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Raheb Homavandi / Reuters file
A money changer holds Iranian rial banknotes as he waits for customers in Tehran's business district in this January 7, 2012 file photo.
The United States, the European Union and the U.N. have imposed tough economic sanctions against Iran, blocking access to the international banking system and curbing sales of Iranian crude oil as a way to persuade Tehran to abandon its nuclear program.
As a result, Iran’s currency, the rial, is in a constant state of flux, but mostly on a downward trajectory. These days, it seems to fall in value against the dollar on an hourly basis. On Tuesday the currency hit an all-time low against the U.S. dollar, trading at 26,500 to the U.S. dollar on the open market, according to Persian-language currency tracking website Mazanex.
“Our money is becoming more and more worthless every day,” said Sarvenas Sadi, an elderly woman doing her daily shopping in Tehran earlier this week.
She picked up a handful of limes and exclaimed, “These were 100 percent cheaper last year!”
Asked whether she ever thought she would see the currency devalue so much, she replied, “Never! I remember before the [1979] revolution $1 was worth 70 rial, now it’s worth 26,000! Who would have ever have thought!”
Iranians feel the pain of sanctions: 'Everything has doubled in price'
Did she think things would ever balance out and the price of goods would come down to what they were before. “Unfortunately I don’t think so. The thing with Iran is that once the price of something goes up, it never comes down again.”
So what’s the solution? “Eat less limes,” she jokingly replied.
AP
Two potential Iranian customers look at fabric bolts in Tehran's old main bazaar in this picture taken July 14, 2012.
Manufacturing hit hard
The financial situation is affecting people from all classes. Thousands of workers have been laid off and have not been paid back wages because companies have simply run out of money. Majid, a 32-year-old mechanic who used to work for a large car company was recently laid off and is owed six months’ salary.
“They are laying off people left, right and center. I doubt there will be a company left by the New Year,” he said, giving just his first name because of the sensitivity of the issue in Iran. Persian New Year will be on March 21, 2013.
The car industry, one of the biggest manufacturing sectors in Iran and a massive employer, has been affected dramatically; Iranian media have reported a 30 to 50 percent drop in car and component production in the past six months. Iran was the 13th-largest auto maker in the world in 2011, producing 1.6 million vehicles.
The Iran Khodro Company, the country’s leading vehicle manufacturer, had become the largest vehicle manufacturer in the Middle East, Central Asia and North Africa. The company won the annual national prize for export activities in 2006 and 2007 with Russia, Syria, Turkey, Iraq, Azerbaijan, Ukraine, Egypt, Algeria and Bulgaria among their key consumers.
But higher prices, due to the soaring costs of components as a result of the sanctions, have caused a drop in demand.
Israel's Netanyahu: Draw 'clear red line' to stop Iran from getting nuclear weapons
For instance, France's Peugeot Citroen halted shipments of vehicle kits for assembly in Iran earlier this year, saying international sanctions barring transactions with the country's banking system made it difficult to obtain sales financing.
Sanctions have taken a toll on the Iranian economy. The government is reluctant to admit it. Inflation is high. The number of young unemployed is a growing concern. NBC's Ali Arouzi reports.
Majid, the mechanic, said he is looking for work elsewhere but it is proving very difficult. “There are not many jobs going and it is getting me more and more depressed.”
Oil sales to travel - down
The oil sector has been hit hard too. The Iranian Labor News Agency reported that a letter on behalf of 20,000 oil workers from across the country was sent to Labor Minister Abdolreza Sheikholeslami complaining that they had not been paid in months. The letter demanded an increase to the worker’s salaries of $120 to $285 a month, adding that at the current rate they were "way below the poverty line.”
Mohammad Reza Bahonar, a prominent Iranian member of parliament, said oil exports in June-July had dropped to "around 800,000 barrels per day," according to a report by ISNA news agency. That’s a low not seen in more than two decades, and less than half the 2.3 million barrels per day exported just a year ago.
