While each Presidential candidate put out general remarks about how he will repair Iran's battered economy, the news continues to be bleak for the Islamic Republic.
Bahar reports a new round of inflation for key goods and adds that there are shortages of subsidised currency --- at "official" rates, under which the Iranian Rial is three times stronger compared to "open-market" rates --- for imports of essential food items.

Meanwhile, Mohammad-Reza Sabzalipour, the head of Iran's centre for exports, has pointed to deliberate currency manipulation amid the Rial's fall by 70% last year.

Sabzalipour said that the Government, facing a 300 trillion Rial ($24.5 billion deficit at official rates, but only $8.5 billion at open-market rate) in the 2013/14 budget, was selling foreign currencies such as US dollars to get "open-market" Rials and thus nominally reduce the deficit.

The Rial is officially at 12250:1 vs. the US dollar, but is selling at 36200:1 this week.

Other leading figures have said the issue is even greater. MP Gholamreza Mesbahi-Moqaddam, a leading member of Parliament's Economy Committee, claim last November that the Government faced a deficit of  540 trillion Rials, while MP Ahmad Tavakoli, a prominent critic of the Government, has claimed the deficit is 860 trillion Rials.

The Iranian currency and Government budget have been under pressure as oil income fell about 50% last year. Oil income accounts for 60% of Government revenues and 80% of total exports.

By Enduring America

 

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