Monday, 25 June 2012

The Latest from Iran (25 June): Doing the Currency Slide

0645 GMT: This morning's Iranian State media has the familiar assertions of strength --- "The country’s Army and the Islamic Revolution Guards Corps (IRGC) plan to stage a number of joint military drills in the current Iranian calendar year"; " Iranian warships will soon expand their presence in international waters" --- and assurances that all is well despite sanctions, "Oil production to grow fourfold".

What is not mentioned is the state of the Iranian currency, a marker of the country's economic situation. There are signs that the collapse of late 2011, in which the Rial lost 80% of its value against the US dollar, could be replicated. Having been bolstered by Government and Central Bank intervention to recover to 15600:1, a slide of more than 5% last week has brought it down to 19130:1 this morning.

That is still a better position than the low point of more than 21000:1 in early 2012, but more trouble could be on the way. With the stalemate in last week's nuclear talks, Tehran has failed to stave off the European Union's cut-off of imports of Iranian oil, and tighter US restrictions on Iran's Central Bank and financial transactions.

from EA WorldView: EA Iran

Posted via email from lissping