Advertisements
Iran Activism

Where’s the Dollar going? Look at the Internal & External Factors of Rising Dollar Prices in Iran

The price of the dollar is moving in a moving direction.
Is this climbing an extraterritorial cause and is caused by US positions against the mullahs and in the face of oil sanctions?
Or, within the country, the components of the government increase the price of dollars by taking policies?
Is it possible for the mullahs to escape from the current difficult conditions? 

In front of this rentier community, the public is in the process of increasing the value of the rial of their earnings. In this field, more than the subject of “economic and psychological warfare” against the system, The subject of the “economic war” of the mullahs is against the people.

Rial that falls

On Wednesday, September 26, the president of the United States chaired a meeting of the United Nations Security Council. The focus of the tramp speech was to stop the Iranian regime from using the nuclear weapon and stop its evil activities.

The issue, however, led to the depreciation of the Rial and the rise in the dollar, as it returned to the currency market.

President America could a lecture or even a tweet, the market value of the rial against the dollar has undergone a change;

There is nothing more than an economic frailty that was supposed to be “resistant” to wear.

President of the United States in the Security Council

On Wednesday, September 26, President Donald Tramp assumed the presidency of the United Nations Security Council session to focus its attention on the fight against the proliferation of weapons of mass destruction on the Iranian nuclear program. [Voice of America October 4, 97]

But that did not mean that Donald Trump did not deal with other threats of the Iranian regime. Referring to the assassination of the Assad regime in Syria by chemical weapons, he accused the Iranian regime of allowing these killings to be possible.

Donald Trump stated that “the Iranian regime is an exporter of violence, assassination, and chaos.” And “illegally purchases sensitive items to advance its ballistic missile program, extending these weapons throughout the Middle East. “Because” this banner regime is the number one terrorist in the world and it fires a conflict in the region and beyond it.

A day before Tramp’s speech, ISNA quoted Mahmoud Bajeri, “Professor of Beheshti University,” wrote: “The cause of the price fluctuation of the dollar is outside the scope of economic issues,” the fact is that these are now political issues that are priced for currency… Part of the reason for rising dollar prices, which now exceeds 15 thousand Tomans, is due to psychological problems. “[ISNA September 27]

The day before Donald Trump’s a speech at the United Nations Security Council meeting, the President of the United States spoke at the UN General Assembly. In that speech, the President of the United States also noted the evil policies of the Iranian regime.

Following the speech of Tramp at the General Assembly, the price of the dollar in Iran reached 17 thousand Tomans. While the statement by the Foreign Ministers of the remaining members of the coalition on the definition of a mechanism for the continuation of trade with Iran has not affected the dollar’s decline. A statement following the meeting of the five remaining nuclear deal with Jawad Zarif was issued on Monday, September 26th. [Radio Farda September 27]

The significant drop in oil exports to Europe and Asia

So far, Iran’s oil exports to Europe and India have halved in recent months, and in August exports to China dropped by 25%.

Transportation of crude oil has become the main Achilles heel of Iran. On November 4, the Tramp government sanctions include Iran’s oil tanker insurance.

FITLAMAN, which follows shipping, and some shipping companies, shipping companies China, India, Greece, and Spain, who carried Iranian oil until July, stopped the deal with Iran.

Oil and currency

In an interview with ISNA on 27 September, Ebrahim Mohammad Wali said, referring to Rouhani’s delegation and delegation to New York: “If Iran can better manage its economic relations and oil sales, it would be hoped that the gold and currency market would be better organized within the country. And countries will have less impact on the Iranian economy. “[ISNA September 27]

Of course, it can be guessed that the chairman of the Union of Jewelry sellers has the effect of “countries”, the United States and those who accompany sanctions.

But the key point in his remarks is that the state of the gold and foreign exchange market inside the country is subject to a boycott of the oil spill in mid-November.

Based on Ebrahim Mohammad Wali’s remarks, it can be concluded that the system will not be able to control the foreign exchange market inside the country without selling a guaranteed amount of oil in the next day when sanctions start.

That’s the reason

Among the economic experts, this regime of those who basically denied the impact of Donald Trump’s speeches at the United Nations on the growth of the exchange rate in Iran.

