost two-thirds of its value in one year.

Photo: Iranian currency, the rial (ISNA)

Israel Will ‘Regret’ Attacking Syria – Iran Official

During a meeting today with Syrian Grand Mufti Sheikh Ahmad Badreddin Hassoun in Tehran, Secretary of Iran's Supreme National Security Council Saeed Jalili said the Israeli regime would “regret attacking Syria.”

“Military action against Syria would be a bitter disappointment for Israel,” said Jalili. (IRNA/Press TV, 31 January)

The Iranian official described Iran’s support for Syria as “unwavering.”

Photo credit: Secretary of Iran's Supreme National Security Council Saeed Jalili (R) meets Syrian Grand Mufti Sheikh Ahmad Badreddin Hassoun in Tehran. 31 January 2013. (IRNA/Press TV)

Agca, Gunman Who Shot Pope John Paul II, Claims Khomeini Ordered the Attack

Mehmet Ali Agca, the Turkish gunman who shot Pope John Paul II, now claims that Iran's late leader Ayatollah Ruhollah Khomeini personally told him to kill the pope. In his new autobiography, "They Promised Me Paradise" – which was released in Italy today, Agca claims that he was trained in Iran by Iranian intelligence after escaping from a Turkish prison, and that the Iranian leader himself told him to kill John Paul in the name of God. (AP, 31 January)

Agca shot and wounded John Paul on May 13, 1981, in St. Peter's Square. Minutes after being arrested, Agca claimed he had acted alone. Later he changed his story and suggested that the Soviet and Bulgarian intelligence were behind the attack, but later backed away from that assertion. The Pope pardoned Agca and he was released from prison in 2010.

File photo: Mehmet Ali Agca (The Telegraph)

Iran to Upgrade Centrifuges at Natanz

Iran has informed the IAEA that it planned to speed up its uranium enrichment program at Natanz by using faster and more advanced centrifuges, Reuters reported today.

According to the report, Iran informed the IAEA of its intentions last week. The IAEA document, quoting a communication the agency had received from Iran, lays out details of the upgrade program.

The Associated Press also reports that the old centrifuges will be replaced by IR2m machines, which would be able to enrich uranium as much as three times faster.

Iran Condemns Israeli Raid on Syria

Iran Foreign Minister Ali Akbar Salehi has condemned Israel’s strike on Syria.

“Undoubtedly, this blatant violation is in line with the policy of the West and the Zionists (Israel) to deflect [the world's] attention from the achievements of the Syrian nation and government in maintaining sovereignty and restoring stability and security to the country,” Salehi said on Thursday. (IRNA/Press TV, 31 January)

On Tuesday and Wednesday, Israel launched airstrike inside Syria, targeting a military research facility in Jamraya, a Damascus subur, and a truck convoy reportedly containing Russian-made SA-17 anti-aircraft missiles bound for Hezbollah in Lebanon.

Meanwhile, Iranian Deputy Foreign Minister Hossein Amir Abdollahian warned that Israel would face “serious consequences” for the attack. Abdollahian did not elaborate what consequences Israel might be facing. (Fars News Agency, 31 January)

File photo: Iran Foreign Minister Ali Akbar Salehi (IRNA)