Iran’s Rial Plunges More, Revealing a Collapsed Economy and a Bankrupted Regime

Iran’s Currency Crisis Worsens as Threat of Greater International Pressure Looms

Written by
Mehdi Oghbai

A year and a half since the Iranian regime’s supreme leader, Ali Khamenei, chose Ebrahim Raisi as the president, Iran’s economic crunch has worsened despite Raisi’s “economic prosperity” rhetoric. Amid a nationwide uprising and facing a restive society, this economic shakeout could spark further protests and jeopardize the ruling theocracy more.

The value of Iran’s national currency, the Rial, has plunged. The dollar exchange rate in Iran has surpassed half a million rials.

The devaluation of a country’s national currency causes negative economic growth and increases unemployment and living costs. The rise of the living cost and redistribution of income that a currency devaluation entails shifts the burden of the country’s financial calamity on low-income groups, which in Iran’s case is the majority of the 87 million population.

“A report by the Ministry of Labor underlines that the number of the population below the poverty line in 2022 has surpassed 25.5 million, and the country faces a 34% decrease in Grosse Domestic Product (GDP),” the state-run Jamaran website quoted Farshad Momeni, a regime-affiliated economist, on February 22.

According to the Jamaran website on February 23, “The annual report by Iran’s Statistic Center, the point-to-point inflation of foods and beverages has reached 70.5%, and the country’s general inflation rate has surpassed 47.7%.”

Although engineered, the state statistics show the grim face of poverty and how Iranians struggle to make ends meet. Yet, Raisi continues his bogus claims of prosperity, only to pull the wool over his own eyes. “We will certainly control inflation and decrease [economic] problems,” Raisi said in his remarks in the regime’s Majlis (parliament) on February 18. The lies of a president with a “sixth-grade” level of education have not only been called out by people since his selection but also caused much stir in the crisis-riddled regime.

“The government officials are far from the facts and realities on the ground but do not stop from ordering economic problems to end. The people’s purchasing power shrinks daily, and they cannot make a living,” said MP Sadif Badri in response to Raisi, referring to his previous ridiculous gestures, such as ordering poverty to be eradicated in two weeks!

“Every year, more people fall under the poverty line and leave metropolises to live on cities’ outskirts and shanty towns. The dollar value has increased by 50% in a short time. The prices of consumer goods have increased by 90% since Raisi took office,” MP Hassan Shojai acknowledged on February 21.

“If Raisi and his government, based on the facts on the ground, really think that the dollar rate and inflation are decreasing, we should ask them how they reached this conclusion. What are the statistics approving these remarks? Economy, without numbers, is meaningless,” wrote the state-run Jomhuri-e Eslami daily on February 20.

“Heads of branches should endeavor to resolve people’s economic problems. People shouldn’t be left hungry,” Ahmad Jennati acknowledged on February 23. As the head of the regime’s Expediency Council, he lives a lavish life and is a close figure to Khamenei.

Calling out Raisi’s economic plans reveals a deep crack in the regime, following Khamenei’s efforts to consolidate power by selecting Raisi, handpicking the Majlis, and praising their “economic plans for the future.”

While regime officials and state media warn about people’s reactions and the current financial crisis in Iran, Raisi and his government figured out another way to plunder Iranians further.

On February 21, Iran’s state media reported that Mohammad Reza Farzin, the Central Bank chief, announced the creation of the so-called “Center of Gold and Currency Exchange.” The goal of this center is to find and announce the real rate of currencies. He also underlined that government continues allocating the so-called “Nimaee” currency, or allocating dollars to certain importers at a 280,000 rials rate.

However, during the first day of this center, a dollar was equivalent to 41,000 rials and soon surpassed half a million rials. Creating this center and officializing two different dollar exchange rates only allow regime affiliates to easily import goods at lower prices and sell at the free market’s rate.

“Farzin zealously followed the same policy of wasting currencies and causing corruption. As underlined in an interview in his first 40 days in office, he distributed $6.5 billion at the Nimaee rate. In other words, he distributed 950 trillion rials. So the ‘special parties’ received 23.7 trillion rials per day plus its windfall of profits,” the state-run Eghtesad 24 website wrote on February 14.

While Tehran’s pundits and apologists try to imply that Iran’s fluctuating currency rate and financial calamity are due to sanctions, authorities acknowledge it is the regime behind the country’s economic crunch.

“The real exchange rate of the dollar is below 200,000 rials,” said MP Ruhollah Izadkhah on February 22.

“This currency rate is not real, and we all know that there is deviltry behind it,” said MP Mohammad Taghi Naghdali on February 23.

By playing with the currency rate and importing goods at a lower price but selling them more expensive, Tehran could plunder the last dimes of impoverished Iranians and spend it on its oppressive apparatus to counter widespread protests.

Raisi’s scandalous monetary juggling shows the economic collapse, incurable currency crisis, and the political failure of Khamenei’s consolidation project to preserve the system against the uprising. Iran’s economy under the regime has collapsed. Any investment in it or hopes to resurrect it by injecting money is a mirage, as every penny goes to the ayatollahs’ pocket.

Therefore, Iranians consider regime change the only solution to the current situation. As they have chanted during the uprising, “Poverty, corruption, and high prices; we will continue until the regime’s downfall.”

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