Business, Economics and Jobs

Iran: Ahmadinejad blames 'enemies' for rial fall


Iranian President Mahmoud Ahmadinejad addresses parliament in Tehran, Feb. 1, 2012.



Iranian President Mahmoud Ahmadinejad on Tuesday blamed "enemies" of Iran for the sharp fall in its currency, the rial, the BBC reported.

The currency fell to record lows against the American dollar as the US claimed that economic sanctions aimed against the Islamic Republic were taking their toll.

Ahmadinejad said the sanctions amounted to an economic war, but declared that they would not stop the country's nuclear program.

"Enemies have managed to reduce our oil sales but hopefully we will compensate for this," he said, according to Reuters, as the rial lost a third of its value within a week.

"Are these (currency) fluctuations because of economic problems? The answer is no," he said, according to the Associated Press. "Is this because of government policies? Never ... It’s due to psychological pressures. It’s a psychological battle ... The enemy is making pressure by playing with (exchange rate) numbers in the street."

From trading at 24,600 rial to the US dollar on Monday last week, the rial fell to a record low of 37,500 to a US dollar.

The Wall Street Journal reported that compared to a year ago, the rial has lost more than 80 percent of its value.

More on GlobalPost: Israeli report: Sanctions taking toll on Iran

Iranian Industry Minister Mehdi Ghazanfari blamed speculators for the fall, according to the BBC.

Criticism has been leveled at Ahmadinejad by his political rivals, who say his policies are also responsible for the fall of the rial, according to the AP. An Iranian member of parliament was quoted by an official Iranian website saying that the chamber has collected enough signatures to make Ahmadinejad face questioning over the rial.

The AP said price hikes have added to the economic burden in Iran, as it struggles under the sanctions placed on its oil exports and international banking.

Israeli Finance Minister Yuval Steinitz said on Sunday that Iran's economy is "on the verge of collapse," according to Reuters.

However, Ahmadinejad insisted on Tuesday that the impact of the sanctions was manageable, with imports only down to $26 billion for the first half of this year, compared to $29 billion for the same period last year.

More on GlobalPost: In UN speech, Ahmadinejad calls for new world order (VIDEO)