But Minister of Petroleum Rostam Qasemi was quoted by ISNA saying that overall oil production this year "will be the same as last year."
Israel's Prime Minister Benjamin Netanyahu called for a firm deadline for Iran to halt its nuclear program, using a simple drawing to warn the UN that Iran will soon reach the point of no return in its development of nuclear weapons. NBC's Andrea Mitchell reports.
The strangling of the economy isn’t just affecting blue-collar workers.
Middle-class Iranians had become accustomed to foreign travel – to Dubai, a playground for Iranians only an hour and half away, Turkey, one of only a few countries that does not require visa’s for Iranians, and Thailand. But the cost of travel to any of these destinations is prohibitive to many.
More Iran coverage from NBC News
Maryam, a travel agent in Tehran who also only gave her first name, estimated that the number of travelers has been halved in a year. “The price of tickets and organized tours increased almost a hundred fold. They say that this will boost domestic holidays, but I think that is even too expensive for most people.”
This was evident to me last month flying back to Tehran from London via Dubai. Usually the flight from Dubai to Tehran is jammed, but not this time. Business and first class were full with the super-rich of Iran, but 70 percent of the plane which makes up the economy class was almost empty.
As the American mission in Afghanistan winds down, dangers still abound for U.S. troops – the most recent incident involved a Taliban gunman who fired on a U.S. Marine outpost in Afghanistan's Helmand Province. NBC's Richard Engel reports.
Expected to get worse
Mehdi is a young entrepreneur who imports computers and accessories who also spoke on the condition of anonymity. He said people are just not buying in Iran right now. His biggest wish was that the value of the rial would just stay fixed against dollar – even if it was at an unfavorable rate – just so consumers would know how much things would cost in a weeks’ time, a day or even in the next few hours.
While the sanctions have certainly taken a major bite out of the economy and are hurting people from all walks of life – it does not seem to be making the government authorities buckle. If anything it seems to have stiffened the government’s resolve and things are set to become even more difficult in the not too distant future.
Britain, France and Germany are urging their European Union partners "to further step up the pressure" on Iran. Further sanctions targeting the Islamic Republic's energy, finance, trade and transportation sectors are expected to be formally adopted on Oct. 15.
At schools, in shops, and on the streets of big cities and small towns, daily life plays out in Iran.
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Leave a Comment:
Iran would not be as easy as Iraq. at least the people had a common enemy tha the US could sort of depend on in the fighting. What would have happened if the "peanut farmer" had reacted to the seizure of the embassy like Ron might have? Diplomacy has its uses but only when the other guy doesn't want to go toe to toe with you because he knows you can kick his buttox. Now typical Dem. mentality. Cut military spending and reallocate resources to the far east. So when Iran acts up, it will take weeks to get the navy into the act because they will be based in Japan< Okinawa or Pearl Harbor. Way to go Barry. Increase snctions to upset them more and move your navy carriers to far away to be of immediate help. How stupid can you get?
gary,,,he can get pretty fricking stupid!!!
In order for there to be peace with them, the Iranians must be forced out of their Dark Age. I don't mean by military force, I mean by depriving them of at least one of the two enabling factors of a Dark Age: 1) Cultural isolation and, 2) Control of both secular and spiritual power in the same hands.
Their cultural isolation is made possible by oil revenue. It these sanctions remain effective, they could be the best thing to ever happen to the country. It might force them to abandon their centuries-long cultural stagnation, state-sponsored xenophobia, and obsessive desire to enforce their religious beliefs on the entire world. They could lead a true Islamic renaissance in the Middle East simply by joining the modern world!
Or they could just sink deeper into their swamp of delusional, hate-filled fanaticism.
Regretfully, I think we both know which way this is going to go.
The theocracy is well-established and powerful in Persia.
I suspect the leadership is well on their way to stirring up hatred in the Iranian Street for the 'evil West' and their sanctions, which hurt the average person in Iran, not the Achmadinejads or the Mullahs.
