Tuesday, 22 January 2013

Iran Live Coverage: Crisis at the Central Bank?

Central Bank head Bahmani & President Ahmadinejad0625 GMT: Political Prisoner Watch. Attorney Nasrin Sotoudeh, serving a six-year sentence, returned to Evin Prison on Monday after a four-day furlough.

0605 GMT: Bank Watch. Monday's news was taken over by the confusion and apparent crisis at the Central Bank, blamed by many politicians for the Islamic Republic's economic and currency problems.

The conflict escalated on Sunday when Parliament demanded an enquiry into the Bank's operations. Reports circulated that Bank head Mahmoud Bahmani had resigned.

President Ahmadinejad appeared to stem the immediate problem by rejecting Bahmani's resignation, but the Supreme Audit Court then ratcheted up the pressure. The court ruled that the Bank head must be dismissed, as he had violated financial regulations with unauthorised withdrawals from other banks.

The legal finding intersects with the charge of MPs that Bahmani had been acting on orders from Ahmadinejad, taking the money to help fund the President's controversial subsidy cuts programme.

The latest tension adds to the prospected of renewed currency difficulties. The Rial fell between 4 to 8% --- it is hard to be precise, given the regime's clamp-down on the open market from October --- to about 35300:1. That is not quite as weak as the level that forced the Bank and Government to intervene in the autumn, but it is about a 30% fall in seven weeks.

from EA WorldView: EA Iran

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