Free Fall of National Currency Value; Texas University Professor: The Real Dollar Rate in Iran Should Be 85,000 Tomans

A Texas university economics professor stated in an interview with Voice of America that "according to the theory of purchasing power parity," Iran's national currency will continue to fall, and the price of each US dollar in the market will reach 85,000 tomans. Siamak Javadi, a financial economics instructor and researcher, elaborated on this view, noting: "Currently, the inflation rate in the US is 3.2%, while inflation in Iran is around 47%. Based on this and considering the purchasing power parity theory, the national currency is doomed to fall by another 45%, which rejects the current figure of 64,000 tomans for each dollar and determines its real rate to be around 85,000 tomans." He also attributed the lack of inflation control and unregulated money creation to the policies of the Islamic Republic, emphasizing that post-revolution governments have always benefited from uncontrolled inflation as it effectively devalues their debts despite the existence of bankrupt banks. In response to the rising dollar price, Mohammad Reza Farzin, the head of the Central Bank, claimed that the current rate is temporary and stated: "This price will decrease because we do not consider the rates of unofficial channels and markets. We provide all legal goods' currency, and the unofficial market rate reflects the trade of smuggled goods and capital flight." Economist Morteza Afghah reacted to Farzin's comments and the "non-recognition of the free currency market," stating: "The Central Bank's president has to make such statements. These comments have become repetitive and ridiculous. When the currency price in the free market is this high, and consequently, the prices of goods change, talking about a bubble is meaningless and outdated." He added that "currently, the influential economic variables are beyond the capacity and authority of the country's officials and decision-makers," stating that economic policymakers can only control the situation if they have sufficient currency at their disposal, which is currently very low. A member of the Islamic Consultative Assembly also mentioned on April 21 that the dollar has become "uncontrolled," stating: "Currently, the price of this foreign currency has surpassed 64,000 tomans, and I believe it could reach 80,000 tomans by the end of the year, and in a pessimistic scenario, it may even reach 100,000 tomans." Zabihullah Azimi Sardoui added: "All of this is in the government's hands" and that "the Central Bank, Ministry of Economy, Finance, and the Presidency must solve the problem." Hassan Mansour noted that the government and the semi-private sector benefit from the increase in the dollar price in Iran, warning about the possibility of a 100,000 toman dollar and "systematic corruption" larger than the tea trade. Protests over living conditions continue, with gatherings of nurses and telecommunications retirees, workers' strikes, and ongoing farmers' sit-ins. The currency market is on an upward trajectory; the dollar has experienced a record of 65,000 tomans.