Iranian Currency broke 7000 toman for 1 US Dollar

[like_a_boss]

1 dollar = 112000 rial

 

[Persian Gulf 1906]

What does Iran need ? from World ? nothing

They have water
They have food
They have oil
They have Car manufacturing already 100% local
They have Banks who now will deal with China / Russia and Pakistan
Own space program
Own Schools and Research programs

Ironic you talk about Iran having water given water scarcity is the single biggest issue facing Iran today (and will be for the foreseeable future)...

Basic foods (such as wheat/rice) are still imported in large quantities.

Iran still lacks the technology to properly utilise its gas/oil reserves for domestic use.

Car manufacturing is a joke, they are mostly death traps and production is falling.

The banks are saddled with bad debts and nobody wants to deal with them, even the EIB said they don't want to follow the European Commission's proposals to deal with Iran.

Space program is cancelled.

20m Iranians are homeless.

Lets not lie to ourselves.

 

[Skull and Bones]

It's time for India and Iran to start trading in local currencies and commodities.

 

[timmy_area51]

 

[Umair Nawaz]

You mean Pakistan’s Persian gulf Masters?

Pakistan is wholly owned and influenced by House of Saud and China. With China building a naval base in Pakistan, you have effectively traded your soverigenty to two countries in exchange for security and survival.

We should now Welcome Pakistan to the Banana Country Club.

kid China aint building any naval base in Pakistan, its actually Pakistan herself which is building it.
Anyway would love to be Chinese Naval ships parked n stationed in our soil in future in permanent basis.

If we can give America our airbases and land routs to Afghanistan both in Cold war era and post 2001, why not China, who is our loyal friend that too for the protection of Pakistan from American navy in Gulf and Indian Navy who already has logistical agreements with Americans. Kill 2 birds with one stone.

Works 4 us just fine!!

 

[Śakra]

Ironic you talk about Iran having water given water scarcity is the single biggest issue facing Iran today (and will be for the foreseeable future)...

Basic foods (such as wheat/rice) are still imported in large quantities.

Iran still lacks the technology to properly utilise its gas/oil reserves for domestic use.

Car manufacturing is a joke, they are mostly death traps and production is falling.

The banks are saddled with bad debts and nobody wants to deal with them, even the EIB said they don't want to follow the European Commission's proposals to deal with Iran.

Space program is cancelled.

20m Iranians are homeless.

Lets not lie to ourselves.

Water issues yet iran is the leading producer of pistachios, a nut that requires a huge amount of water.

 

[rcrmj]

Partially. There is a lack of confidence/demand in the Rial due to economic and political uncertainties (of which high inflation is a huge factor).

If the Rial is falling, what it basically means is that people are selling Rials and buying foreign currencies (dollar/euro/etc.) So there is a low demand for Rials and a high demand for foreign currencies.

The Iranian government can shore up the exchange rate by buying Rials and selling foreign currency denominated assets. But that is expensive and it will drain the foreign currency reserves quickly.

They can also raise interest rates to attract investment in Iran (which will increase demand for Rials) but that will negatively impact economic growth. Also, foreign investors are being scared away by the risk of sanctions.

there is no country can turn the tide if it does not look into basic human nature, facing the reality, focusing on manufacture, spending on public education````a religious centric and oil dependent Iran has no future, I know they are not our enemy, but it is the saf fact

Partially. There is a lack of confidence/demand in the Rial due to economic and political uncertainties (of which high inflation is a huge factor).

If the Rial is falling, what it basically means is that people are selling Rials and buying foreign currencies (dollar/euro/etc.) So there is a low demand for Rials and a high demand for foreign currencies.

The Iranian government can shore up the exchange rate by buying Rials and selling foreign currency denominated assets. But that is expensive and it will drain the foreign currency reserves quickly.

They can also raise interest rates to attract investment in Iran (which will increase demand for Rials) but that will negatively impact economic growth. Also, foreign investors are being scared away by the risk of sanctions.

there is no country can turn the tide if it does not look into basic human nature, facing the reality, focusing on manufacture, spending on public education````a religious centric and oil dependent Iran has no future, I know they are not our enemy, but it is the saf fact

 

[Persian Gulf 1906]

Water issues yet iran is the leading producer of pistachios, a nut that requires a huge amount of water.

Is that supposed to be a contradiction? It is precisely because of Iran's insane and inefficient use of water in agriculture etc that Iran has such a big water problem.

there is no country can turn the tide if it does not look into basic human nature, facing the reality, focusing on manufacture, spending on public education````a religious centric and oil dependent Iran has no future, I know they are not our enemy, but it is the saf fact

Iran is not as oil dependent as the Persian Gulf kingdoms and has survived far worse than this, but yes big changes are needed because Iran deserves to thrive not just survive.

