Ahmadinejad is called to account after rial falls to record low

Kim Sengupta
Tuesday 02 October 2012 21:46

Iran's parliament has summoned President Mahmoud Ahmadinejad to answer questions about the national currency going into free-fall after Western sanctions over the country's nuclear programme.

The rial hit a record low of 34,500 against the US dollar yesterday, a slide from 29,400 on Sunday, with the trend likely to continue.

One MP, Mohammad Bayatian, said yesterday that enough signatures had been collected to call the President before the 290-member Majlis to demand an explanation for the crisis.

It is the second time the Majlis has called Mr Ahmadinejad to account this year. He had made a previous appearance to explain his public feud with the Supreme Leader, Ayatollah Ali Khamenei.

The parliamentary Speaker, Ali Larijani, has become increasingly critical of Mr Ahmadinejad, saying that 80 per cent of the rial's problems were due to government mismanagement.

Growing alarm at the fall of the rial had led to a sharp rise in the numbers of Iranians buying foreign currency. Some in the business sector have blamed government policies, as well as sanctions, for the currency collapse.

However, Mr Ahmadinejad claimed Iran's economy was holding up despite sanctions, which have slashed earnings from oil exports. There were enough foreign reserves, he insisted, to finance imports. The President publicly criticised Mr Larijani for the first time saying: "The Speaker should help the government overcome the problem instead of accusing the administration."

He accused Iran's enemies of waging a psychological war, but stressed that imports totalled $26bn in the first half of this year, down only moderately from $29bn in the same period last year.

The fall of the rial had accelerated in the past week after the government launched an "exchange centre" to supply dollars to importers of basic goods. But businessmen have complained that the centre has failed to meet the demand for dollars.

Defending his domestic policies, Mr Ahmadinejad said a phasing-out of the food and fuel subsidies he launched in 2010, which has boosted the official inflation rate to around 25 per cent, had been successful.

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