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Rush to Buy 2000-Toman Dollars Hours before New Iran Sanctions Take Effect

By Nazanin Kamdar, Rooz Online

As the oil embargo on Iranian oil by the European Union is about to take effect and with the remarks by EU's foreign policy chief Catherine Ashton, foreign currencies in Tehran reached their highest exchange rates during the last three months. The US Dollar was being exchanged at about 2,000 Toman and the official 16,000 Toman Azadi coin was in demand for 714,000 per piece, figures that looked unrecognizable even by Iranian standards.


Rooz reporters in Tehran have described the scene on Ferdowsi Avenue and Istanbol Crossing - the bustling unofficial foreign exchange nerve centers of the country - to be that of a rush zone to buy foreign exchange and valuable coins, all related to the imminent embargo on the country's oil in the international market launched by Europe. But despite the havoc in that market, Revolutionary Guard oil minister Rostam Ghasemi said during a cabinet meeting, "We hope that Europeans act rationally and this event (the oil embargo) does not take place. But if we take advantage of the embargo, most certainly the interests of the Islamic will be fulfilled. Sanctions are both an opportunity and a threat. We shall utilize this opportunity."

As reported by Iran's ISNA student news agency, Ghasemi denied international market reports that Iran was trading oil for good with India and receiving the Yuans instead of US Dollars in its trade with China. "Nothing money is paid in Yuan (the Chinese currency). We are certainly interested in receiving some of our oil sales in Yuan but for now they are paid in Dollars. It is in our interest if the payments are in Yuan. We support barters, but this has not happened with India yet. The reason is the tax that was imposed on Iranian Rupee trade, with which we disagreed. The Indians recently passed legislation to bypass the tax on Rupee transactions with Iran. We are now negotiating with Indians so that if our product needs are available in India, they will be traded through barter arrangements because India may not have the products that we need."

Ghasemi repeated these remarks to Shargh newspaper and said, "European economy is not in good shape. The Euro is suffering and the Europeans are scheduled to discuss and decide on their oil purchases from Iran and the insurance issue related to tankers at their headquarters."

According to ISNA, President Ahmadinejad's first deputy Mohammad-Reza Rahimi also told reporters on behalf of the Iranian people, "We shall cut down."

Ahmad Janati, the secretary of the powerful Guardians Council also commented on the issue and predicted that the oil embargo would not affect the authority of the regime. Fars news agency reported that Janati was speaking at a government ceremony to commemorate the death of ayatollah Beheshti in the early days of the 1979 revolution, the place where plain-clothes forces are mobilized where he also said, "War and sanctions have not succeeded in breaking our resolve and authority and the Islamic republic is growing stronger by the day." He continued, "The enemy fears velayate faghih (rule of clerics) and we must stand behind velayate faghih to protect the regime."

In related news, hardline and state-run Kayhan newspaper once again wrote on closing the Straits of Hormuz to tanker traffic and quoted a naval commander, "Should the sanctions intensify, particularly the oil embargo by the West, it is possible that Iran may utilize its position in the Straits of Hormuz. Of course the new sanctions by imperialist countries will not have an impact on our actions but if conditions come about where the Iranian nation is endangered, we shall use all our tools, of which the Straits of Hormuz are one to defend ourselves. We have good memories from sanctions. Rather than creating restrictions, sanctions pave the wave for progress and lay the foundation for domestic initiative."

... Payvand News - 07/01/12 ... --

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