Yesterday we reported how as a result of a financial embargo enacted on by the US on New Year's Day, Iran's economy had promptly entered freefall mode and is now experiencing hyperinflation as the currency implodes. Today EA WorldNews gives us the response, which confirms that indeed the economy is in terminal shape following an interest rate hike to 20%. From the Source: "State news agency IRNA has no news on the Iranian currency this morning, but it does feature an interview with an official, noting the rise in interest rates to 20%. The effort is to reduce the flow of cash in the economy, but the official says it will increase capital investment by banks in an "impressive market"." As noted before, every incremental creep worse in the status quo merely makes the probability of escalation higher due to a lower opportunity cost of "irrationality" although we hope we are wrong. And in other unreported so far news, EA also informs us that in a street bomb explosion in Tehran earlier, one Mostafa Ahmadi Roshan, deputy head of procurement at the Natanz uranium enrichment facility, was killed. Are predator drones now patrolling over the Iran capital? Who knows, but Iran is already spinning the news.
Tehran Bomb. Fars explains who is behind this morning's explosion killing a University professor and wounding two people (see 0700 GMT): "The Secret is in the Headlines --- American Diplomacy Seasoned with Terror":
As [US Secretary of State Hillary] Clinton condemned Iran's peaceful nuclear enrichment and a Council on Foreign Relations report claimed insufficient confidence in Iran, a terrorist incident occurred in Tehran."
Deputy Speaker of Parliament Mohammad Reza Bahonar condemned the bomb as an act of "global arrogance". Khabar Online adds that there were shouts of "Death to America" in the Majlis.
At this point we have lost count where in the escalation dance we are. As always keep an eye on Brent.