UPDATE 1-Rial drop due to Iran policy, sanctions - US official

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LONDON, Oct 5 (Reuters) - The fall in the Iranian rial over the past year is the result of Tehran's economic mismanagement and sanctions imposed over its disputed nuclear programme, U.S. Treasury official David Cohen said on Friday.

Cohen, undersecretary for terrorism and financial intelligence, added in remarks on a visit to Britain's Chatham House think-tank that Iran had the ability to "relieve the pressure its people are feeling" by resolving concerns over its nuclear work.

Iran has blamed the plunge in the currency on what it says is a foreign conspiracy.

"What in particular has sparked the most recent precipitous decline in the rial, I'm not in a position to say on a granular basis," he said, adding however that over the past year it had fallen substantially.

"That is undoubtedly in significant part due to the Iranian government's own mismanagement of its economy and it is in part due to the effect of sanctions. The Iranian leadership has within its capacity the ability to relieve the pressure its people are feeling."

European governments and the United States are searching for fresh ways to pressure Tehran into scaling back its nuclear programme after diplomacy foundered earlier this year. Tehran dismisses Western concerns that its work has any military intentions.

(Reporting by William Maclean; Editing by Jon Boyle)

((william.maclean@thomsonreuters.com)(+442075428908))

Keywords: IRAN RIAL/