TEHRAN - Iran, trying to encourage non-oil exports, is easing strict currency rules by increasingly allowing exporters to swap foreign earnings at an attractive free market rate rather than one set by the central bank…

A previous attempt at convertibility in 1993 ended in flights to the dollar, raising the politically unpalatable prospect of rampant inflation, currently running at around an annual 20 percent.

In 1993, Iran's previous president Akbar Hashemi Rafsanjani tried to unify exchange rates adopted after the 1979 revolution.

But this led to a run on the rial as Iranians sought dollars as a refuge against inflation, scuppering the policy by 1994. Further currency calamity followed in 1995 when the United States imposed trade and investment sanctions against Tehran, weakening the rial to 7,000 on the dollar.

U.S. Tells Moscow to Halt Ballistic Missile Aid to Iran, The New York Times, August 22

The Clinton administration has been quietly pressing Russia for most of this year to stop Russian scientists and military institutes from helping Iran develop a new ballistic missile that could reach Israel, Saudi Arabia and American troops in the Persian Gulf, senior administration officials say...

Deployment of the kind of mid-range ballistic missile the Americans are concerned about could be between two years and five years or more away, depending on how much help Iran gets from Russia and other countries, like China and North Korea, officials and experts said. One major concern is that Iran is also trying to develop nuclear, biological and chemical weapons that can be carried by such a missile...

Iran already has some shorter-range missiles like the Scud B and an extended-range Scud, sometimes known as the Scud C. But the issue the Americans are concerned about is a large ballistic missile with a range of between 683 miles and 1,243 miles with a throwweight of about 3,085 pounds, large enough for a crude nuclear warhead or, a much cheaper alternative, a biological or chemical one. The missile being developed is so inaccurate that it can be aimed only at a large target like a city, the officials say, and so can only serve as a "terror weapon…"

The Iranians are being very sophisticated, the White House official said. "They're trying to work all the problems, including navigation, propulsion and engines," and they are identifying key institutes, scientists and companies that have what they need and might be willing to sell it.

Iran: President Under Microscope, Voice of America, August 23

… Will he or won't he? That is the question asked these days in many western capitals, as diplomats and political scientists scramble to figure out president Khatami's political mantra....

But the Middle East expert at Washington's Center for Strategic and International Studies, Anthony Cordesman, urged caution in assessing the new Iranian leader.

Cordesman: When you read between the lines, the problem is whether you are reading what is written there or you are reading your own hopes...

Mr. Cordesman went on to say that even if Mr. Khatami were a reformer, it is still questionable how much he would be able to achieve given the Iranian power structure.

Cordesman: We call him the president, and its it perfectly accurate. But it is the supreme religious leader, who is the commander of the armed forces, the commander of the security forces, who ultimately controls the strings of power and foreign policy… The revolutionary guards are still under their radical leader and a separate force reporting to the religious leader. There are two separate councils, which can override the decisions of the president.

Meanwhile, Iran's new culture minister, Ataollah Mohajerani, who had previously advocated talks with the United States, was made to recant under conservative pressure. And analysts say this conservative influence may be strong enough to scuttle any foreign policy innovations.

In Iran, "America" Still a Dreaded Word, Reuter, August 24

TEHRAN - Just saying the word "America" can cause problems in Iran, even for local non-governmental groups seeking to promote understanding between people of the two countries.

The latest episode to highlight the sensitivity to the dreaded A-word has emerged from an invitation issued by an Iranian women's group for American women scholars to visit the Islamic republic.

The association itself, although it is headed by a daughter of Iranian former President Akbar Hashemi Rafsanjani, was reluctant in public to go as far as confirming that the visitors would indeed come from America.

… For the time being it appears the only safe way to use the U.S. word is in the context of "Death to America," a regular chant at popular gatherings across Iran.

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