News / Middle East

Hardline Cleric Urges Iranians to Overcome Rial Fall

The Iranian rial has plummeted against the dollar in recent days further unsettling Iran's economy.
The Iranian rial has plummeted against the dollar in recent days further unsettling Iran's economy.
A senior hardline Iranian cleric used Friday prayers to reassure Iranians they will overcome the recent plunge in the value of the country’s currency, as public frustration with the crisis turned from street protests to online mockery.

Ayatollah Ahmad Khatami told worshippers at Tehran University “these pressures won’t last,” according to the semi-official Mehr News Agency.

Khatami also urged politicians not to blame each other using the media because it was what the Western media wanted to see, the report said. He told the Iranian people it was their right to be upset, but that reacting through chaos and uproar was what the “enemy” wanted. 

Khatami added that Iran “has proven that it will not be worn down by pressures and has experienced how to live with problems.”

On Tuesday, Iranian President Mahmoud Ahmadinejad blamed the latest economic woes on “psychological pressures” linked to Western sanctions and criticized politicians who said his policies have exacerbated the collapse of the currency.

Declining value of the Iranian rialDeclining value of the Iranian rial
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Declining value of the Iranian rial
Declining value of the Iranian rial
The rial has lost a third of its value in the past several days and dropped as much as 80 percent over the past year, further compromising Iran’s already shaky economy. Iran’s official inflation rate is 25 percent. Western sanctions have severely restricted the country’s ability to sell oil on the world market and limited its access to the international banking system.

A young engineer in Tehran told VOA his construction business is suffering from the increase in prices.

“Iron material used to be 9,000 rials per kilo last year. Now it’s 20,000 rials,” he said. “Two weeks ago, a polystyrene that we used had increased in price by 20 percent, but in the past few days, it is no longer sold because the material is imported from South Korea.”

He said there are many other examples of the challenges facing Iranians.

“I wanted to buy a new car, but the national car companies are no longer registering or even pre-registering [vehicles] for sale because they want to increase their prices due to the increase in dollar rates, but the parliament does not allow them,” he said.

An Iranian software developer who works in Dubai and travels to Tehran frequently told VOA that not only have prices increased, but the quality of goods has declined as well.

“My friend who has MS [multiple sclerosis] used to buy a better quality medicine made in Europe. Now that brand is no longer sold in the market, so he pays more for a lower quality brand, and he can feel the effect,” the source said.

He said life feels like it was back in the Iran-Iraq war years of the 1980s, when goods were scarce.

“The quality of national brands has declined, and imported goods are much more expensive and hard to find. Every time I travel back, my friends ask for stuff such as Gillette razors.”

The rial has lost so much value that it has inspired a popular joke in Iran, which suggests even a homeless person in New York can use their change to stay at the posh Dariush Grand Hotel on the resort island of Kish in the Persian Gulf.

The joke echoes criticism leveled against Ahmadinejad for his spending during his recent trip to New York for the U.N. General Assembly, where he travelled with more than 100 people in his entourage.

Parliament member Jafar Ghaderia criticized Ahmadinejad, saying it would have been better for the president to spend that money on industry rather than his delegates. 

On social media, Iranians are using satire as a safe way to protest. Some popular jokes include “Farewell Turkey. Hello Caspian” and “Goodbye Adidas and Timberland, Hello Kafsh Melli,” referring to an Iranian brand of shoe. The same joke is made even about small items like chewing gum, where it goes “Farewell Orbit, hello Shik,” an Iranian brand.

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by: davi damiano from: malawi
October 07, 2012 4:20 PM
this promblem are same as malawi we suffer as iran devolution is bad so the western countries as find the war of poor our economey as falldown

by: Godwin from: Nigeria
October 06, 2012 8:13 AM
Iranian leaders do not see the hardship of the people as suffering. They see it as a training for the troubles ahead. The so-called spiritual leader must achieve a nuclear bomb at all cost. They believe that it will be soon, and when it does happen and the nuclear bomb gets exploded, people are expected to live without western goods and services, and possibly remain inside closed doors and tunnels in gas masks for several days and weeks if they will save from the nuclear fumes at a time when there maybe no Europe or America because they have been sunk. So far nobody has died from the exercise, giving the leaders idea of a success. And they have not been stressed to the point of exhausting the central bank's foreign reserve. There is much hope inside Iran and little hope of dissuading it to discontinue its quest for nuclear bomb. When the day is dawn, we shall see Iran with nuclear bomb. Everyone will go on their knees to beg Iran to restrain from destroying the world. The drop in the value of the rial is a mere exercise of safety precautions for the D-day.

by: Q from: Tabriz
October 05, 2012 11:17 PM
Iran still has over $150 billion dollars in reserves which can fund the country’s foreign currency needs for at least 3 years, so the sanctions that started a few months ago can not be the reason for Rial’s fluctuations. The free-market of the foreign currency is actually run and managed by the Iranian central bank, and the size of the free-market / black-market is so insignificant that the central bank can run the speculators into bankruptcy by selling 50-60 million dollars in a single day and then sit and watch the flock running for safety. And this is exactly what they did last year when foreign currency and gold coins lost 25% on the black market in less than an hour, so watch out for the sequel!

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