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Calling the latest round of U.S. sanction on its country “Psychological warfare,” Tehran’s foreign ministry says the new restrictions are simply aimed at upsetting social order.The Associated Press reports the new penalties fell into place Monday and give U.S. banks the ability to freeze assets linked to the Iranian government (via Newsday).
Reporting from Tehran, Robert Worth at The New York Times says that the sanctions have yet to take effect, but there is a rising “sense of panic about Iran’s encirclement.”
While there are not yet any food shortages, Iran does import as much rice and staple foods as it grows, and though Tehran is focusing its attention on trade with the East, troubles may already be brewing on that front as well.
Ratnajyoti Dutta and Mayank Bhardwaj at Reuters report that Iranian buyers just defaulted on payments for 200,000 tons of rice from their premier Indian supplier.
Most Indian exporters allow 90 days credit, but the payment for $144 million never arrived. The weak rial has made foreign purchases more expensive and the sanctions, according to Dutta and Bhardwaj, are making it difficult for Iran to continue using Dubai middlemen to pay their Indian suppliers.
India provides 70 per cent of Iran’s annual crop, and the president of the All India Rice Exporters’ Association says, “[The default] is a serious issue and we do not rule out further payment defaults by Iran. We have requested the government to step in.”
The Iranian public, especially the middle class, is frustrated and rumours are circulating that President Mahmoud Ahmadinejad is antagonizing the West to create financial pressures, while he and his cronies make money in the currency markets.
Whether the rumours are true or not, Ahmadinejad has been called to appear before Iran’s parliament next month to answer his handling of the economy.
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