The Islamic Republic’s currency, the rial, has reached even lower levels, sifting out regime insiders who continue to deny a catastrophic collapse or blame the West.
When the dollar crossed 430,000 rials, President Ebrahim Raisi replaced the governor of Iran’s central bank and ordered the economic team to come up with ideas to help the collapsing rial.
Raisi has appointed Mohammad Reza Farzin as chief banker. Mr Farzin, who has been CEO of Bank Melli Iran since last year, was also Chairman of the Board of Karafarin Bank before that.
At the cabinet meeting where Farzin was appointed, Raisi stressed the importance of controlling the value of foreign currencies and called on the central bank governor to “manage” the situation.
The Central Bank of Iran in front (left) and current governors Ali Salehabadi and Mohammad Reza Farzin
Since the current wave of protests began in Iran in mid-September, the rial has plunged to record lows, losing more than a third of its value against the dollar and spurring inflation of around 50% or more. The rial has now lost about 80% of its value compared to mid-2021 and has fallen nearly 50% since December 2021. Inflation is also soaring. Food prices jumped much faster than overall inflation, with some commodities he’s gone up 100% in a year.
The impact of the rial’s devaluation has yet to be fully reflected in markets, but Iran faces the danger of hyperinflation in the coming months.
On Wednesday, Khabar Online, An article was posted on a conservative site in Iran The historic devaluation has proven to cause divisions among hardliners in the country.Hardliners in Congress and some in the military have started tough criticize the presidential administration they admired Recently.
Many officials and insiders, including high-ranking officials, have issued warnings about the rial’s decline that endangers people’s livelihoods, but no one is willing to take responsibility.
Mohammad Eslami, head of Iran’s Atomic Energy Agency, said “the rise of the dollar and the fall of the rial is one of the conspiracies of the American people,” and the US hopes the people are fed up with economic hardships. He added that he was. protest.
He was probably referring to the harsh sanctions imposed by the US since 2018, when the Trump administration withdrew from the Obama-era nuclear deal known as the JCPOA. According to Washington, the Biden administration held talks with Iran for 18 months to revive the deal, but diplomatic efforts stalled in late August after Tehran made unacceptable demands.
Home Minister Ahmad Bahidi claimed that “the country has a lot of foreign currency.” This is a statement that could further anger the public, who accuse the government of not supporting Rial.
Jamshid Damoy, an economics professor at Lutheran University in California, described the situation as an unprecedented “economic storm” and said the root cause was a lack of trust in the government’s economic policies. He told Iran International that the bulk of the Islamic Republic’s income has always come from selling oil, which has been hampered because of US sanctions. He argued that it would devalue the currency.