0545 GMT: Tuesday was distinguished by an episode of economic fantasy. As economists inside Iran warned of rising inflation, as most trade in foreign exchange and news of that trade was suspended, as the President's subsidy cuts programme was formally buried by Parliament, the International Monetary Fund put out a report that all would be well in Iran in a few months.
The IMF has put out fantastic projects on Iran before, notably in Summer 2011, but this one --- like its predecessors, "researched" by conversations with Government agencies --- emerges at a time when even leading officials have warned that Iran is in a state of "war" comparable to the 8-year battle with Iraq in the 1980s. No surprise, then, that State media --- skipping over the one dose of reality in the IMF report, a note of Iran's first contraction in GDP since 1994 --- cheered that the Fund has hailed Tehran's progress despite sanctions.
Open-market rates for the Iranian Rial, not just against the US dollar but against all foreign currencies, are still suspended, while reports indicate that there is almost no trade at official exchanges. We will be watching the Central Bank's "trade room" for importers, set up two weeks ago to provide foreign currency --- yesterday Fars signalled that US dollars were not being sold. Given the certainty that those dollars are still being demanded, the likely explanation is that the Bank is having problems drawing from foreign reserves to maintain supply.
Posted via email from lissping
No comments:
Post a Comment
Note: only a member of this blog may post a comment.