[Lamplighter]

We'll see...

Maybe we are already seeing....

Bloomberg
January 06, 2012, 4:46 AM EST

Iran Central Bank Moves to Rescue Rial as Allies Tighten Net

Jan. 5 (Bloomberg) -- Iran’s central bank moved to avert a slide in the value of the rial
as the U.S. and allies prepared for further sanctions that may include an oil embargo.<snip>

Today, foreign-currency traders in Tehran were ignoring instructions issued yesterday
by the central bank for them to sell the dollar at the rate of 14,000 rials, Fars said.
They refused to trade at that rate or were only using the rate of 16,000 rials, Fars said.
Directors of Iran’s banks were asked to meet central bank Governor Mahmoud Bahmani
today to address the rial’s volatility. The bank will host a meeting of economists on Jan. 9
to discuss management of the exchange rate, Fars said.

The currency has plunged because “Iranians are seeking safer havens in internationally traded currencies
and gold as the country faces the prospect of dealing with tougher international sanctions,”
said Jarmo Kotilaine, chief economist at National Commercial Bank in Saudi Arabia.<snip>

Iran’s inflation rate has surged as the government removed subsidies on staple goods.
It may reach 22 percent by the end of the current calendar year in March,
Deputy Economy Minister Mohammad-Reza Farzin said last month.
“Inflation is a big problem as it is, and a devaluation would obviously
fuel imported inflation even further,” Kotilaine said. <snip>

Shipping
Iran has warned it may halt traffic through the Strait of Hormuz,
the passageway for about a third of the world’s seaborne-traded crude,
in response to curbs on its oil sales.

That’s probably “a bluff,” Paul Sullivan, a political scientist specializing in Middle East security
at Georgetown University in Washington, said in an e-mailed response to questions.
“They would strangle their economy and Iraq’s, their ally.
It could also be seen as an act of war.”

The U.K. would be willing to join a military action aimed at keeping the strait open,
Defense Secretary Philip Hammond will say in a speech in Washington today,
according to extracts released by his office.