“If we look at the upside of the dollar in the free market of Iran over the past two weeks, we see the Trump speech with a muzzle,” said one of the mullahs’ economic activists, Massoud Daneshmand, the general secretary house of the economy, told the “Jame Jam Online” a regime’s News website. The price of the dollar in the free market coincides, and we should not make bigger the impact of his speech on the market in our country. ”

(“Jame Jam Online” is a news agency affiliated with Jame Jam)

“The economy of Iran now depends on four distinct markets, with the first part being  4200 Tomans, about 70 items of goods, and the second one, the export currency,” said the House Economics Secretary. The entire business needs and part of Iran’s services are also provided. This is despite the fact that the third and fourth markets, namely, exchanges and the unofficial market, account for only 5% of the needs of our country’s economy. ”

Massoud Daneshmand, although he stressed that “we should not be a huge advertising jug in this 5 percent market”

But he himself acknowledged that “when, for example, the dollar exchange rate in the free market was  16,000 Tomans, the neighborhood supermarket suddenly became much more expensive than the price of cumin”.

On the morning of Wednesday, 26 Sep 2018 in New York, Trump took the chair of the Security Council session and delivered a lecture. The dollar continued to climb to 19 thousand Tomans.

Dollar trades started trading on the threshold of the 17,000 Tomans border on Wednesday, according to the World economy. At 5 pm, it reached about 17,600 Tomans. And while dollar demand in the market increased, the price of the dollar went up to the limit of 18 thousand Tomans and topped 19 thousand dollars. [World economy 27 sept.]

Interestingly, the accelerating US dollar appreciation in the hours leading up to Wednesday evening in Tehran coincided with the morning of New York, when the Security Council session was conducted by Trump.

Steel, petrochemical and automotive alliance against cheap dollars

However, according to many experts, the main reason for the acceleration of the price of the dollar should be sought inside Iran; where stakeholders and suppliers dollars to market on its own behalf can do with the dollar price up to play.

Some media and economic activists believe that exports were supposed to be used in addition to oil exports, in other areas, which “are, as a rule, the most important source of valuation of steel and petrochemical industries. It was, therefore, stipulated that the steel and petrochemical industries should continue to receive subsidies from the government (feed rates) and their products. ”

But “at an informal meeting held between steel, they decide not to enter the market and bring the dollar to  12,000 Tomans, while the 1USD was about 8,000 Tomans.

In addition, petrochemicals decide to stick with steel and propose a plan to play the stock market, both for the benefit of the index and for the lack of supply of currency to the market.

The automakers, which are affiliated with the steel and petrochemical industries, are in the process of getting out of the market and starting to speculate. ”

After the oil sector, it is the main source of revenue for the country; steel, petrochemical, and automotive industries.

All these major industries are available to the government or the IRGC, the two main employers in the Iranian market, rooted in various government components.

While they are protesting the dollar’s rising dollar rates, they are struggling to do this.

Of course, it is mostly in the hands of the Revolutionary Guard and its subsidiary companies, and a major part in its hands is the “Vali Faqih”

The secondary market collapses

After the government dollar of 4200Tomans announced on April 9th…Failed to control the dollar’s accelerating market, the issue of the secondary market was raised where exporters would have to export dollars based on an agreed price to importers.

In the context of the Secondary Currency Market, Vahid Shaghaghi Shahri, an economic analyst in an interview with the “Ferraro” newspaper, “this market” has now been “practically out of place” because “the official importer is not willing to buy the dollar for more than 8,000 Tomans.” Slowly

Because he knows that a commodity with a currency of more than 8,000 Tomans will not be purchased.on the other hand, the non-oil exporter is not willing to sell its 1USD for 8,000 Tomans. because there is a more attractive market in the country that can sell its dollar at higher prices.

The non-oil exporter, therefore, is trying not to enter the market either late or to enter less. ”

“That’s why our petrochemicals, which according to reports would inject about $ 8 billion to Nima, were injected to the NIMA until the moment I’m talking to you,” Wahid Shaghaghi added. Have. It is interesting to promise that by the end of the year, $ 7 billion or $ 8 billion will enter the market. However, according to statistics, they have to bring about $ 16 billion by the end of the year. The reason is that all our importers are looking for rent and profit, and they do not care what their actions bring to Iran’s economy. ”

This person can not easily talk!! But these people whom he describes as the Mafia Godfather

All of the Revolutionary Guards are senior members of the Revolutionary Guards Corps who manage the business of the corporation. It is, in fact, a mafia case in such a way that even within the regime itself, this regime is taught to them by their fear and they are referred to as the idiosyncratic ones.

