Iran's parliament approves $462 billion budget

Iran's parliament on Thursday signed off on a $462 billion budget bill for the current Iranian year that is about 9 percent less than the budget approved in the previous calendar year, a consequence attributed to the new exchange rate of the U.S dollar.

The Iranian currency has lost much of its value because of Western sanctions over Iran's nuclear program.

The new budget comes at a time when Iran is facing growing international pressure and isolation over its controversial nuclear program, which the United States and its allies maintain is geared toward developing atomic weapons. Iran has repeatedly dismissed the claim, arguing that the program is purely for peaceful purposes, such as generating electricity.

The U.S. has imposed new sanctions targeting Iran's central bank while the European Union has imposed an oil embargo -- measures Tehran has blasted as tantamount to a declaration of economic war on the Islamic Republic. The EU embargo is slated to go into effect in July.

With its economy hurting, Iran this year increased the official exchange rate to 12,260 rials to the dollar. The previous budget was based on the rate of 10,500 rials per dollar. The country also increased the price of exporting oil to $85 from $81.5 per barrel.

More than 80 percent of Iran's foreign revenue comes from crude exports.

After endorsement in parliament, the budget must still be approved by the Guardian Council, a constitutional watchdog, before it becomes law.

President Mahmoud Ahmadinejad has said that the budget for this Iranian year, which runs through March 2013, is aimed at reducing the country's dependence on oil revenues.

Critics said the budget will lead to more reliance on oil income, more liquidity and inflation, which is now about 20 percent.