Iran Economy NewsIran’s Officials Admit to Playing With the Exchange Rate...

Iran’s Officials Admit to Playing With the Exchange Rate To Run Their Shattered Economy


‘Increasing the price of the dollar and keeping the dollar artificially high is a reality accepted by all elements of society. Therefore, we must accept the bitter fact that the main culprits of the economic costs and challenges and detriment to the people’s livelihood have been domestic policies,” Iran’s state-run Jahan-e-Sanat daily wrote on 27 February.

This confession is one of the most shameful confessions made by Iran’s state media. It is, in essence, an acknowledgment for years of concealing the fact that the governments of Iran were deliberately raising the exchange rate, compensating for the budget deficit, and paying astronomical salaries and other expenses resulting from false calculations.

On February 26, Mahmoud Vaezi, one of the closest figures to Iran’s president Hassan Rouhani, finally, after years of clumsy denials by the government officials, openly and unequivocally said that the increase in the price of the dollar was intentional: “We did this so that we could run the country’s economy.” (State-run website Asr-e-Eghtesad, February 27)

In justifying this action, he added: “Economically, the exchange rate in Iran is not 25,000 or 27,000 tomans, and we did this so that we could manage the country’s economy, so that today the enemies say that the maximum pressure has failed, and they are looking for a solution, and today Iran is in a position of power.”

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When the Khamenei-led regime is willing to ban the import of a valid COVID-19 vaccine to block the uprising and maintain its rule at the cost of the lives of thousands of Iranians, it is natural that using such a lever of playing with the price of dollar to finances its proxy wars and forces and of course its international terrorism is not a strange thing, and destroying the lives of millions of people and sending the under the line of poverty,  line of hunger and homelessness.

For years, one by one, the members of the regime swore that the increase in the price of the dollar was not their job and that the hands of global powers were at work.

For example, on January 13, 2021 Rouhani said in a cabinet meeting: “The reason for the rise in currency prices should be sought in the White House.”

Abdolnaser Hemmati, the head of the regime’s central bank, had repeatedly denied manipulating the exchange rate. In November 2020, he wrote on his web page:

“Regarding the current situation in the foreign exchange market, an attempt is made to seduce certain exchange rates in the market and attribute those rates to the central bank, paving the way for a certain level of exchange rate in the market. While denying all speculations, I emphasize that the only criterion for implementing the policies of the Central Bank is the economic interests of the country. It is not fair, there is talk of manipulating the exchange rate to justify the transfers and negotiations.” (State-run news agency Bours, November 2020)

Of course, these denials did not end with the head of the Central Bank and Rouhani. Last December, government spokesman Ali Rabiee reiterated that the government had not manipulated the exchange rate. Ali Rabiee told reporters about this:

“There has never been a meeting in the government where we do not worry about the exchange rate rising, and there was every attempt to make the exchange rate fall in any way. This is the pessimistic view of a small number of politicians.”

Even affiliated analysts of the regime have repeatedly said that the government itself is responsible for the rise in the price of currency, but the government ignored them.

“Two economists who agree with the government’s theory of exchange rate manipulation for the budget deficit are Hossein Raghfar, a professor of economics at Al-Zahra University, and Ali Dini Turkmani. The two emphasize that the government is raising the exchange rate to make up for its budget deficit.” (State-run website Fararou, May 16, 2020)

Albert Baghzian, a government’s economic expert, had said: “Hassan Rouhani’s government is responsible for the current situation and everything is under the control of the cabinet and passes through that channel. Therefore, the Istanbul-Ferdowsi crossroads cannot be blamed for the rising exchange rate.” (State-run website Rouydad, January 13, 2021)

The inevitable confession by Mahmoud Vaezi, head of Hassan Rouhani’s office, who says that we deliberately raised the price of currency and said in the media propaganda that the reason for this is foreign pressure, is due to government spending, part of which is the media that must repeat this lie repeatedly.

“Thus, the economic logic of determining the price of foreign exchange based on market supply and demand has been completely distorted in the field of Iranian policy-making to confirm the hypothesis that the government is involved in raising foreign exchange prices in order to cover the budget deficit. Although in the past, policymakers have denied the government’s alleged involvement in raising currency prices, Mahmoud Vaezi’s confession reveals more realities in the field of policymaking.” (State-run daily Jahan-e-Sanat, February 27, 2021)

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