 

[TheImmortal]

Toman hit 12,000 to 1 USD dollar today

 

[Persian Gulf 1906]

Toman hit 12,000 to 1 USD dollar today

Terrible. Once the first wave of sanctions hit what will happen? Then the second wave? This is not sustainable...

 

[Skull and Bones]

Here's a take on how Bulgaria stabilized it's currency from a hyperinflation back in 1997.

http://www.imf.org/external/pubs/ft/fandd/1999/09/gulde.htm

 

[Asian.Century]

I buy 1$ burger and that so expensive in Iranian equals to 7000 toman, oh man.

 

[Dexon]

I buy 1$ burger and that so expensive in Iranian equals to 7000 toman, oh man.

I know the doctor in our city. Which has a daily income of 40 million ...
And 7000 toman for the burger is very low ...
https://www.delino.com/restaurant/baberburger-satarkhan

 

[Hack-Hook]

I buy 1$ burger and that so expensive in Iranian equals to 7000 toman, oh man.

In Iran a good burger cost you even up to three time that price

I know the doctor in our city. Which has a daily income of 40 million ...
And 7000 toman for the burger is very low ...
https://www.delino.com/restaurant/baberburger-satarkhan

not all doctors have that income , in fact you can count them with the finger of your hand , as a matter of fact a doctor he is employed and won't work for himself , can expect an hourly wage of 25000-30000 Toman per hours it means right now 2$-2.5$ per hours.

 

[Arminkh]

Terrible. Once the first wave of sanctions hit what will happen? Then the second wave? This is not sustainable...

Not much. You need to look at this from economic perspective. What you see right now is the result of panic in the market.

Consider USD as a good next to rest of the goods like milk, sugar, bread and etc. Now imagine government announces we are going to ban the sale of sugar in three months. What will happen is that two groups of people will rush to buy sugar beyond their actual need: 1 - The group that need sugar for their business or daily consumption. 2 - Group that actually doesn't need sugar but knows the price of the sugar will go up and likes to make a benefit and "ride the wave"

This panic will result in a demand much larger than society's actual demand and will spiral the price of sugar up and with it any other goods that depend on sugar like cookies, chocolate and etc. However, it can only go up to the point that the actual users of the sugar would be willing to buy it. So it will eventually stop at some point either before or after the 3 month deadline.

Now when the ban on sales of sugar is implemented and hopefully it is effective enough to completely stop the supply of sugar, then the only source of sugar will be the inventory of those groups that bought it like crazy. meaning sugar becomes scarcer and scarcer in the society. However, the price has already reached the point of saturation and nobody can afford to pay any higher for it. At the same time another thing will happen: people will start to change their behaviour (use no sugar) or find alternative sweeteners (like Date's extract) which will drive the demand down. At some point the price of sugar in black market will stabilize due to diminishing supply and demand. And it may even get to a point that the alternative sweeteners totally replace sugar and the life will continue.

Hyper inflation will only happen if: 1- You supply the society with more and more money to buy more expensive sugar and 2- There is sugar to buy.

This scenario will happen to any non-essential good. I agree USD is a much more important good with a much more far reaching effect on the market but the fact is it can be replaced or in other words it is non-essential. We need USD to buy things we need from international market. The government will still supply the local market with essential goods like wheat, meat and etc through barter or alternative currency agreements. Luxury products will no longer be imported and yes, people will no longer be able to do recreational trips to Europe and elsewhere. But life will go on.

Many of you are probably too young to have seen the war era. Back then, the USD started to spiral out of control from 7 Tomans to 70 Tomans and then higher in the black market. However, it stabilized at some point as people changed their behaviour and supply and demand balanced themselves. Western and luxury goods were rarity and almost everything were built domestically, travel abroad was a very rare thing and people spent their holidays together with their families or in other Iranian cities. Not everybody had a car which helped the air stay clean. Government supplied industries with their internationally sourced raw material either through subsidized Dollar or directly. I lived through it and it was not bad at all. Families were closer and local industries were stronger. Overall it was a healthier and simpler life in my opinion and I don't recall people dying out of hunger.

Right now Iran is in a much better position compared to the war era: We have lots of educated people who can run our industries and production in the absence of international competition. We have a much larger economy and country is much more wealthier compared to then and we have a world that is sympathetic towards us and is willing to help as far as it can.

Iran should grab this opportunity and get rid of reliance on USD once and for all.