Iran’s currency crisis pressures Tehran to resume talks with P5+1
On 21 October, Ali Akbar Salehi Iran’s Foreign Minister said on Iranian Students News Agency (ISNA), that P5+1 negotiations about the country’s uranium enrichment programme could resume in late November.
The new European sanctions on the country in combination with Iran’s rial devaluation against US dollar had a significant impact on Iran’s economy and government’s change of mind.
By the time international sanctions imposed in the middle of 2011, the rial had been slowly loosing value while inflation is keep rising, standing today at 25%. According to figures a year ago, 12,000 Rials equalled to 1 US dollar, but on 5 October the exchange rate between the two currencies was 37,000 Rial to 1 US dollar. On 6 October, Iranian government decided to impose a fixed price between 25,000 and 26,000 Rials per one US dollar.
The demonstrations against President Mahmoud Ahmadinejad monetary policy on 3 October, ended with the use of water cannons and batons by the Iranian police. In general social unrest about nation’s economy is escalating and according to Mahjoob Zweiri, professor of Politics in Qatar University, “there is a major problem with the Iranian economy for years now.”
According to Egypt independent sources, chicken and red meat prices are very high while weekly grocery costs for an ordinary family almost doubled. Furthermore, imported medicines have become a rarity.
Describing Rial’s fall as a mean of economic war, Ahmadinejad said “everyone is aware that foreign trade and commerce don’t have a very high share in the Iranian economy…the number of US dollars being exchanged in our country is not that big.”
In an effort to revive its national economy, Iran is seeking to strengthen ties with Egypt. On 21 October, head of the country’s Trade Promotion Organisation Hamid Safdel said on FNA, “Negotiations between Iranian and Egyptian private sectors in agricultural and industrial sectors have taken place, and the Egyptian delegation is interested in purchasing Iranian petrochemical products.”
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