Why was the spring of the dollar’s price released?
Why was the spring of the dollar’s price released? According to Iran Gate, the price of the dollar once again entered a record-breaking phase in Tehran’s currency market. Reports and observations from currency market activists indicate that each US dollar is being traded in the open market for around 45 to 46 thousand tomans, which is considered an astonishing and catastrophic record in the history of Iran’s economy.
This week, after overcoming the initial winter tensions and the injection of currency into the market following Mohammad Reza Farzin’s appointment, the US dollar has once again entered a rising phase. Observations from Tehran’s currency market indicate a record of over 45 thousand tomans for each US dollar. In other words, the rial is currently at its lowest value in history, which means an accelerated process of the national currency’s exponential depreciation.
What is the reason for the dollar’s price surge?
In an analysis published after Mohammad Reza Farzin’s appointment as the head of the Central Bank, Iran Gate emphasized the temporary nature of the currency rate reduction in the first week of Farzin’s tenure on Mirdamad Street and reported on the Central Bank compressing the currency rate spring.
Reports available to Iran Gate indicated a widespread injection of currency into the open market aimed at controlling prices. Therefore, it was expected that with the cessation of the currency injection process, those in this field would once again witness price surges and consecutive record-breaking.
Given the government’s lack of access to currency resources from oil exports and other non-oil export revenues due to sanctions and Iran’s placement on the Financial Action Task Force’s blacklist, such an event in the currency market was anticipated. In other words, it can be said that the government and Central Bank’s hands were tied for market currency injection, and as usual, the dollar’s price skyrocketed.
A 50 thousand toman dollar is on the way
Most economic analysts believe that the rise in the dollar rate, considering the country’s economic situation, is not unusual or unexpected. On the other hand, many believe that the tools to suppress the dollar rate in the open market are currently not available to the government and the Central Bank. Additionally, the budget bill contains numerous items that, according to economists, will act as inflation drivers in the coming year.
Therefore, many activists predict that breaking the 50 thousand toman barrier for the dollar’s price before Nowruz 1402 is entirely possible and natural. However, experience has shown that the option of price suppression in the open market will never be removed from the Islamic Republic’s agenda. Therefore, it is said that this record-breaking trend will definitely occur after a tumultuous and volatile period in the currency market.
In fact, it is predicted that the US dollar rate in Tehran’s currency market will end the month of Bahman in a range between 41 thousand tomans to 47 thousand tomans. However, in mid-Esfand or the second half of the last month of the current year, the currency market will see the 50 thousand toman rate for the dollar.
Of course, it should be noted that this scenario will occur only if there is no change in the Islamic Republic’s policies in dealing with the Western world. Because in the event of diplomatic breakthroughs, it is expected that some of Iran’s blocked resources will become available to the government, and naturally, the Central Bank will act to suppress the currency rate in the open market.