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Iran: Who is behind the constant rise of currency plunge?

The U.S. dollar prices rise constantly in Iran
The U.S. dollar prices rise constantly in Iran

Analysis by PMOI/MEK

 

Iran, Sept. 27, 2018 - On September 24th, Iran’s state-run ISNA news agency said the price of each U.S. dollar had reached 159,000 rials and the “Bahar-e Azadi” gold coin was trading at 47.4 million rials.

However, websites covering currency and gold prices reported the U.S. dollar reaching 160,000 rials, adding the euro price had increased to 185,000 rials.

On the next day, the U.S. dollar soared above the 170,000 rial mark.

It is worth noting how on August 15th, meaning 21 days after appointing a new Central Bank chief, Iranian regime president Hassan Rouhani pledged currency prices would drop. To this day, however, these numbers have been on a constant rise.

Where is the root of this price hike and what are the consequences?

According to Iranian regime experts, more people becoming poor and slipping under the poverty line are among the first consequences of skyrocketing prices.

“The starting point of this economic fiasco is rooted in the government’s currency policies,” the Jahan-e San’at daily wrote.

The IRGC and government entities have a monopoly control over the country’s main oil and petrochemical exporters. This allows them to actually gain an advantage of the currency crisis. Individuals linked to these systems are known to purchase U.S. dollars at the government fixed rate of 42,000 rials and then sell on the black market at high numbers such as 200,000 rials, as the U.S. dollar reached on Wednesday.

Even the regime’s own experts and state-run media hold the Iranian regime accountable for the currency crisis.

“The banks and financial institutions owe the Central Bank at least $23.8 billion (based on the government fixed rate of 42,000 rial/dollar) and far more to the people. The government and the parliament decided to increase currency prices to provide for this budget,” one such expert said to an outlet recently.

The result has been the rich getting richer and the price of essential goods to skyrocket. Millions of hungry people become even poorer as more than 80 percent of the Iranian population live under poverty line.

Despite Rouhani’s claims of the currency price increase will lead to snowballing exports and the country’s revenues to escalate, with an emphasis on non-oil exports booming, the negative impact of this currency price increase is far more than the so-called profits gained claimed by Rouhani through non-oil exports.

The currency plunge has a deeply negative impact on inflation and production and increases the price of imports – especially raw material. And while Rouhani makes his claims about production, Iran’s production lines are literally coming to a halt already.

More people are turning towards launching middle-man trading institutions and domestic production in Iran is literally ruined.

As a result, the only true impact of skyrocketing currency prices is the poor getting poorer and more people living in poverty, while the rich few get richer.

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