Iran’s president: ‘Psychological pressure’ over nuclear program to blame for currency dive

TEHRAN, Iran (AP) — President Mahmoud Ahmadinejad blamed the steep drop in Iran’s currency Tuesday to “psychological pressures” linked to Western sanctions over Tehran’s nuclear program.

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 program, which the West says is aimed at developing atomic weapons. Tehran insists the program 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 Tuesday, 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 $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 U.N. 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. Some oil analysts estimate exports have fallen by more than 30 percent since July, when the 27-nation European Union halted purchases of Iranian crude.

Iranian officials have insisted that Iran can ride out sanctions by expanding oil contracts with Asian markets such as China and India.

But the currency nosedive could bring even more political heat on Ahmadinejad, who has been left severely weakened after challenging Supreme Leader Ayatollah Ali Khamenei over the powers of the presidency. Ahmadinejad now could come under increasing domestic attacks before elections in June to pick his success.

Earlier this year, Ahmadinejad became the first president hauled before the 290-seat parliament for questions over his public feud with Khamenei.

The rial’s sharp decline is blamed on a combination of Western sanctions and government policies, such as holding down bank interest, which prompted many people to withdraw their rials to exchange for foreign currency.

Also on Tuesday, Ahmadinejad criticized Prime Minister Benjamin Netanyahu’s cartoon-style visual aid at the United Nations, calling the bomb drawing “childish and primitive.”

Ahmadinejad said the Israeli’s drawing of a red line to urge swifter international action against Iran’s nuclear program was an intellectual insult to U.N. dignitaries.

“Red line, white line, black line and the like is for children. This is the level of this guy’s character,” Ahmadinejad said at a news conference in Tehran. “It was a primitive drawing, an insult to the audience … it was a very ugly behavior.”

The Iranian president used the packed press conference to accuse Netanyahu of being a war-monger, saying of him: “Whoever talks of war is retarded.”

At his speech last week before the U.N. General Assembly, Netanyahu flashed the diagram of a bomb with a lighted fuse to illustrate progress Iran has made in its nuclear program, saying the country was approaching a threshold Israel could not tolerate.

Netanyahu’s prop was quickly dubbed “Bibi’s bomb” after his nickname.

Israel considers a nuclear-armed Iran to be an existential threat, citing Iranian denials of the Holocaust, its calls for Israel’s destruction, its development of missiles capable of striking the Jewish state and its support for hostile Arab militant groups.

Netanyahu has repeatedly argued that time is running out to stop Iran from becoming a nuclear power and that the threat of force must be seriously considered. Israeli leaders have issued a series of warnings in recent weeks suggesting that if Iran’s uranium enrichment program continues it may soon stage a unilateral military strike.

Israel and the U.S. have accused Iran of using its civilian nuclear program as a cover to develop nuclear weapons. Iran has denied the charges, saying its program is peaceful and geared toward generating electricity and medical radioisotopes to treat cancer patients.

President Barack Obama has vowed to prevent Iran from becoming a nuclear power but has rejected Netanyahu’s demands for setting an ultimatum — or red line — past which the U.S. would attack. His administration has urgently sought to hold off Israeli military action, which would likely result in the U.S. being pulled into a conflict and cause region-wide mayhem on the eve of American elections.

At the Tuesday news conference in Tehran, Ahmadinejad joked that Netanyahu’s artwork would improve with practice.

“It appeared that his drawing was not good. He got it drawn by a machine. His drawing will get better if he makes more practice.”

Copyright 2012 The Associated Press.