Hossein Rahimi, the head of Iran's Economic Security Police

Iranian Economic Police Blame ‘Enemies’ For Currency Crisis

Sunday, 03/10/2024

Hossein Rahimi, the head of Iran's Economic Security Police, claims there are plans by ‘adversaries’ to disrupt the country's currency market in the lead up to Iranian new year celebrations.

"As we approach the New Iranian Year, there is a possibility of an increase in the exchange rate," he added. However, he attributed the fluctuation in the US dollar price to peripheral issues such as the ongoing conflict in Gaza, sparked by Iran-backed Hamas's invasion of Israel on October 7.

The ensuing regional conflict, backed by Iran's proxies, has further fueled a collapse of the country's economy with yet more sanctions following actions by militants from Iraq, Syria, Yemen and Lebanon.

His warning comes amidst growing criticism of the Iranian regime's inefficiency in managing prices, foreign policies, and the impact of nuclear sanctions, all of which have contributed to the current economic situation. Rahimi's remarks signal further depreciation of the Iranian rial, which has already experienced a significant decline. Since early January, the US dollar has surged from 500,000 rials to over 600,000, marking a 20 percent increase against the Iranian currency.

The official annual inflation rate stands near 50 percent, but the rapid depreciation of the rial could push inflation to hyper-inflation levels in the coming months.

The devaluation of the rial has been a prolonged trend since the 1979 revolution but intensified notably in 2018 following the US withdrawal from the nuclear deal and the subsequent sanctions on Iran's oil exports and banking sector. Remarkably, the currency was valued at 70 rials per dollar in 1978.

The sharp depreciation of the rial has exacerbated inflationary pressures over the past five years, pushing millions of Iranians below the poverty line.

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