BICOM

The Iranian currency dropped to a record low yesterday against the US dollar, seemingly as a result of international sanctions against Tehran.

In a single day, the Iranian rial fell 15 per cent against the US dollar, its value dipping from 24,000 to the dollar last week to 34,500 rial to the dollar yesterday. The Times reports that the Iranian currency crisis is due in part to economic mismanagement but is largely down to sanctions imposed by the United States and European Union following Iran’s failure to quell international fears over its nuclear programme. The sanctions have reportedly seen Iran’s oil exports roughly halve in the last year, costing Iran an estimated $8 billion each quarter. Inflation in Iran officially stands at 25 per cent, with some economist estimating an even higher rate.

Iranian Foreign Ministry spokesman Ramin Mehmanparasat accused foreign countries of trying to ‘create discontent amongst the people before next year’s presidential elections in Tehran.’ The Times reports that state media outlets have been told to downplay the crisis, although the Guardian comments that domestic criticism of Iranian President Ahmadinejad is mounting.

Meanwhile, the Financial Times reports that the UK government is leading efforts to impose new European Union sanctions on Iran. Apparently, the UK –along with France and Germany – will bring a plan for new restrictions at a meeting of EU foreign ministers on 15 October. This will include further steps to prohibit financial transactions between Europe and Iranian banks, a more stringent ban on Iranian imports and a crackdown on Iranian shipping operations.