MEK Iran: Economic Collapse
Economic experts claim Iran is the only country in the world with double-digit inflation rates for more than four decades. As a result, poverty is spreading quickly and economic and social pillars are being seriously damaged. On October 10, the state-run Hamdeli newspaper declared, “Economic statistics have gone beyond catastrophe,”.
The latest Central Bank report
“According to the latest Central Bank report, the volume of liquidity exceeded 39,000 trillion rials (about $140 billion). This figure indicates a 40 percent increase in liquidity over the past year,” per a report published on October 10 by Iran’s state-run Vatanemrooz daily.
The state-run newspaper Donya-e-Eqtesad published an article about the government’s role in inflating prices, which reads in part: “The government’s unhealthy and inflationary financing is at the root of the significant and sharp monetary base growth in the 12 months leading up to mid-summer this year. These policies come at a cost to society in the form of excessive inflation, which has recently risen to above 40%.”
The rise in prices of people’s basic commodities
“The most important reasons for the rise in prices of people’s basic commodities are general inflation and corporate price competition, currency fluctuations, and national currency depreciation,” stated government expert Ali Ghanbari on October 10, according to the Setaresobh newspaper.
To address this severe situation, the government must first stop producing unsupported banknotes and redirect loose capital to production, which has proven extremely difficult, if not impossible. The country’s production has been decimated under the current circumstances, and part of the reason for all of the country’s money loss is that there is no incentive to use it in production.
In a situation where the government intentionally boosts the price of foreign exchange to compensate for the budget deficit, stabilizing the foreign exchange market is also one of the strategies to prevent inflation.
The administration was drastically boosting the currency rate
Former President Hassan Rouhani’s chief of staff, Mahmoud Vaezi, admitted earlier that the administration was drastically boosting the currency rate to fund spending and budget deficits.
“Iran’s exchange rate is neither 250 nor 2700 thousand rials (each dollar now is about 280,000 rials). We took these steps in order to manage the country’s economy, and our adversaries now claim that maximum pressure failed!” On February 27, 2020, the semi-official ISNA news agency reported.
The regime has robbed the country and its people of their last rials, and the public now stands to lose nothing. This is the driving force behind the country’s ongoing protests, despite the regime’s repression, the development of the coronavirus, and a slew of other crises. The regime is attempting to deceive the public by making dubious promises about eliminating corruption and it’s only a matter of time before the situation spirals out of control.
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