“The sum total has led to the fact that the secondary market, which is quite transparent, is practically non-existent because of the unwillingness of the exporters, and it is a free market that has taken the direction of the Iranian economy,” Shataghi continued. meanwhile, I must say that contrary to the statements of some officials that our free market is a small market, incidentally, this market is currently very large and wide. Because the informal importer and trafficker will provide their foreign currency needs from the free market, travelers and students buy their counterparts from this market, and besides, they will provide equally free speculation and trading on the free market; therefore, our free market is currently a big and influential market, and it also leads to other markets. ”

Perhaps for readers in Europe and the United States, what is the question of what is the foreign exchange position in the country’s economy? A question that is being answered by both Rouhani and Yahya Alashah. The answers, both of which suggest that the turbulence of the third dollar market should not affect the price of commodities on the market. So why does it work?

What percentage of foreign currency is the percentage of the country’s economy? This was the question that President Hassan Rouhani made during a government meeting on September 12. His administration appears to be under pressure from the rising cost of currency, although some also accuse him and his government that the scene is the rise in the price of the currency. Nevertheless, Rouhani has to answer this question, since he sees his government and, of course, the whole system exposed to an “economic and psychological warfare.” An answer that reveals some of the realities of Iran’s economy.

Which currency in which currency?

Rouhani sets the “gross domestic product (GDP)” as the basis for the calculation he wants to announce. “If we calculate GDP on the basis of purchasing power or market value, the import of goods and services that rely on foreign currency is very small,” he says.

In an account of the “very few percentages” of “goods and services imports,” the regime’s president states, “Based on some calculations, about 5 percent, and based on others that do not take into account the value and power of purchasing, is about 10 percent.”. »

Rouhani continues to admit that 10 percent of the “commodity and service imports” are reliant on the currency, to three types of currency pricing, to show how much of the 10 percent of the currencies of the three currency groups come in.

Three types of currency pricing

  1. On April 9, Jahangiri, Rouhani’s deputy announced that all available prices for the currency are illegal and the only legal price is 4200 Tomans=1USD, which is provided by the government. This Jahangir’s reaction to the unhealthy dollar climb since the beginning of this year was Iranian.
  2. After a while, it turned out that the government would not be able to handle the exchange market with a one-dollar dollar and a government-run dollar. As a result, according to the proposals originally put forward by the Chamber of Commerce, Industries, Mines and Agriculture, a secondary market was also defined for the currency. In the secondary market, as announced, some exporters in the government in the fields of petrochemicals, steel, and … sell foreign currency based on agreed prices to importers.
  3. The two previous markets, of course, did not prevent the market from staying and growing.

In this third market, which has been in the tradesmen, the floor of the streets and the alleyway along the streets of Istanbul’s crossroads in Tehran, the dollar has gone upside down, disregarding government orders and the price announced by the government or the secondary market price.

What is daily and even hours-per-hour about the value of the dollar and, indeed, the rate of the fall of the rial, is the same as the current rate on the market.

Third Market Place!

In order to show that 10% of imported goods and services should not be affected by the fluctuation of the dollar in the third market, Rouhani says: “We have to see how much of this amount is with the currency of 4200 Tomans= 1USD, how much with the currency of about 7 thousand tomans and how much for The third market remains. The third market is less than 1 percent or 1.3 percent against the value of domestic production. “[ILNA September 12]

In other words, Rouhani wants to conclude that the majority of it is 10% of the import, either with the exchange of 4200 Tomans(= 1USD) or the price set in the secondary market for the dollar, and the third market share against those two other foreign exchange markets and against the value The domestic production of the country “is very small, so logically, the rise in the dollar price in the third market should not affect the price of.

The reality is something else because with the rise in the price of the currency in the third market all prices are affected.

Is this only because of its psychological aspect or is the tough economic realities also effective in this regard?

Individuals and institutions that use rents for cheaper dollars in the first and second markets put it in ways that are more profitable on the basis of dollar prices on the third market.

This category, which is generally placed among the government or its affiliated factions, sells dollars in the third market at a higher price. or they offer their imports based on the “dollar price” in the “third market”.

 

In front of this rentier community, the public is in the process of increasing the value of the rial of their earnings. In this field, more than the subject of “economic and psychological warfare” against the system, The subject of the “economic war” of the mullahs is against the people. In this ambush, with a dramatic pace, a larger share of liquidity is being driven from pockets of people and public funds to specific institutions.

Lie a shortage of currency

The other thing that Rouhani made at the government meeting was a few days earlier by the former chairman of the Tehran Chamber of Commerce and head of Iran-Iraq Chamber of Commerce, Yahya Alashah.

Alashaq, in an interview published by ISNA on September 8, stated that “we should not have such price mutations at the dollar rate” with the realities of currency, incomes,  and facilities available in the country, and considering actual costs. ”

The former head of the Tehran Chamber of Commerce further condemned his remarks by mentioning the numbers that were supposed to be accurate on the part of someone like him.

