Iran Is Moving To Lift Dollar Subsidies … Warnings About A Wave Of High Prices And Protests

The Iranian government today presented a bill to Parliament to abolish support for the dollar and the rest of foreign currencies for traders and replace it with the “live subsidy program”, amid warnings about high inflation. in Iran, which surpassed 40%, which would lead to a rapid surge in prices and an outbreak of protests.

According to reports from Iranian news agencies, by presenting this project, the government seeks to “combat the exploitation of government-backed hard currency beneficiaries”, as traders who committed to importing commodities were buying the dollar for 4,200 toman. (42,000 riyals), while its price on the free market exceeded 28,000 toman.

Ever since Ebrahim Raisi took office as Iran’s president, he has consistently criticized the hard currency support process, stating that it has not led to the elimination of fraud and corruption, as well as the control of inflation and high inflation rates.

Dollar support was originally intended for the import of 27 commodities, but is now limited to the import of only four or five commodities.

The growing economic pressures following the international sanctions imposed on the Iranian regime, and the growing decline in earnings in hard currency in dollars, are among the most important reasons that prompted the government to make a tale step.

The Central Bank of Iran reports that in the past six months, $ 9.5 billion of subsidized currency worth 4,200 tomans has been earmarked for the import of basic goods, including around 400 million for the import of vaccines.

Realizing the political and social consequences that will result from the cancellation of the subsidy in hard currency, the Iranian president had spoken in a television interview with him on the need to announce the decision in advance, and not surprising people, as happened in the case of the sudden increase in gasoline prices by 300%, after which protests were launched in November 2019.

Economists believe that eliminating the dollar’s support will set its price in the free market at a threshold of 28,000 tomans per dollar, and lead to a six-fold increase in the prices of basic necessities.

Read More About: Business News

Leave a Reply