During the Persian year 2018-2019, Iranian regime President Hassan Rouhani’s government sold $29 billion worth of US currency at the state-set price of 42,000 rials to a variety of governmental institutions or companies and individuals with special connections to the ruling elite to import basic goods and services for the people!
However, a huge share of the $29 billion were used for importing luxurious goods later sold at the rate of 120,000 rials per dollar. All the while, many receiving companies and individuals didn’t even bother to import anything for the cheap dollars and merely deposited their fortunes in foreign banks.
U.S. dollars are sold at two completely different rates in Islamic Republic of Iran. The government sells them at a fixed price of 42,000 Iranian rials, while the fluctuating market price has been somewhere between 120,000 and 150,000 rials over the past six months.
Originally, the lower state-set price is designed to help control the prices of essential goods that are imported into the country and boost domestic manufacturing by importing cheap raw materials. And since the government earns the dollars through selling crude oil, you can say that the difference is paid by Iranian oil exports.
Mohammadreza Pourebrahimi, a member of the regime’s Majlis (parliament), says that $3.5 billion of the aforementioned amount has been deposited in foreign accounts without importing any goods in return.
Abdolnaser Hemmati, director of Iran’s Central Bank, wrote in his Instagram page, “The obstacles and difficulties in the distribution system resulted in a situation that, while the 42,000-rial foreign currency had an initial impact on controlling the prices of basic goods from going into shock, its disadvantages gradually revealed themselves. And while their prices increased, corruption spread and overall prices rose.”
“In fact, dedicating foreign currency at state-set prices for essential goods was not able to prevent prices from rising in the midterm. Therefore, in most cases, subsidies have distanced themselves from consumers, and middle men have occupied the receiving ends,” Hemmati concluded.
Considering the blatant and widespread corruption in distributing the 42,000-rial currency, Hemmati sent a letter to Rouhani. On 29 July, the state-run Tabnak website wrote, “A picture of the Central Bank director’s letter to the President has been published yesterday. The letter shows that 20 companies have received €3.5 billion of foreign currencies at state-set prices and the fate of €1 billion from the original €3.5 billion is still unclear. Among the entities are governmental companies and firms related to dignitaries. In what fields have these companies been active?”
Rouhani adviser Akbar Torkan said on July 31, “We’ve sold the people’s assets for 42,000 rials to a number of middlemen so that they mock us. Those who received these currencies at state-set prices are now mocking us. We sold the people’s assets for the price of 42,000 rials to some middlemen to import power cables and toothpicks and now they’re selling them at 120,000 rials.”
Majlis member Hamdireza Haji Babii sheds even more light on corruption. “Economic bloodsuckers have befallen the country as whole tribes and families, and are easily using the country’s financial assets,” he said.
These days, you can hear the Iranian regime’s apologists and lobbyists on social media and in Western press complaining about how the Trump administration’s energy and banking sanctions have deprived the Iranian population from proper access to healthcare and medicines.
The truth, however, is an entirely different picture.
The regime’s Ministry of Health and Medical Education received $1 billion dollars of cheap foreign currency to import medicine and medical equipment. This money, however, was used to purchase power cables and other electric devices.
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