Iranian officials,
lawmakers and media on Wednesday worriedly snapped their focus on their
country's sanctions-hit economy amid a sudden and accelerating plunge in
the
currency.
The currency, the rial, was trading at 15,800 to the dollar--its lowest
point
ever--an indication of the fragility of the economy as ramped-up Western
sanctions bit.
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 expected to be applied soon by Europe and
the United States.
A report by Mehr news agency on Tuesday--quickly denied by the foreign
ministry--that vital imports from one of Iran's
biggest partners, the United
Arab Emirates, had been cut off added to the
widespread jitters and seemed to fuel the rial's slide.
The stumble by the currency undercut avowed Iranian policy to keep the
rial
steady against the dollar. It suggested the central bank lacked the
financial
firepower to bring the rate under control.
But President Mahmoud Ahmadinejad put the currency slide down to
"rumors" started by profiteers and 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.
The United States and its
Western allies have in recent weeks stepped up economic sanctions on
Iran,
to pressure it over its nuclear program that they believe masks an drive
to
build an atomic bomb, despite Tehran's
denials.
Iran-U.S.
tensions have also worsened over U.S.
accusations of a thwarted Iranian plot to kill the Saudi ambassador to
Washington, Iran's
capture of a CIA drone, and Tehran's
arrest and detention of an American-Iranian it alleges is a CIA spy.
U.S. envoys have visited the
region to demand some of Iran's
neighbors also embrace the sanctions drive.
One of them, a U.S. Treasury under secretary for terrorism and financial
intelligence, David Cohen, visited the United Arab Emirates at the end
of
November to talk with officials on the issue.
Iranian officials are increasingly admitting that the Western sanctions
are
being felt, dropping previous assertions that they were having no
effect.
The measures were believed to be making it more difficult on Iran's
finances, notably its ability to come up with the monthly $2.5 billion
for cash
handouts to the population in compensation for domestic fuel and food
subsidies
that are being phased out.
Central bank figures quoted by Iranian media say the amount of rials in
circulation has jumped 20% 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%, but Iranians and anecdotal evidence suggest it is
much
higher.
The United States and Europe
are expected to soon announce additional sanctions on Iran,
targeting the country's vital oil sector and central bank.