At a meeting of a government economic task force on Tuesday evening, President Ebrahaim Raisi (Raeesi) ordered authorities to identify “manipulators and destabilizers in the foreign exchange market” while exercising their powers to manage the rate change.

“Some of these people in the country and others abroad are trying to drive up the exchange rates,” he said, presumably referring to press briefings by US and EU officials suggesting that talks in Vienna to revive the 2015 Iran nuclear deal had been thwarted by proposals presented by Tehran last week.

“We have concrete information that a group of people are trying day and night to increase the exchange rate…in order to tie the [Vienna nuclear] talks to the economy and impose their own demands on the nation,” Raisi had said hours earlier, in a speech to university students.

Blaming speculators and resorting to arrests and even executions is nothing new for the government. In 2018, Iran has executed two men − including Vahid Mazloumin, the ‘Sultan of Coins’ arrested with two tons of gold coins − for illegal currency transactions.

President Donald Trump’s administration argued that the extensive damage inflicted by “maximum pressure” – including recession and continued currency depreciation – would lead Tehran to a series of concessions. President Joe Biden, who took office in January, pledged to revive the JCPOA but maintained “maximum pressure” as leverage.

The rial-dollar exchange rate breached the all-important 300,000 threshold on Saturday, a day after EU and US negotiators returned to their capitals from Vienna, downplaying prospects of a deal. The dollar was trading near 310,000 on Wednesday despite assurances from Raisi and the Central Bank Governor that the currency would stabilize.

On Wednesday, local media criticized and even ridiculed Raisi’s attempt to blame speculators for the fall of the rial, rather than admitting that US sanctions should be lifted and oil revenues should rise before the crisis hits. Iranian economy is not easing somewhat.

The conservative newspaper Jomhouri Eslami wrote on Wednesday that Raisi’s remarks were reminiscent of the case of forex trader Jamshid Besmellah, arrested in 2012 after a public denunciation by Vice President Mohammad-Reza Rahimi for large-scale profiteering. Besmellah, who served two years in prison, insisted he had done nothing wrong and was a scapegoat.

“It was stopped…but the rise in the dollar and other currencies continued,” noted Jomhouri Eslami. “The market went its own way and neither the orders nor the arrests made the slightest difference. We hope that Mr. [his recent allegations] are not just a projection [of blame].”

Although the depreciation of the currency is not solely linked to the sanctions, the compression of Iran’s foreign currency reserves by third-party US sanctions has led to daily liquidity growth of more than 50 trillion rials per day on the basis of Central Bank figures, and consumer price inflation that reached 45 percent according to Iranian government figures.

Raisi has identified the fight against the budget deficit as a priority in his television interview on Sunday, when he argued that his government had managed to pay civil servants’ salaries without borrowing from the Central Bank.

In a commentary published on Tuesday, titled “The Mystery of Printing Money”, the Etemad newspaper said that Raisi’s government did not borrow directly from the Central Bank but borrowed from other banks, which are all state or quasi-state banks. Etemad argued that this is equivalent to borrowing from the Central Bank, because other lenders in turn have to borrow from the Central Bank, which has to print money. Liquidity fueling inflation has quadrupled since 2018, when the United States imposed sanctions.