Alashah, “The sum of real currency needs of the country” as follows:

  1. Approximately $ 15 to $ 20 billion for import of essential goods
  2. About 40 to 50 billion dollars for import of other goods (unnecessary goods)
  3. $10 billion for travelers
  4. At least $10 billion for smuggling imports

The total of these items, which Alashaq has estimated to be the highest, is $ 90 billion.

According to the head of the Iran-Iraq Joint Chamber of Commerce, “in total, there will be $ 95 billion of foreign exchange earnings from oil and non-oil revenues.

Also, according to international organizations, $ 109 billion worth of foreign exchange reserves are available abroad in countries such as India, China, etc. ”

“Therefore, about $ 200 billion by the end of the year is the country’s foreign exchange reserves,” Alashah added. “We have about two times the need for access to currency, so the problem is not the supply and demand of the currency.” [ISNA 8 SEP]

The first result from Rouhani’s and Alashah’s remarks is the relentless rise in the price of the dollar to the rise in the price of basic and substantially more commodities on the market.

Meanwhile, Rouhani wants to portray the government as a victim of an economic and psychological warfare, and Alashaq wants to highlight the lack of management of the country’s economy.

Both of them consider their factional imperatives.

But behind the scenes, the rulers, those who enjoy the Dollar dollar, benefit from the main winners.

At the same time, the minimum who is supposed to finish the month with the rights of about one million and a hundred thousand tomans will be in a more critical condition every day, of course, in circumstances where there is a job or if salaries are paid.

And they are the victims of the destructive and destructive policies of this anti-Iranian and anti-humanist regime.

And the people were thrown into the streets for the same time, and the Cambridge struck, and in recent days there is a strike on the market, as well as the strike of the workers of the oil industry,

These do not have any more messages

The regime tried to show an abnormal situation by putting pressure on the market and society, but this led all the arrows to go back to their own, and not to US sanctions.

Yes, the policies of this regime are the overthrow of the house. This regime, with its criminal guards, is pushing for a policy of burning land in Iran.

The former diplomat admitted: “This currency blight, which is not the end result of the politics and policy of the game, is for all government and non-state actors, has led the country to a state of turbulence; The situation we have not experienced in the 8-year war with Iraq.
With a lecture, Tramp will cost of dollar 1,000  Tomans a ton and collapses with other internal speeches to threaten the world of  2,000 Tomans. The current value of the rial is our place in the world. The United States and the Tramp have even brought Iran to Iran without firing. “

Hamid Reza Ashrafzadeh, an economics analyst, points out, from another angle, the issue of dollar appreciation. “What is happening these days is because of the fact that some people are trying to withdraw money from the country,” he said in a conversation about the cause of the fall of the Rial. But they can not make it into the dollar in the Iranian market. Because they are detected very quickly due to their volume; so what they do, the rials get to neighboring markets such as Dubai and the rest of the neighboring cities, where they are converted into currency. That is why the value of the rial is steadily declining, and the price is rising every day. ”

The fact, however, is that with the management of the economic realm, the mullahs’ regime cannot manage to manage the economic realm.

The economy in Iran is under the influence of political powers within the system.

The system requires political solutions to survive the economic conditions in existence; solutions that, of course, challenge it.

Can the mullah regime in Iran be able to rescue sanctions and continue to sell its oil to the bottom line? Within the regime, but the looks are very disappointing.

The site of “Iranian diplomacy”, which reflects the views of the clerical faction on the foreign policy issues of the regime. During an interview with Fereydoun Majlesi, he was in a difficult situation in the economic war. Fereydoun Majlesi, former diplomat of the Ministry of Foreign Affairs

The expert in international affairs describes a team that has come to work in the United States, saying: “The team,” I emphasize alone, “is” doing well for Iran “.” His team knows [Trump] How to complete Iran’s case without the help of the world. ”

“Fereydoun Majlesi”, which needs diplomatic achievements for the regime during a Rouhani’s visit to New York, recalling the support given to the nuclear agreement at the Security Council, states: “The dollar, which has reached 20 thousand Tomans, has virtually any achievement, even if Overwhelmingly outweighs the achievements that we have in New York a few days ago. ”

The former diplomat admitted: “This currency blight, which is not the end result of the politics and policy of the game, is for all government and non-state actors, has led the country to a state of turbulence; The situation we have not experienced in the 8-year war with Iraq.

