Security Measures in the Market Have Not Worked; Dollar Replaces Rial in Transactions

The consumer goods market in Iran has recently entered a new phase of transactions, with sellers of goods highly dependent on the dollar gradually replacing cash transactions with dollars instead of rials. An exclusive report from Voice of America from the Tehran market shows that with the increase in currency prices and the creation of a security atmosphere around this market, the dollar continues to be traded near 70,000 tomans, indicating ongoing concerns among small investors. An electronics seller on Republic Street told Voice of America about a complete stagnation in the market, stating, 'The increase in the exchange rate has halted the supply of both foreign and domestic goods.' This seller emphasized that demand in the market has been nearly zero over the past month, and the few transactions that have occurred have been conducted in dollars. According to this seller, over 90% of foreign goods available in the market are smuggled, having entered the country long ago, but with fluctuations in the dollar rate, their supply has been halted. The dollarization of transactions is also evident in other markets, with a trade activist in Amin Hozoor explaining the impact of the dollar rate on the market to Voice of America: 'Domestic producers are also refraining from supplying products to the market due to the increase in the dollar price.' This shopkeeper considered dollar sales as one way to preserve asset value under current conditions, noting that transactions are usually at their lowest in Farvardin (the first month of the Persian calendar), but even these limited transactions are only conducted in dollars. Additionally, the owner of a large and well-known real estate agency in northern Tehran reported the prevalence of dollar rents in District 1 of Tehran, stating, 'Owners of residential units in brand-name buildings are unwilling to sign contracts in rials.' He attributed this phenomenon to the concerns of goods owners and sellers about currency fluctuations and the depreciation of the rial, emphasizing, 'It has become difficult to obtain dollars from the market, which is why my colleagues prefer to receive dollars.' This trend is also present in the mobile market, where a seller told Voice of America, 'The increase in the dollar rate has raised the prices of various mobile phones by up to 20%, and no one is willing to sell goods.' This mobile sector activist pointed out the decrease in demand and the dominance of stagnation in the market, stressing, 'My colleagues try to conduct sales at the real-time dollar rate, but for expensive phones over $800, sales in cash dollars have increased.' Furthermore, a real estate consultant noted that dollar contracts have significantly increased since Mehr of last year, with owners even unwilling to sign rial contracts at the cost of leaving their properties vacant. He mentioned a new rental method that has emerged, where landlords receive a year's rent at the beginning of the year at the daily dollar rate but in rials all at once, to protect themselves from future fluctuations by converting it to dollars. The replacement of the dollar with the rial in various markets occurs while Ali Khamenei emphasized in Farvardin 1402 the need to reduce the government's role in the economy and move away from the dollar, stating, 'One of the problems of our economy is dependence on the dollar. Some countries that have been sanctioned have cut their dependence on the dollar, and their situation improved; we must do the same.' However, today, a year after Khamenei's request to Ebrahim Raisi's government, the dollar is becoming the common currency in market transactions, further entrenching Iran's economy in dependence on it. The lack of a clear outlook for the economic and political future in Iran, the Islamic Republic's foreign policy, the nature of economic governance, and the presence of inexperienced individuals in key economic ministries and parliament are among the factors causing public concern and their efforts to preserve their assets in the form of dollars or gold.