Incompetent monetary and fiscal policies of the Iranian government are the primary reason for the inflation.
Yes, I'm sure those crippling sanctions, had nothing to do with it at all.....
Well, that too...
Follow along with the video below to see how to install our site as a web app on your home screen.
Note: This feature currently requires accessing the site using the built-in Safari browser.
Incompetent monetary and fiscal policies of the Iranian government are the primary reason for the inflation.
Yes, I'm sure those crippling sanctions, had nothing to do with it at all.....
This display of the regime's industrial muscle showcases why the collapse of Iran's rial is unlikely to pose any immediate threats to the country's real centers of power, despite protests last week that brought quick speculation in the West about the stirrings of a popular revolt. The top end of Iran's economy remains fully in the hands of the Revolutionary Guard and its networks, which span from oil to aerospace. And the lifeblood for the ruling clerics and the Guard still comes from Iran's oil exports that - on paper at least - bring in tens of millions of dollars a day to buffer against the blows hitting the rest of the country: a tanking currency, skyrocketing prices for imported goods and double-digit inflation.
"There is a lot of breathless talk about the regime collapsing," said Salman Shaikh, director of The Brookings Doha Center in Qatar. "It is no doubt under severe pressures and cannot ignore the currency situation, but the fundamentals of the economy, from the standpoint of the ruling system, are still OK." The sanctions target oil exports, banking, and other sectors. They are imposed over Iran's nuclear program. The U.S. and allies fear that the country's uranium enrichment labs could eventually produce warhead-grade material. Iran insists its nuclear efforts are only for energy and medical uses. But some in Washington and European capitals openly say that, the nuclear issue aside, they would be delighted if sanctions brought the downfall of Iran's clerical leadership.
To be sure, it would take far more than the small-scale demonstrations in Tehran last week to pose any immediate threat to Iran's ruling establishment, which has the huge strength of the Revolutionary Guard behind it. But neither can Iranian leaders afford to ignore the latest upheavals. The battle for perceptions and longer term stability goes by different rules. They must now explain to a reeling public how they intend to stabilize an economy slammed by Western sanctions that have cut into oil exports and a deflated currency that lost nearly 40 percent of its value in a weeklong plummet - and why taking to the streets in protests is not the answer.
Iran's leaders are desperate to quell any sense of uncertainty and panic - which largely drove the downward pressures on the currency. Even small flare-ups could start to erode their claims that sanctions and economic isolation cannot unravel the country. "Iran knows it needs to keep a tight lid on open opposition," said Mehrzad Boroujerdi, a Syracuse University professor who follows Iranian affairs. "As everyone knows well, these things can snowball out of control." One thing that cannot be contained is Iran's internal political skirmishing.
MORE