Rejection of Raisi’s Government in the Currency Market
According to Irangate, the thirteenth government marked its first anniversary amid escalating concerns among economic activists about instability in various sectors. Financial markets are experiencing unstable conditions, and statistics indicate the government’s disappointing performance in managing the country’s economy.
The dollar exchange rate has always held a significant position among citizens and investors as one of the most crucial economic factors. For instance, to assess the performance of governments, the fluctuations in the exchange rate over a specific period are often referenced. Naturally, the smaller the range of price fluctuations in the free market, the more it indicates relative economic stability in the country and the stability of the rial’s value compared to the world’s strong currencies.
Therefore, on the occasion of the first anniversary of Ebrahim Raisi’s government, it would be worthwhile to examine the state of the currency market and compare the performance of the thirteenth government in this area with the first-year record of each of the previous governments over the past 20 years.
Ebrahim Raisi’s Thirteenth Government
Seyed Ebrahim Raisi took on the responsibility of leading the government on August 3, 2021, at a time when the dollar rate had reached relative stability. Despite severe tensions in international relations and consequently the country’s economy, the twelfth government had managed to largely control the spikes in the dollar rate.
However, Ebrahim Raisi had repeatedly criticized Rouhani’s government for its performance in the currency market during the thirteenth presidential election. Hojatollah Abdolmaleki, who supported Raisi in the election and was appointed as the Minister of Labor in the thirteenth government, also described controlling the exchange rate as a very simple and accessible task.
Abdolmaleki even talked about controlling the dollar rate and stabilizing it below the 20,000 toman channel through the injection of billions of dollars into the market. Nevertheless, the thirteenth government took over the country’s leadership with the dollar trading at 25,000 tomans in the Tehran free market.
But it wasn’t long before the dollar rate in the free market broke its historical record and reached the highest price ever recorded in Iran’s economic history. In June of this year, amid concerns among economic activists, the dollar entered the 33,000 toman channel.
The government also attempted to moderate market conditions by implementing security measures in the currency market and banning the publication of free market rates for all media in the country. These actions led to a temporary and not very extensive downward trend in the exchange rate, but the dollar rate in the free market never again saw the sub-30,000 toman channel.
Although at times when hopeful news about Iran’s nuclear case was released, the currency market reacted positively, and the dollar price consequently decreased. Recently, this mechanism led to a reduction in the currency price to the range of 31,500 tomans on August 3, 2022.
Comparing the exchange rate fluctuations at the first anniversary of the thirteenth government indicates the weakest performance of a government in the currency market. The free market dollar price was recorded at 25,600 tomans on August 3 of the previous year.
The trend of dollar rate changes progressed in such a way that on August 3, 2022, the price of 31,450 tomans was recorded. These figures indicate a 228% increase in the dollar price in just the first year of Seyed Ebrahim Raisi’s presidency. Comparing this amount with the same period for five governments over the past 20 years shows the weakest performance by Raisi’s government. The following examines the statistics related to dollar rate changes in the first year of the previous four governments.
Twelfth Government: Hassan Rouhani’s Second Term
Hassan Rouhani formed his second government while Donald Trump was in power at the White House, and multiple crises in international relations were forming for Iran. Nonetheless, the twelfth government managed to largely control the spikes in the free market exchange rate in its first year of operation.
The dollar price on August 3, 2017, when the twelfth government was officially formed, was traded in the range of 3,820 tomans. However, exactly at the end of the twelfth government’s first year, the figure of 4,411 tomans was recorded for the free market dollar price. This increase means a 154% growth in the dollar price during this period, despite the twelfth government facing various international crises, particularly regarding the nuclear case and movements led by Trump from the White House.
Eleventh Government: Hassan Rouhani’s First Term
Hassan Rouhani assumed the presidency on August 3, 2013, when the dollar was traded at 3,185 tomans in the free market. The currency market had experienced extensive jumps in the dollar rate in the two years before Rouhani took office, and prices were highly unstable.
However, with the start of Hassan Rouhani’s government in the summer of 2013 and the initiation of nuclear negotiations with the P5+1 countries, the financial markets in the country began to stabilize. This situation led to a 0.1% decrease in the dollar price during the first year of the eleventh government. This trend resulted in the stabilization of the dollar rate in the range of 3,135 tomans on August 3, 2014.
Of course, it should not be forgotten that the destructive crisis of financial and credit institutions inherited from the tenth government also had a widespread negative impact on the stabilization of the exchange rate. The reduction in the country’s foreign exchange earnings following the imposition of oil and banking sanctions was another factor that made the situation much more difficult for the government’s economic team.
Tenth Government: Mahmoud Ahmadinejad’s Second Term
Mahmoud Ahmadinejad’s second government was formed in a very turbulent socio-political and consequently economic environment. Although oil revenues, due to the unprecedented increase in oil prices and the lack of widespread sanctions in 2009, allowed the currency market to experience relatively stable conditions in the first year of the tenth government, the dollar rate on August 3, 2010, grew by 0.6% from the range of 999 tomans in 2009 to 1,060 tomans.
Ninth Government: Mahmoud Ahmadinejad’s First Term
On August 3, 2005, Iranians witnessed the formation of one of the most controversial governments in the history of the Islamic Republic of Iran. Mahmoud Ahmadinejad had succeeded in winning the second round of the ninth presidential election.
In any case, in the first year of Ahmadinejad’s presidency, the currency market also faced price increases, with the dollar price of 904 tomans on August 3, 2005, stabilizing at 922 tomans after a year. This price increase also meant a growth of over 0.2% during the first year of the ninth government.
Raisi’s Government: The Biggest Loser in the Currency Market
As observed in the above report, the thirteenth government demonstrated the weakest performance in managing the currency market within the specified timeframe. This happened while the government did not face a new crisis in the international arena or crushing banking and oil sanctions in the past year.
In other words, it can be said that despite the overall stability in the country’s public space, Raisi’s government failed to maintain the value of the national currency even to the extent that its predecessors had achieved. This is while, according to this comparative report, the exchange rate mainly experienced severe spikes when the country was grappling with serious crises.
Therefore, it can be said that Raisi and his supporters’ claims during the presidential election about ‘jihadi management’ of the currency market did not materialize in reality.
Statistics and figures show that the thirteenth government not only failed to stop the decline in the national currency’s value but also, with unwise actions such as securitizing the currency market and preventing the free flow of information in the country’s economic media, further disrupted the situation.