Iran's Currency Rises Slightly After Dollar Injection Into Market
Iran’s currency has recuperated some of its recent losses, as the government asked exporters to share their dollar revenues with currency exchange dealers.
Iran’s currency has recuperated some of its recent losses, as the government asked exporters to share their dollar revenues with currency exchange dealers.
The Iranian currency, rial, on Sunday fell to a historic low of 333,000 to one US dollar, a 25-percent fall since March. The slide seemed unstoppable as the rial was losing around 10,000 points a day last week, but since early Tuesday, the currency began to gradually regain some ground.
Iranian media reported on Tuesday that the government asked exporters, especially petrochemical companies, to sell their foreign-earned dollars directly to currency exchange dealers to stop the rials fall. This helped the Iranian currency to rise slightly, to just under 320,000 against the dollar.
But the government’s tactic has two major drawbacks. First, it seems to be an emergency measure and exporters will not agree to perpetually sell their dollars at a rate considered to be untenable on the long run. Second, the foreign currency that exporters bring back to the country is also needed by the government and the central bank, to finance needed imports and to maintain dollar reserves.
The precipitous fall of the rial has added to a sense of panic among a vast majority of Iranians who have become impoverished by persistently above-40-percent inflation for nearly two years. Anti-government protests have been taking place regularly since early May.
The pace of events led many to believe that Abdolmaleki was told to resign under pressure from the media and the parliament as weeks of protests of protests by pensioners and teachers across the country threatened political stability.
Some of the government's critics including reformist commentator Abbas Abdi wrote a June 14 tweet that "Removing Abdolmaleki from his post was a positive step by Raisi and his move should be supported."
For months, politicians, experts and many in parliament were asking Raisi to fire some of his ministers who seemed too weak to deal with a worsening economic crisis.
Like many other Raisi ministers and aides, Mohammad Hadi Zahedi Vafa the caretaker who is likely to be introduced to the parliament as the Minister of Labor is also a graduate of the ideologically notorious Imam Sadeq University and a member of ultraconservative Paydari Party. He is also close to Raisi's adviser Saeed Jalili, an unwavering Shiite ideologue.
In terms of his ideological and political loyalties Zahedi does not bring any change of direction to the ministry, beyond some tweaking with pension and salary numbers. The crux of the matter is that the government is not able to control inflation and people’s incomes have shrunk by more than 25 percent just since March.
Until Tuesday morning, Zahedi was a deputy to Vice President Mohammad Mokhber, coordinating economic supervision and infrastructure affairs. When Raisi was first introducing his ministers to parliament last September, Zahedi was Mokhber’s and Jalili's choice for the minister of economy, but Raisi appointed Ehsan Khandouzi.
He was also a candidate for the chairmanship of Iran's government owned Central Insurance Company, but again he did not get the job. At the time, Zahedi was working at the Center for the Iranian-Islamic Model for Progress. The center's mission based on an order issued by Supreme Leader Ali Khamenei is to make Iran the epicenter of Islamic civilization by 2065.
The Labor Ministry will remain under the control of Paydari Party and the Imam Sadeq Alumni gang. Zahedi, 59, studied at Imam Sadeq University in the field of Islamic Knowledge. He went to Canada in 2001 where he received a Ph.D. in economics from Ottawa University and dedicated his dissertation to Prophet Mohammed’s daughter Zahra.
Immediately after returning from Canada, he was appointed as dean of the faculties of Islamic Knowledge and Economics at Imam Sadeq University and kept the position until 2015. According to records filed at the Center for the Iranian-Islamic Model for Progress, he speaks English and Arabic.
Zahedi was a deputy minister of economy under President Ahmadinejad from 2005 to 2009 but there are no records of his activities in the government after 2009. There are references that he was an aide to Jalili at the Supreme Council of National Security and a member of the nuclear negotiating team. Meanwhile he supported Jalili in the 2013 presidential election and wrote his economic plan.
Following Abdolmaleki's resignation and Zahedi's appointment, Abdolhossein Rouholamini, a lawmaker for Tehran said that at least another two or three ministers should resign before they are fired or impeached, so that the government and the parliament could focus on dealing with the current economic crisis.