Mahiar Ramadan Khani, a macroeconomic analyst, warned about the possibility of inflation entering the triple-digit range in Iran, citing the pressure of sanctions, currency supply issues, and declining oil sales. He also predicted that the dollar rate would range between 280,000 to 300,000 tomans by the end of the year.
Consequences of Currency Rate Increase on Iran's Economy
Ramadan Khani examined the effects of the currency rate increase on Iran's economy, particularly regarding production input costs. According to him, in various sectors such as food, medicine, and construction, which rely on imports, the rise in currency rates directly leads to an increase in production costs and ultimately inflation.
Read more: Seyed Ismail Hosseini: Challenges of Electricity Supply in Winter and Energy Imbalance
This macroeconomic analyst attributed the increase in currency rates to the simultaneous intensification of several factors, stating: "The pressure of sanctions, maritime blockade, and the loss of the UAE channel have made it difficult for the government to supply and allocate currency." He also referred to the decline in oil sales, explaining that the drop in oil revenues puts more pressure on the country's currency resources.
Currency Rate and Inflation Difference Between Iran and the USA
Regarding the currency rate and the inflation difference between Iran and the USA, Ramadan Khani said: "One method of calculating the currency rate is based on the inflation difference between the two countries." He pointed out the assumption of 89.9% inflation in Iran and 3.4% in the USA, stating that if the currency rate is calculated solely based on this formula, the price of the dollar should be around 270,000 tomans.
This analyst emphasized the need to pay attention to the trend of economic variables in the coming months, stating: "If these conditions are not controlled by November, inflation may enter the triple-digit range." He predicted that if the current trend continues, the dollar rate could reach about 285,000 tomans by the end of the year.
Ramadan Khani also expressed hope for international agreements to be reached, stating that he does not consider the continuation of war as his outlook. He emphasized that not all inflation in Iran's economy is due to the increase in currency rates, and other factors also play a role in this trend.
He identified budget imbalance, rising costs in the global economy, oil prices, and the performance of the banking system as other influential factors on inflation. Ramadan Khani regarded the currency rate as one of the five main factors of inflation, stating that despite the role of other factors, the weight of the currency rate among these factors is greater.
He also warned that intensified pressures from the USA could push the dollar rate above 300,000 tomans. Regarding the potential impact of an agreement on the currency market, he mentioned that if an agreement is reached, there is a possibility for the dollar rate to return below 200,000 tomans.
However, he emphasized that a decrease in the currency rate after an agreement does not necessarily mean stabilization at that level, and the status of inflation, liquidity, foreign revenues, and other economic variables will still be influential.
Ramadan Khani discussed the central bank's ability to control the currency market, stating that complete information about currency reserves and oil revenues is not publicly available, and some of this information is confidential. He deemed the central bank's intervention and management of the floating currency market as necessary under current conditions, stating that the central bank has announced that it has prepared 2 billion dollars for intervention in the market.
He warned against a severe and artificial decrease in the currency rate, stating that lowering the currency rate without economic backing could increase capital outflow and subsequently create new demand, paving the way for another surge in the currency rate. Ultimately, Ramadan Khani emphasized that the central bank must strive to keep the currency rate below 230,000 tomans.
Read more: Fuel reserves of power plants are favorable ahead of winter · The UK Maritime Trade Operations Agency reported the pursuit of an oil tanker in eastern Aden
