Rial-ity check
The Iranian currency was in free fall last week, a clear sign that US and EU sanctions on the country is hurting. While the rial has been a declining currency for some time, the Ahmedinejad government unwisely set up an “exchange center” for a fixed dollar-rial exchange rate for basic commodities. But the sentiment on the Iranian street was entirely different. The rial dropped like a stone, by over 40 per cent to about 37,000 to the dollar.Across the border in Afghanistan, the government, alarmed by the rial’s slide and fearing massive losses to Afghan traders, put a cap of $1000 that could be taken out of the country. Whatever the immediate causes of the rial’s fall, Iran’s economic woes are unlikely to end anytime soon. During a recent visit to the country we were told prices of consumer goods have been rising steadily. In August, the prices of chickens created a minor stir. This week, Iran’s politically sensitive bazaar stayed closed while security forces crack...