The sanctions are working? Really? Is this report politically motivated or is it for real. It's sad when you can no longer trust the news media on anything reported.
To make such a bold statement that "The Sanctions are working" is disingenuous on it's face! If they were "working" Iran would be discussing options with the World Community, not threatening it! Of course it's politically motivated and it's equally ridiculous !
search "we think the price is worth it" + Madeleine Albright to read about what sanctions like this will do to the poor people of Iran, they, or many of them anyhow, tried to protest against their government a couple years ago, and remember what happened? the use of sanctions like this against a government are a fricking joke and the western governments know it, I'm no supporte of Iran by any means, but in a repressive theocracy like that its shameful to punish the regular citizens like this and pretend its going to harm the leaders of the country, the ones who are truly responsible for their governments actions, I'm disgusted to be associated by nationality with Albright and those that are doing the same thing to the populace of Iran!
If you have a better solution , the entire World, eagerly awaits your explanation ! Please clue us all in !
The tree of liberty must be refreshed from time to time with the blood of patriots & tyrants. It is it's natural manure.
-Thomas Jefferson
When have sanctions EVER worked??? By worked I mean got the offending country to do what we wanted them to do??? Yes they work putting the commoners in misery while the govt. is living the good life.... As to the question of believing govt. lies??? We have half of the U.S. doing that as we speak with Pres. Obama.... while paying no attention to 16,000 Americans going on food stamps EVERY DAY of Pres. Obama's term to date,,,, and while we spend 3 million A MINUTE that we don't have,,, we just print or borrow it.... At at the same time,, the U.N. just proposed a worldwide tax and our Pres. has said nothing about it.... (Like,, No Way) I suppose the very same supporters of these policies will be the ones screaming the loudest when in 2 to 3 years their dollar buys 50 to 65 cents of the goods it buys today.....
None of you understand sanctions. It is not to eliminate the government in power but an attempt to bring them to make the realize that they are making some dangerous mistakes. If you simply do nothing with Iran, it will develop nuclear weapons and threaten the world with them. They do not have a democracy and anyone who says they do is an idiot. N. Korea is slowly coming around but it will take some years for them to change. Let's see what junior does. As for Cuba, its situation is entirely different. It is not a threat to anyone. The only reason the U.S. maintains a trade embargo is because of the Cubans in Miami. Romney and Ryan were feeding them a bunch of silly nonsense which the nitwits believe.
How ludicrous can you be! Assigning responsibility for Cuban Sanctions to Romney and Ryan, neither of which posses any executive powers, when they were put in place over 4 decades ago by John Kennedy! WOW !
Proof positive that the term 'Progressive Logic' is one of the worlds ultimate Oxymorons!
The comment to which you refer is in no way "progressive". It is just low-info-voter Fox News rubbish, a loosely-connected string of talking points.
They just love their ayatollah
Don't care about their moolah
Don't care about a strike
It's old man Khamenei they like
Palestinians will get statehood in the UN and Obama will be re-elected, eat your heart out zionist. Your history.
They might get Statehood but what do they have to sell or trade? Without serious support from another country they'll starve to death in their State. Egypt wants nothing to do with them. No other Nation but Israel is feeding them. Be careful what you wish for.
The PA is only seeking 'non-member status' and wants to observe. So, you're wrong.
Obama may be re-elected, but even he knows that he cannot abandon Israel entirely, nor can he accept a nuclear Iran.
Your fantasy of millions of Jews dying will have to wait.
Iranians are going to have a lot more to worry about than their money if they don't get rid of their NUT JOB president and give up the pursuit of nuclear weapons.
While sanctions can often be effective. That is only true if the Nations leadership is really concerned for their countryman, usually those who's political future is directly in the hands of these countryman. That's not the case in Iran!
It will be a race to see the Iranian currency keep up with the falling value of the dollar. Prices change everyday in the US thanks to obama spending.
