To: energyplay who wrote (17540 ) 4/22/2007 3:19:24 PM From: elmatador Respond to If "inflation set to hit 24%. Money supply growth -- a key indication of future price trends -- is seen at a colossal 42%"In the past year, Iran’s revenues from oil export reached the historical sum of over 60 billion US Dollars, which was injected by Mr. Ahmadi Nezhad into the regime’s economic veins, without having any plan and programme, rejecting even the fourth development plans on the pretext that it had been drawn on patterns from the World Bank and International Monetary Fund. despite inflation at about 24 per cent, the exchange rate of its money has been kept stable: In Iran today, the exchange rate of Rial to Euro or to Dollar is almost the same as it was two of three years ago. Why? because the Central Bank of Iran, leaning on the oil dollars, has kept the rate of the local money artificially at fix parity with major world currencies and this while inflation is about 24 per cent in Iran against 3 per cent in the US and 1.5 to 2 per cent in Europe. One of the reasons of this situation is to prevent social explosion. In other word, if in effect Iran keeps its currency at its real value, you obviously can not buy the dollar at the present rate of exchange of 923, 924 or 925 Toumans; you can not buy Euro at 1.250 Toumans. The rate of Euro and Dollar would shoot up, at one Euro to more than 2.000 to 2.500 Toumans. In such an event, not only imports would become more expensive, but the inflation would jump to over 4o per cent. Everything is artificial in Iran. The question is this: for the time being, thanks to high oil prices and thanks to oil dollars, the government can afford subsidizing. But what when oil prices drops. What will happen to the subsidies; to the... Iran Must Reform Its Economy Or Face Social Explosion iran-press-service.com
