PLAYING WITH THE EXCHANGE RATE, THE DIRTIEST FIELD FOR LOOTING PEOPLE BY THE IRANIAN REGIME

By Mahdavi Nasim

Despite rising of the price of foreign currencies, particularly dollar, in Iran, according to streets reports, still there is a great demand for purchasing and there are long queues in front of the exchange offices.

Since the beginning of the new Iranian year, the price of US dollar started to rise up but when in the last few days the price of the dollar exceeded 6 thousand tomans, attracted the grave attention.

6  thousand Tomans for the dollar, was considered as a psychological boundary for the market. There was the impression of public opinion that the government does not want dollar to exceed 4 thousand tomans, but when the price of dollar crossed this border, the assumption came up on the market that the government is unable to keep it below 4,000 Tomans. Particularly, the exchange rate fluctuation in a recent month has increased, and even in some days, the dollar rate has exceeded 6800 Tomans, which is an unprecedented event.

The rising of dollar rates was simultaneous with a rise in the price of gold coins and fluctuations in stock indices, all were supposed to be related, the fact that once again proved the foreign exchange market, particularly the price of the dollar, is the litmus test of the Iranian economy.

Among all the factors that led to Rial’s slide, the most important are as follow,

The first, approaching Tramp's deadline to withdraw Iran Nuclear Agreement aka the Joint Comprehensive Plan of Action (JCPOA). He has announced that he would not approve it with the same conditions and wants to ‘fix’ the flaws and include the missile program and the destructive role of Iran regime in the region. Which means the mullahs' interference in the Gulf region internal affairs has caused serious problems for Iran's economic.

The second factor is the impact of the recent Iranian uprising in more than 140 cities in Iran, which led to increasing the volatility of the economic situation and the reduction of the Rial's value. Due to that, the demand for foreign currency in the market was increased and, lots of investors removed their money from banks and financial institutions, converting them to the foreign currencies (mostly dollars and euros). They sought to maintain their asset value.

The price of the Free Market Dollar price increased for another 200 Tomans after the protests.

The third factor returns to the government's will to offset the next year's budget deficit. Hadi Ghavami, member of the Planning and Budget Committee of the Parliament, pointed: "The computational rate of the currency of the (Iranian) year 1396 was 3,300 toman, But now the exchange rate is 3 thousand and 800 toman،Thus, at least 10 trillion tomans from the exchange rate until the end of

The year will go into the pocket of the government, which partly offsets part of the budget deficit.

It’s clear that the currency crisis is the result of accumulated, unresolved economic problems that are now threatening the regime in its entirety. That’s why Abbas Akhundi, Minister of Urban Development in Rouhani’s government, sees the regime in a challenging situation with very low level of satisfaction among different social strata.

It now becomes clear what a ‘disintegrated decision-making structure’ means when it comes to resolving these challenges, and in this case harnessing the currency crisis.

The meaning of a ‘disintegrated decision-making structure’ is that the regime is too incapable to resolve such crises, inevitably driving the situation towards a nationwide uprising and a subsequent regime overthrow