With a lecture, Tramp will cost of dollar 1,000  Tomans a ton and collapses with other internal speeches to threaten the world of  2,000 Tomans. The current value of the rial is our place in the world. The United States and the Tramp have even brought Iran to Iran without firing. ”

“We now have a banking problem, we have a currency problem, we have a livelihood problem, we have a problem with production, employment, and so on,” said Majlesi.

He considers the system to be an internal conflict over the adoption of a policy that undermined the survival of the ruling system. He is arrogant that the Revolutionary Guards are the strongest opposition to joining the FATF.

He mentions the negative attitude of the Revolutionary Guards as “internal enemies”, whose positions have thrown the ruling system into a dead end.

After confirming the economic pressures on the system, Fereydoun Majlesi confirmed: “Most importantly, we have a domestic enemy problem. An enemy that prevents FATF from coming to fruition. “The way out for the “Majlesi” and his faction is to descend against the United States. What will bring the poisonous cups to the system?

The “Majlesi” calls on the regime to “defy its diplomatic and diplomatic policies” in the face of global commitments “because otherwise, it will not have any support in the Arab world, Europe, or Russia and China.

Kneeling to survive

The hijacking and terrorist regime of the mullahs say that kneeling to survive, rather than changing them, do not want to change nature, but they want to remain the same terrorist regime, and even dare to fall with the main ruler in this regime, which the ruler and Why are not they behind the guards? Because they themselves were all members of the Revolutionary Guards or somehow a partner

Members of the revolutionary guard attend the anniversary ceremony of Iran’s Islamic Revolution at the Khomeini shrine in the Behesht Zahra cemetery, south of Tehran, February 1, 2012

The IRGC is the main player in Iran’s underground economy, which is a valuable source of income for the Guards. This income provides the Guards with financial independence from Iran’s civil politicians. It also puts the IRGC in charge of Iran’s underworld and its criminal gangs.

For example, General Hossein Hamedani, who was recently killed in Syria explained in an interview how the IRGC organized criminal gangs during the “Green Revolution” anti-regime uprising in 2009 in order to crack down on street demonstrations.

The IRGC’s involvement in the underground economy allows the Guards to expand their financial, political, and operational capabilities in Iran and around the world. The IRGC, which is perhaps the most equipped and sophisticated terrorist group of our time, has the will and capability to build a worldwide illicit network

Iran’s interior minister 4 or 5 years ago declared that the value of narcotic drug sales in Iran is $3 billion per year, not including the commission from transporting the drugs from Afghanistan to other transit points, like the Balkans. The US Department of the Treasury has placed Quds Force Commander Esmail Baghbani on the US sanctions list for his role in drug trafficking. The IRGC also has close ties with the drug cartels in the South and Central America through Hezbollah.

Globally, the underground economy covers a considerable portion of the world’s economic activities. As the IMF explains, deficient rule of law in a country is correlated with a larger underground economy.

Iran has the notably weak rule of law — and its underground economy is thriving. The IRGC is the major player in this shadow economy. For the IRGC, the underground is an unobservable source of wealth that is nevertheless important to understanding the Guard’s abilities and behavior.

The underground economy, as the IRS defines it, “represents income earned under the table and off the books.” It can include legal income laundered to avoid taxation, and also the trade in explicitly illegal goods, like drugs or weapons.

Nearing the end

A sub-capitalist government that shows in the authority of the Velayat-e faqih, and a capitalist body; a regime that follows the economic relations of the peoples wanting to control a country like Iran in the 21st century, and even recognized on the world stage as a power. Such a diet is approaching the end of the same time as it strikes it.

Islamic Caliphate! In Iran on the one hand, it acknowledges that any position of Trump will affect the price of the dollar in Iran; in other words, its economic experts admit that they will not “resist” from their resistance economy.

But on the other hand, they admit that what increases the dollar’s price in Iran is increasingly the struggle of government-owned sectors in the economy.

The ruling elites do not seek to preserve the economy of the whole system, which seeks to profit from the share they own.

However, part of the country’s capital, which is largely made up of government components, is also fleeing the country.

All of this shows that a contradictory system, in addition to having survived a popular uprising, also strives to kill itself without having a way to survive.

Advertisements

About the author

Bahar Mehr

Bahar Mehr

I am a political journalist who focuses on Human Rights issues in the Middle East and around the world but with a deep focus on Iran.
I am currently providing my reports to independent journalism outlets such as the one you see here.
I will do my best in hope for freedom and democracy in Iran.

Follow us on Twitter

Advertisements
Advertisements