Proposal to Set Dollar at 35,000 Tomans for 1403 Budget; Ahmad Alavi: It Will Intensify Inflation and Economic Recession

Following the proposal by the Research Center of the Islamic Consultative Assembly to increase the exchange rate for converting oil revenues from 28,500 tomans to 35,000 tomans in next year's budget, an economic expert warned of intensified inflation and economic recession in 1403 if this proposal is implemented. Ahmad Alavi, an economist residing in Sweden, emphasized in an interview with Voice of America that the adverse effects of this action by the Iranian government will confront families with livelihood problems and will cause economic enterprises to face crises in sales and liquidity. On Friday, December 8, the Tasnim news agency reported that the Research Center of the Islamic Consultative Assembly proposed to replace the 28,500 toman exchange rate with the 35,000 toman dollar to increase government revenues for the coming year. According to this report, the exchange rate for providing currency for essential goods in 1403 will also increase following this model. The Iranian Retirees Council wrote that preparations for a 20% increase in the currency for essential goods have begun. Ahmad Alavi told Voice of America that 'in international economic norms, governments usually resort to reducing expenses through disciplinary policies to solve budget deficit problems, which the Iranian government is unable to implement.' Mr. Alavi described the Islamic Republic as a 'rent-seeking government' that is incapable of reducing its expenses to finance its supporters, including repressive forces, affiliated groups, and state media. In recent weeks, remarks by government officials regarding gasoline prices have been interpreted as groundwork for increasing fuel prices in the coming year. Ahmad Alireza Beigi, a member of parliament, cited the low price of 3,000 toman gasoline as a factor in air pollution, while Ebrahim Raisi, the President of the thirteenth government, attributed gasoline subsidies to the late-night drives of the children of influential families, and Ahmad Vahidi, the Minister of Interior, stated that the price of one liter of gasoline is cheaper than one liter of water. Additionally, some experts believe that any manipulation of gasoline prices will lead to increased economic pressures and disrupt political and social relations in Iran. The sudden increase in gasoline prices in Aban 98 led to widespread protests in Iran, during which hundreds of protesters were killed, injured, and arrested by government agents. Reuters reported at that time that about 1,500 protesters were killed and quoted three sources close to the Supreme Leader of the Islamic Republic stating that Ali Khamenei had instructed government and security officials to 'do whatever it takes' to stop the protests.