Iran's currency is not the only currency that is becoming worthless. The U.S. dollar is being devaluaed. The main stream media is not reporting on that fact because it is controlled by the elite politicians, bankers and industrialist. If they reported the truth it would cause a panic, a run on the banks and people would be decreasing their spending. Just in the last 2 years the price of energy and groceries in the U.S. have doubled. The U.S. economy is currently in a double dip, double digit inflationary recession that is progressing into a full blown depression. The elite banking CABAL of the NWO that are members of the Illuminati main agenda is to break the labor unions and the middle class with a series of economic shocks: 1-Price inflation 2-Wage deflation 3-Part time workers 4-Unemployed workers 4-Out sourcing jobs and manufacturing off shore.
All of the above adds up to destruction of the middle class and reducing the U.S. to a 3rd world country.
The International Bankers which are comprised of 1/10th of 1% have abscounded with the National Treasury and usurped the peoples wealth in the form of hard currency which is gold and silver while the 99 & 9/10ths are holding worthless non redeemable paper notes. The sheep have been sheared. It's called intrinsic and constructive fraud, conspiracy to commit fraud, check kiting and counterfeigtinig.
Wake-up America before it is too late. You have been lied too in the public schools and in the higher institutions of learning which are controlled by the elite. They told you that you were living under a democracy but the fact is that they didn't tell you were living under an indirect democracy or represenative form of government and where the president is appointed by an electorial college and not by the vote of the people. There are 435 members of congress that are determining your fate. That is less than 1/10th of 1% of the total population of the U.S. A true democracy is where the majority rules.
The U.S Government is an oligarchy ruled by plutocrats. An oligarchy is government by a select few. A plutocrat is goverment by the wealthy. Most of the political hacks in Washington are lawyers and millionaires.
Right on. No one in the press seems to have a clue how much prices have increased here in the states and Canada. No wonder the farm bill is so important. It is laden with more $$$ to feed the so-called poor. Obama's inflationary minded foodstamp crew are filling their own pockets too.
The sanctions against Iran, which are hurting only ordinary people, are disgraceful. Nobody to date has offered a shred of proof that Iran is building nuclear weapons, and repeated inspections have failed to find any uranium enriched to a higher degree than that used for reactor fuel. It's not just plug-and-play, and weaponized uranium is enriched to a much higher degree than reactor fuel. As a signatory to the non-proliferation treaty, Iran is permitted by law to enrich uranium for peaceful purposes such as research and power generation. They are not breaking any laws. But Bibi doesn't like it, and the U.S. government is eager to do what Bibi wants; things have reached a stage in American politics where the candidates' position on support for Israel - the more the better - is as critical to his or her chances of being elected as his or her plan for the domestic economy.
If Iran caves in to sanctions and the absolutely criminal action of unplugging the country from the international banking sector, the same method will be used again to bring any country to heel that Israel regards as a threat, or any country that Israel would like to colonize. There is currently no entity on the planet so eager for war and the threat of military force to achieve its own selfish objectives as Israel, and it need not even risk its own military forces to achieve its goals as long as the World's Most Powerful Military is willing to be led around on Bibi's leash.
I think most of us are past this discussion, since the current Iranian leadership is clearly dedicated to the destruction of Israel. The Iranians have made their intentions known. They are developing nukes, and the missiles to carry them. They also have the splendid option of simply giving a device or just radioactive material to terrorist groups.
Just saw the movie"The Possession" great movie. Lets send Iran a "Dybbuk" box.
The spirits would have a blast. They would need a Hasidic rabbi to get rid of it.
Don't see that happening!
"Odds or evens"? Can hear the sabres here in Washington State. The other Washington is devoid of its moronic inhabitants as they have flown home, earliest in 50 years, to literally cash in on the sale to the higest bidder of the U.S. presidency. So are we on the brink or not? Its quite simple, but our very simple and greedy congressional reps are clueless as they collect their treasures and our kids come home in boxes. Pre:empt? Whoever strikes first wins. It will be weaponry sophistication vs numbers. WW3 some say? You mean including the Galapagos? Russia too? Are you kidding? Russia is buddies with Syria and Iran. S P E C U L A T I O N ???
