Iran International
Trading in Tehran markets has largely come to a halt as the currency rial is near its all-time low, Iran International has learned from merchants and traders.
A textile trader told Iran International that “For now we have stopped selling our goods because we have no guarantee we can refill our stocks.” He added that "a lot of merchants have lost money because their payables are in dollars while they have to sell their goods in rials.”
Local media reported that the Central Bank of Iran intervened in the currency market by injecting $700 million in UAE dirhams on Sunday and the rial marginally rose from its all-time low of 600,000 against the US dollar. But such a sizeable intervention has not produced the desired result of stabilizing the rial.
First, the currency rose to 560,000 but after a few hours it dropped again, trading at more than 580,000 to the USD on Monday evening.
Parliament continued a third day of meetings about the currency crisis but there is little the legislature can do, except asking questions from President Ebrahim Raisi’s government. On Saturday, the president’s top economic aide, Mohammad Mokhber told lawmakers, “This is what it is,” rudely dismissing their criticism.
The fact that the reported monetary intervention was conducted using UAE dirhams instead of US dollars might indicate a shortage of greenbacks in the central bank.
The same grim news about a halt in trading came from the goldsmiths market in Tehran, where the fast-fluctuating currency rates have forced retailers to hold on to their gold and jewelry.
A currency dealer told Iran International that curbside trading has become highly risky as plainclothes security agents are everywhere in areas where usually people buy and sell foreign currencies.
Trading has also decreased in the food wholesalers’ market where one trader said goods such as sugar, oil and rice that can be stored have been shipped to warehouses, not to be sold until there is clarity with the value of the rial.
Pundits urged the government to tell the people what plans it has to tackle the crisis, but officials seemed bewildered and confused. The speaker of parliament Mohammad Bagher Ghalibaf (Qalibaf) was quick on Monday to claim that his fiefdom had predicted the currency crisis more than a month before and had warned the government. Others simply urged the government to “do something.”
Tehran’s Friday Prayer Imam, Kazem Sedighi, told the people to pray to fix the country’s problems. “We are in an economic war,” he said, just as the pioneers in Islam had to fight the unbelievers, this is also a holy war.
Foreign Minister Hossein Amir-Abdollahian was suddenly quoted as saying that during his visit to Iraq last week, he was told that the United States is open to resume nuclear negotiations. It was not clear why he had not disclosed the news three days earlier, except if suspicions that he tried to boost the rial was the real reason behind the belated revelation.
Some media outlets and commentators are speculating about changes in the government lineup, as many have been insisting for a long time that Raisi’s ministers are not up to the job.
One hardliner pundit, Mohammad Sadegh Koushki was quoted as saying that “If Mr. Raisi had the same information he has today prior to the presidential elections, he would have never become a candidate. Most presidential candidates [in Iran] have no idea about the magnitude of the job.”
Disqualifications have been so widespread that the actual elections of chambers of commerce, industries, mines and agriculture often referred to as “private sector’s parliament”, had to be postponed from February 29 to March 10 to allow investigation of candidates’ complaints.
Mehdi Karbasian, a former deputy minister of industries, mines and trade, who represents several high-profile companies, and Masoud Khansari, the incumbent chairman of Tehran Chamber of Commerce, the most influential chamber in the country, are among the candidates who have been disqualified.
Khansari had recently disclosed more than $10 billion of capital outflow from Iran per year.
In a commentary entitled “Butchering Chamber of Commerce Election [Candidates] Following Increase of Businessmen’s Criticism of Raisi Government”, Aftab News website on Saturday said disqualified candidates believe due to profuse criticisms of the government policies by businessmen and chambers, the ministry of industries, mines and trade has decided to take control and only allow its own supporters to take the key positions.
Iran’s economic crisis has deepened in recent months as the national currency has lost more than half of its value and hyper-inflation is feared in the next few months. Prominent businessmen holding positions in chambers of commerce have urged the government to change its foreign policy and end US economic sanctions.
The vetting was based on a recent regulation that required candidates to have at least two consecutive years of membership in chambers of commerce, to have paid insurance for a minimum of twenty employees during the past year, to have had a minimum annual turnover of 150 billion rials, and to have also been awarded for exports by the Trade Development Organization.
The boards in every city where the chamber of commerce elections were to be held consist of representatives of the Chamber of Commerce of Iran and the ministry of industries, mines and trade.
One of the barred candidates who did not want to be named, told Aftab News that that disqualifications were more a result of the candidates’ political leanings than the new regulations. “The ministry of industries, mines and trade and the government are trying hard to shift the control of the chambers, particularly the chambers of Iran and Tehran, to a certain political faction,” he said.
Aftab News which is believed to be close to former President Hassan Rouhani and the Moderation and Development Party, said most of the disqualified candidates have reformist affiliations.
The reformist Etemad newspaper wrote last week that those who are currently key members of the chambers were very unlikely to be allowed to run again. The newspaper predicted that the elections of the “private sector parliament” would be engineered to shift the control to government supporters.
The current chairman of the Iran Chamber of Commerce, Gholam-Hossein Shafei and some other high profile former members did not nominate themselves to run.
Chambers of commerce often produce economic reports that the government finds embarrassing while some prominent members such as Shafei have been vocal critics of the government’s lack of communication with representatives of the private sector over its economic policies.
Shafei recently strongly criticized the government’s proposed budget arguing that it would create serious challenges for the private sector.
Referring to the current foreign exchange rate crisis Saturday, a member of Tehran Chamber of Commerce, Ahmadreza Farshchian, described the past four years as the most difficult years for the private sector since the end of the Iran-Iraq War (1980-1988).