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Iran Ups Interest Rates To Stem Currency Crisis

Iranian Economy and Finance Minister Shamseddin Hosseini
Iranian President Mahmud Ahmadinejad has agreed to increase bank interest rates in an effort to halt a fall in the value of Iran's currency.

Economy and Finance Minister Shamseddin Hosseini was quoted as saying that Ahmadinejad had approved a decision to raise interest rates on deposits to up to 21 percent.

Ahmadinejad, who is facing a political test of his leadership in Iran's parliamentary elections due in March, had previously vetoed efforts by the Iranian central bank to increase rates.

New Western sanctions targeting Iran's vital oil exports and its central bank have exacerbated fears about the Iranian economy and increased a run on hard currency.

The Iranian currency, the rial, has lost about 50 percent of its value over the past month.

compiled from agency reports