Sanctions aren't going to work. Anyone who thinks about it will see the truth in this.
But, better to be able to say "we gave you every chance" before activating any kind of process to disable Iran's nuclear program.
When the time comes, the ability of Iran to develop nukes will be swiftly disabled, and it will come in a way that practically no one will expect.
I'm just waiting for the "fallout" literally. Death to the Muslim Infidels! It's almost time to watch the carnage that Muslims have sown on the world! The sooner they all get their 72 sex slave in Heaven, the better the World will be! Nukes! Nukes! Nukes! Nukes and more Nukes! I'm still pissed that the world didn't end on the last pony ride out of here. "Come on Armageddon", you can do it!!!
That grease-ball "Am-a-need-a-job' will really need a job come next June! Now, if the people could revolt, and get rid of all of those old-fart-white-bearded-know-it-alls, Iran could be a better place!! Islam will burn out eventually. More and more Muzzies are converting to Christianity, especially in Iran, because they see the evil Islam has spewed!
I think that ALL the problems in Iran are George Bushes fault..
Obama supporters are alot like Christmas lights......They arent very bright and you have a hard time getting even half of them to work..
Some funny@!$%#!!
The Iranian people need to overthrow their government.This is what happens to countries that allow religious zealots to take control.Notice the picture on the rial? The Iranian people want a modern and free society but it will come at a huge cost.
Man, this story has been out for days and days! While it is important to us to understand that the UN sanctions are working in Iran, is it not possible to take this off the top headline for the day of the Presidential debates, or is it a political statement? If it is a political statement, why not just come out and say it!
Using days old news from other news sources makes us think that there is no news team left at NBCNEWS. Do you go out in the field to gather new stories or are we forever tied to the re-runs? If NBCNEWS cannot gather their own news with their own staff, then you are only a simulation of a news entity. If you are dependent on ESPN or FOXNEWS for your sports news, then why should we read it here? If you just regurgitate other news sources, then you are a second rate player. If Mr Engle, who is in-country, working in the Middle East, gathering "on the ground" intel is what you would aspire to provide us with, then do it! Do it wholehearetedly, not half-assedly! Reprinting stories from Reuters makes us wonder if NBC is interested in giving us the news or just interested in us supporting your sponsors. Why not get your own folks out there! Why not be all you can be. If you want to present your side of the stories, then be on the spot! Be there! Not here, sitting in an air-conditioned office, pretending to be worthy! We need you to compete! And news should not be a profit and loss center! News should be the conscience of America and the world. NBC should certainly have enough advertising support to devote more time to support an actual field team of reporters, with the transport and the finances to compete.
Get them out there. Sure, we want to know the scoops, but not when they are days or weeks old! They should reside in your archives if they have been published for weeks!
Although this may be old news for some some of us have jobs and a repost of somthing like this story fits our schedule.
I understand your point of "news agencies" having reporters yet understand the logistics when every cell phone has more communication capabilities than NASA sent to the moon. and Iran is hostile territory for western reporters.
Awwww... my heart bleeds for these poor rag heads! We should do something nice for them like give them OBAMACARE... then they would REALLY hate us!!!!!
Wow Christmas came early woo hoo!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
There is a striking similarity with Iran and North Korea. Both countries have enough money to develop long range missles and nuclear bombs. Both leaders are so dilusional as to think they hold a major player place in the world. the common people go hungry while the politbureau eat wel. Both countries blame American agression for their problems. Both countries do not get aid although humanitarian aid has been given to North Korea. Any aid to these countries is ill advised. It takes a hungry desperate population to overthrow a corrupt government.
Funny, is a country that has gone fascist whereby you can be arrested and locked up and denied Writ of Habeous Corpus; a phone call; an attorney and scant legal representation this 'Cabron' utters these words?!!!!