WarSclerotic

IMRA – Monday, January 2, 2012 Iran currency slips to record low (30% below official rate) after new US sanctions.

Iran’s currency, the rial, slipped to a record low on Sunday, the day after the United States imposed extra sanctions targeting the Islamic republic’s central bank and financial sector.

The state news agency IRNA and an Iranian website tracking the currency said the rial’s street value at money changers’ slid to around 16,000 to the
dollar.

That represented a huge difference with the official central bank rate of
11,179 rials to the dollar.

On Saturday, US President Barack Obama signed the new sanctions into law.

The measures aim to further squeeze Iran’s crucial oil revenues, most of
which are processed by the central bank, by making foreign firms choose
between doing business with the Islamic republic or the United States.

They were being imposed as part of a Western push to force Iran to halt its
nuclear programme, which the United States and its allies believe is being
used to develop atomic weapons despite Tehran’s denials.

Iran, the second-biggest producer in OPEC after Saudi Arabia, depends on oil sales for 80 percent of its foreign revenues.

The European Union is mulling an embargo on buying Iranian oil, on which a decision could be announced at an EU foreign ministers’ meeting at the end of the month.

Iranian leaders and military officials have warned that extra Western
sanctions could push them to close the strategic Strait of Hormuz at the
entrance to the Gulf.

Twenty percent of the world’s oil passes through the strait, making it the
“most important choke point” globally, according to the US Energy
Information Administration.

Iranian naval forces are to complete 10 days of war games near the strait on Monday with an exercise practising tactics to close the channel if they are so ordered, the ISNA news agency quoted spokesman Commodore Mahmoud Mousavi as saying.

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