Inflation has soared and the rial has maintained its downward trend despite haphazard national measures such as injecting dollars into currency markets and selling gold on stock markets.
The point-to-point inflation rate reported by the Statistical Center of Iran (SCI) has exceeded 50% for the past Iranian month ended 20 January, and the food inflation rate has averaged over 70%.
The SCI considers 12 groups of goods and services with an overall inflation rate of 51%. Hotels and restaurants saw the highest increase of 78.5%, followed by food.
The SCI announced that food inflation will exceed 70% given rising prices for bread and cereals, red meat, dairy and fruit. Edible oil inflation was about 248% compared to the same period. Previous year. Much of the rise is due to governments removing subsidies for essential goods, which are now embedded in the supply chain in the form of cheaper dollars for importers. Among groceries, the lowest inflation rates were in tea, coffee, cocoa, soft drinks and fruit juices, at an average of 32%.
Pharmaceuticals and healthcare services recorded a 54% increase, followed by transport and clothing prices, which rose by 46.9 and 45.7 respectively.
The numerical value is price rise slow In some states, grocery inflation has reached 100% in the previous month. Most of the price increases have come since early May, when the government ended food import subsidies to save about $15 billion a year. The move immediately boosted the prices of basic groceries such as bread, dairy, cooking oil and meat significantly. The government has repeatedly said that oil exports have risen steadily despite sanctions by the United States, but economic conditions continue to deteriorate and Iran’s plunging currency, the rial, hit a historic low in the last few months.
The government has taken a number of steps over the past few months to curb inflation and curb the rial’s sharp decline.this replaced the governor of the central bank We introduced dollars into the market about a month ago and have balanced demand. On Tuesday, it started offering gold coins on the stock market and also launched a system of nominally fixed exchange rates for the plunge currency, which has lost at least 50% of its value since mid-2021.
On Tuesday, the dollar exchanged for more than 440,000 rials to the US dollar, rebounding from the 450,000 lows of the past few days.
The government started selling gold on the stock market in the form of securities. According to the plan, people can buy up to five gold coins weighing about 2 grams (called quarter gold coins in Iran because a full gold coin weighs about 8 grams) at current prices, but Just receive the paperwork and have to wait until the government announces the date when you can receive the coins. People tend to rush such government schemes because by the time they get their hands on the coin, the price will go up as the rial falls and they can make a small profit. Just get a lot of money and give people proof of purchase.The government plans to sell 450,000 of these 2 gram coins on the stock market in the next 10 days. This is equivalent to almost 1 ton of gold.
Additionally, this week the government pumped $305 million into the currency market Over two days after the rial fell to a historic low of 450,000 against the US dollar.
Earlier this week, Congress Approved the outline of the budget proposal For the next Iranian year starting on March 21, without considering unrealistic assumptions. The current budget deficit admitted by the government is about 4,760 trillion rials, or more than $10 billion. But the actual deficit is probably double that.