Iran’s Currency Is Collapsing And Maybe The Regime Too

Posted: Apr 16, 2018 10:50 AM
Iran’s Currency Is Collapsing And Maybe The Regime Too

 The ruling mullah’s have wrecked the Iranian economy. This cannot be blamed on foreigners or other social expedients. The mullah’s have no skill in managing anything resembling a functioning economy. What westerners fail to image is the dissimilarity between western polities and oriental despots. Does anyone really think Comrade Mugabe or Maduro had any skill in managing Zimbabwe or Venezuela? This ought to give American progressives a pause as they seek to supplant our Constitutional Republic with a social democracy. Even the Eurocrats have to govern. Applying solutions to real problems requires skills that aren’t commanded. What are playing out in Iranian society is the social pathologies of militant identity politics. 

 Right now the Iranian rial remains in free fall with an exchange rate parity of 60,000 Iranian rials to 1 U.S. Dollar.  Bijan Khajehpour of Atieh International has followed six factors driving the Iranian rial down. Having longstanding policy and management issues, the Central Bank of Iran (CBI) continues to struggle with rate differentials between official and free market currency rates. The CBI continues to struggle to find hard foreign currencies in the repatriation of reserves. Lastly, the CBI interventions into stalling the fall have exacerbated the rage of policy proposals effectively driving the rial down further. In economic parlance these are supply side concerns relating the availability of foreign reserves, but the mullah’s have created the very demand side pressures driving currency deprecation. 

 In president Rouhani’s Feburary address he floundered to explain the cause of a drastically falling currency. He’s been imploring Iranian’s to accept that there is no economic reason justifying the kind of depreciation the Iranian people are experiencing. That’s because it’s a social expression of political discontent. 

 In the end, the decoupling of the rial from other foreign exchange rates will imperil the lifeblood of the mullah’s. It’s already happening because the CBI has exhausted its ability to manage the currency. Only the politics of Iran’s domestic market can save the Iranians. 

 As team Trump begins to explore ending the Iranian agreement, he needs to pursue policies that directly threaten the Iranian regime. The mullah’s are living on borrowed time. 

 We need an accelerant and the exhausted Iranian people are it.