`Psychological` blows hit currency: Ahmadinejad

Last Updated: Wednesday, October 3, 2012 - 12:02

Tehran: President Mahmoud Ahmadinejad on Tuesday blamed the steep drop in Iran`s currency to "psychological pressures" linked to Western sanctions over Tehran`s nuclear programme.

The remarks were part of his attempt to deflect criticism from political rivals that his government`s policies also have contributed to the nosedive of the Iranian rial, which has lost more than half its value against the US dollar this year and has sharply pushed up costs for many imported goods.

The price hikes have added to the burdens on Iran`s economy as it struggles with tougher sanctions targeting its crucial oil exports and measures blocking it from key international banking networks.

The US and its allies have imposed the punishing measures to try to persuade Iran to negotiate over its nuclear programme, which the West says is aimed at developing atomic weapons. Tehran insists the programme is for peaceful purposes.

An Iranian parliament member, Mohammad Bayatian, was quoted on the chamber`s website, icana.Ir, as saying that enough signatures have been collected to force Ahmadinejad to face questioning before lawmakers over the currency`s tumble.

Iran`s currency fell again today, hitting a record low of 34,500 rials against the US dollar on the unofficial street trading rate, which is widely followed in Iran. It was 29,500 rials to the dollar Sunday. Two years ago, it was close to 10,000 rials for USD 1.

"Are these (currency) fluctuations because of economic problems? The answer is no," Ahmadinejad told reporters in his first public comments in Iran since returning from the UN General Assembly.

"Is this because of government policies? Never ... It`s due to psychological pressures. It`s a psychological battle."

Ahmadinejad described the sanctions as part of a "heavy battle" that has succeeded in driving down oil exports "a bit," but he gave no precise figures.

PTI



First Published: Tuesday, October 2, 2012 - 22:27

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