Analysis by PMOI/MEK
Iran, July 4, 2020—The value of the rial has further fallen and the official exchange rate in Tehran’s stock market has surpassed 200,000 rials per dollar. The price of every gold coin has reached 90,000,000 rials.
On June 19, the exchange rate was about 180,800 rials per dollar, but in less than two weeks, it has increased by more than 20 percent.
The value of the country's currency and the purchasing power of the middle class and the underprivileged has declined by 20 percent in just two weeks. People have become 20 percent poorer in just two weeks.
The Iranian regime President Hassan Rouhani said during the Government Economic Coordination Task meeting on June 23 had dismissed the increase in the exchange rate as temporary and “some international movements and psychological warfare,” and “creating an unrealistic concern among the people,” as the main causes of the “recent turmoil in the exchange market,”
Rouhani and some other government officials mentioned the resolution of the Board of Governors of the International Atomic Energy Agency (IAEA) and the presentation of the resolution by the Secretary-General of the United Nations to the Security Council as the main reason for the increase of the exchange rate.
This is while at the same time the regime announced victory over the U.S. pressure campaign in recent U.N. Security Council session. If such a claim was true, we should now see a decrease in the exchange rate and an increase in the price of the national currency. This is while these days, the reality has been different.
The free fall in the value of the country's currency is the main indicator of the bankruptcy of the country's economy. Rouhani announced on Wednesday, June 10 that the regime has lost $50 billion (8,700 trillion rials) of its income. This figure, according to Rouhani himself, is twice the budget of last year and 3,000 trillion rials more than the total budget of 2020.
Rouhani said: “Every government in the world would kneel in this situation, but thanks to the cooperation and support by the Supreme Leader (Ali Khamenei) the living conditions have become tolerable." He means by this that the regime did not cut back on spurious and anti-Iranian investments such as its nuclear project, ballistic missiles, and foreign terrorism but instead have imposed more taxes on a population.
Alongside the depreciation of the country's currency, the liquidity has also reached 26,510 trillion rials. The printing of banknotes and government borrowing from the Central Bank are the two main reasons for the increase in liquidity. This is while Rouhani had claimed on June 28 during the Coronavirus Task Force meeting that “Until today, not a single rial from our central bank has been borrowed by the government, neither in 2018, nor in 2019, nor in 2020. God willing, we will not have to borrow anything until the end of the year.”
In recent years it was mentioned that 10 trillion rials are added to the liquidity every day. But according to the state-run Eghtesad daily on July 2, this figure is currently 20 trillion rials, which means that within a year, liquidity has doubled.
The consequences of the terrible growth of liquidity is the increase of inflation and the price of all products. This includes the price of government-controlled products and services such as gasoline, water, electricity, bus, and train tickets. At the same time, the regime exports food, and basic necessities of the people abroad to fund internal suppression and export of terrorism. The Iranian economy faces at the same time an unbridled corruption in all government agencies.
The regime’s policy was based on deliberate economic pressure. By increasing the price of gasoline, electricity, bread etc. and downplaying coronavirus outbreak, the regime tried to cut the people’s breath. The numbers of coronavirus fatalities is rising every day and the People's Mojahedin Organization of Iran (PMOI/MEK) announced on Friday, July 3, that over 64,800 people have died of the novel coronavirus in 342 cities checkered across all of Iran’s 31 provinces.
But it seems that the regime’s own officials are afraid from the consequences of this policy.
The government spokesperson Ali Rabiei confirmed during a press conference on June 30 the warning signs and effects of “the movement of insecure currents inside the country.”
“We are witnessing that the ill-wishers of our country have created an unprecedented situation in this historical period for us… alongside that, there is a large-scale psychological operation going on in the country," Rabiei said.
The reality is that, sooner or later, the regime will face the consequences of its destructive economic and social policies. The same scenario happened during the November 2019 nationwide uprising is bound to repeat itself.
