Iran’s new monetary policy is setting the stage for another disaster
After much haggling between the executive and the legislative branches, the Iranian regime’s Majlis (parliament), approved the government’s plan to remove the “42,000-rial dollar” exchange rate, also referred to as the “preferential currency,” in the budget of the upcoming Persian calendar year (starting on March 20).
The decision was met with alarm from state-run media and the regime’s own officials, who are warning that the new monetary policy will have an immediate negative impact on the economy, and reduce the people’s purchasing power, many of whom are already struggling to make ends meet.
The regime’s plan is to subsidize the price of goods by distributing electronic coupons for the affected goods. But given the mafia-run structure of Iran’s economy, with most levers being in the control of the Revolutionary Guards, experts are warning that coupons will eventually create a new black market not much different from that caused by the preferential currency. Regime-backed entities will continue to make profits while the needy will be deprived of the subsidies they need.
The main factor that has delayed the regime’s decision to implement the new monetary policy is the social impact and the implications it can have for the regime.