Potential Surge in Dollar Price; A Director of the Parliament Research Center: Factors Increasing Currency Prices Remain Active

The head of the Monetary and Financial Group at the Islamic Consultative Assembly Research Center in Iran has reported an imminent surge in currency rates in the market, stating that "factors increasing currency prices remain active." Mehdi Darabi attributed the stability of currency rates this year to increased oil exports and foreign currency openings, emphasizing that "one can expect this stability in currency prices to continue until mid-next year." From Darabi's perspective, the stability of currency prices is not a positive sign, as the currency rate trend in Iran has always been upward. According to this monetary and financial manager, issues such as "government budget deficit, banking imbalance, pension fund imbalance, energy imbalance," and similar problems need to be resolved. These statements, considering the government's targeting in the next year's budget regarding currency prices, indicate that the government is also preparing for a new round of fluctuations in this market. Accordingly, in the 1403 budget bill, the euro has replaced the dollar, and the exchange rate for each euro has been set at 31,000 tomans, whereas in last year's budget, it was proposed at 23,000 tomans and approved at 25,000 tomans. Some economists believe that the dollar price will stabilize above 50,000 tomans this year and will begin a slow and steady upward trend in the last days of the year. Thus, it can be expected that the average dollar price next year will be around 60,000 tomans. Analysts believe this will significantly impact the rising prices of goods and services in Iran and could return inflation to around 50 percent. Another issue whose consequences will be visible in household welfare and, more importantly, people's livelihoods is the increase in the currency rate of essential goods, as the head of the Planning and Budget Organization stated that in the "Seventh Plan," it has been mandated that over five years, the currency supply rate for essential goods should approach the exchange rate. The Islamic Republic is seeking to eliminate the dollar from its economy, although economists consider this action "impossible" or "very unlikely," citing the oil-based nature of Iran's economy. However, Ali Khamenei has mandated the government to carry out this task, and the government is also pursuing the realization of this "order." In this context, the basis of the 1403 budget has shifted from the dollar to the euro, which experts believe is a "superficial change" and will not have a significant impact, as Iran currently does not have good relations with eurozone countries.