By Ncr-Iran Staff
Many economists had predicted that the growing financial and livelihood crises of this year were going to be accompanied by irreversible damages.
According to an economist and lecturer at Kharazmi University, named Vahid Shaghaghi, the sudden decline in Iran’s national currency value is yet to exert its full impact on the country’s economy; in fact, Shaghaghi believes that the inflation will be rising over 30% by the end of the year.
In a statement released by the government-owned newsagency, “ISNA”, Shaghaghi states: “Due to the increase in dollar rate over the past 8 months, the national currency value of Iran and subsequently the purchasing power of Iranians, has declined by 80%”.
Shaghaghi, who has likened this decline to an “economic stroke”, adds that the ratio of liquidity to GDP is between 60 to 70 percent on a global scale; whereas in Iran, it is a shocking 110 percent, which places it at a “warning border”. He also believes that the existence of a “weak banking system” is the cause of a “destructive wandering of liquidity”, i.e., the lack of production.
According to Shaghaghi, more than $30 billion fled Iran in last year alone.
On 13th June, the head of the regime’s presidential office Mahmoud Vaezi, reported: “Even in areas where dollar is received for 4200 Toman, it is seen to be sold for much higher amounts”.
Some media outlets have recently announced that on 13th June 2018, dollar value went over 7000 Toman in Iran’s open market.
Despite the efforts of Rouhani’s government in April, when 1 dollar was worth 4200 Toman and currency trading was also banned, the rate of dollar and various other foreign currencies has increased exponentially since; and is still fluctuating in the black market.
Experts have also expressed their disagreement with the claims made earlier by the president, Hassan Rouhani, who spoke of ‘one-digit’ inflation rates; the statistics presented by the government officials are obviously incorrect.
Given the current circumstances, one would come to question the reason behind such a significant decline in Iran’s national currency value over the past several years; why is it that despite massive sales of its national resources (such as oil, gas, petrochemicals, handicrafts, and various other products), Iran’s currency value has dropped so low?
According to financial experts, there are several reasons for this; such as “the loss of balance between payments and receipts of foreign exchange”, “the inappropriate outlook of government on foreign currencies”, the existence of political and social issues, the smuggling of goods and currency, the expansion of governmental corruption, and the emergence of serious international crises.
Petrochemical exports, for instance, play an important role in Iran’s supply of currency; but rather than importing the resultant funds into the country, exporters have been depositing them into their foreign accounts instead; similar examples have been observed in other fields (e.g., oil exports) over the past years, where governmental officials and mafia affiliates have been seen to deposit their funds into overseas bank accounts; all of which are just a few indications of a corrupted government which continues to steal from its people.
Just last year, there were reports of oil ships and towers gone missing, along with the flight of 50 million dollars; all of which lead to the so called “loss of balance between payments and receipts of currency”; and consequently, to the outbreak of a significant decline in the national currency value.