Iran’s currency devaluation is the result of a joint conspiracy of the government and the parliament

Iran’s currency devaluation is the result of a joint conspiracy of the government and the parliament

Iran’s currency devaluation

Analysis by PMOI/MEK

Feb. 28, 2019 - While the Iranian national currency is devaluated again to 140,000 rials against the U.S. dollar, controversies and discussions about the roots of the problem have increased again.

Hassan Rouhani’s government maintains U.S. sanctions are at the root of inflation, decrease of purchasing power and increase in U.S. dollars value against the national currency. But other Iranian pundits believe that other parameters like a conspiracy between the government and parliament to sack the people are at works.

On February 24, the Iranian television broadcasted a program about the roots of the recent spike in exchange rates, featuring Hossein Raghfar, a well-known Iranian regime economist, who said about the unexpected surge of U.S. dollar against the rial: “Unfortunately, the so-called private banks in the country are facing serious financial problems and the government and parliament imagine that by increasing foreign currencies’ value [against the Iranian rial] they can provide enough resources to compensate for the private banking sector’s wrongdoings.  The whereabout of a significant part of the people’s deposits with these banks is unclear.”

“The government and parliament have commonly decided to cover this out of the people’s pockets, meaning that by increasing foreign currencies’ values, this is what is going to happen practically. Therefore, people will sleep at night and wake up in the morning to see that their savings in banks has lost 20 to 30 percent of its value and their purchasing power has diminished significantly,” he added.

“The last shock to the exchange rate will disrupt the whole economy, manufacturing will definitely stop, some very simple calculations will show that at least one million official jobs will be destroyed,” Raghfar said about the catastrophic impact of the conspiracy between the government and parliament to increase the U.S. dollar’s rate.

ISNA news agency also published an article titled “who is the culprit of the increase in dollar’s exchange rate” and writes: “Considering that there hasn’t been any negative development in the foreign relations field, it appears that the root of increasing exchange rates is internal and currently, the central bank sees the government as the culprit of inflation.”

Even Jahan-e Sanat newspaper, close to Rouhani’s faction, called the government’s promises untrustworthy and wrote on February 22: “You can’t trust the government’s promises anymore when it plays with the pace of the market and every other day makes the situation for its people more difficult with another decision and perspective. As long at the deficits are covered from the pockets of the people, the situation will become worse than it is right now.”

Arman Hajian Fard, an economic analyst, says in an interview with the IRGC Quds Force’s Tasnim news agency: “The wage of an Iranian worker is among the lowest wages payed to workers in the world… The poverty line has reached 60 million rials [about 430 USD at an exchange rate of 140,000 rials to the USD] and living costs of a family have increased 80 percent compared to January 2018 and reached 50 million rials [per month] and in summer 2018 the people living below poverty line have increase from 12 to 50 percent [of the population].”

The formal minimum monthly wage in Iran is about 14 million rials for a father of a family of four who works 6 to 8 hours a day, 6 days a week, which isn’t even 30 percent of the official living costs of a family.