16 Apr 2024
Wednesday 3 October 2012 - 11:13
Story Code : 6637

Mahmoud Ahmadinejad: Iran's currency crisis due to psychological war

Mahmoud Ahmadinejad: Iran
By The Guardian

President says plummeting value of rial is fault of enemies abroad and at home, not his government's economic policies

Iran's beleaguered president,Mahmoud Ahmadinejad, has blamed the plummeting value of the national currency on a "psychological war" perpetrated by enemies abroad and opponents at home.

Speaking as the rial hit an all-time low against the dollar, Ahmadinejad told reporters that the slump was the result of the "temporary problem" of the international embargo on importing Iranian oil. He said sanctions would only pressure the "people of Iran and not its government" and would not force Tehran to change its nuclear policy.

"It's a battle," he told reporters in Tehran. "Enemies have managed to reduce our oil sales but hopefully we will compensate for this." He rejected suggestions that the crisis was the result of his government's economic incompetence.

"Are these currency fluctuations because of economic problems? The answer is no," Ahmadinejad said. "Is this because of government policies? Never It's due to psychological pressure. It's a psychological battle." While he was speaking, the rial fell to a new record low.

Ahmadinejad said Iranians would not retreat from the nuclear issue. "If anyone thinks that they can put pressure on Iran [to force us to change our policy], they are certainly wrong and they must correct their behaviour," he said.

The Iranian president accused his conservative rivals of complicity in exacerbating the crisis over the rial, saying they had contributed to the situation by launching a propaganda campaign against him. The president pointed the finger at Ali Larijani, the parliament speaker, and criticised him for giving an interview in which Larijani said mismanagement accounted for 80% of the problems and the sanctions 20%, comparing government policy to "Robin Hoodian economics".

"The respected head of parliament should come forward and help instead of giving interviews," Ahmedinejad said.

The deputy speaker, Mohammad Reza Bahonar, echoed Larijani, saying on Tuesday that the government's only enemy was "illusion". At least one Iranian MP accused the government of manipulating the country's foreign currency reserves amid speculation that Ahmadinejad might be summoned for questioning.

"The president has deliberately kept the market agitated," said Elias Naderan, of the parliamentary economics committee, according to the semi-official Mehr news agency. "I really don't know what Mr Ahmadinejad is thinking. What plan does he have, what is his expectation of the system, and how does he plan to manage this disorder?" Despite several attempts to calm the markets, the government has failed to bring the rial under control. It has lost at least 57% of its value in the past three months after US and EU sanctions targeting the regime's nuclear programme came into effect in July.

On Monday the rial experienced its biggest devaluation in a single day, dropping more than 15%.

On Tuesday, a senior official indicated that the government was relying on its security services to curb speculators, who are blamed for the rial's drop. It was not clear how the move could be implemented as previous attempts to get the police to enforce the official exchange rate have failed.

"We have greater expectations that the security services will control the branches and sources of disruption in the exchange market," he said, according to the Fars news agency. "Brokers in the market are also pursuing the increase in price because for them it will be profitable, and there is nobody to control them."

Many Iranians have lost faith in the rial and are now rushing to convert their assets and properties to foreign currency and gold.

Meanwhile, an opposition website,kaleme.com, reported that Tehran's bazaar was planning to go on strike on Wednesday in reaction to the currency crisis and government plans to send security services to restore calm in the market.

In his first domestic press conference since his visit to New York last week, the president also reacted to the speech made by Israel's prime minister, Binyamin Netanyahu, at the UN general assembly, in which he used a bomb illustration to draw red lines for Tehran's nuclear programme. Ahmadinejad said the diagram was "childish and primitive" and insulted the audience.

"That drawing was only good for children, he should learn to draw better," he joked.

Despite questions on his UN speech, Israel and Syria, the press conference was mostly dominated by the currency crisis and the internal power struggle between Ahmadinejad and his opponents in parliament and the judiciary.

Ahmadinejad expressed regret over the arrest last week of his media adviser, Ali Akbar Javanfekr, and criticised his culture minister for speaking against a reformist newspaper, Shargh, which was closed down at the same time over a cartoon deemed insulting.

Meanwhile, the French embassy in Tehran was attacked by a small group of people protesting against an anti-Islam film that infuriated the Muslim world for mocking the prophet Muhammad. About 30 protesters were said to have smashed a police guard post and thrown stones, though no casualties were reported.


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