by Navid Felker
The central bank of Iran has banned the sale of foreign currencies at exchange bureaus – effectively shutting down the industry – and will no longer provide cash to the companies.
Mohammad Ali Karimi, head of public relations for Central Bank, said on April 13 that these guidelines would “redefine” the role of exchange bureaus and that the Regime would potentially use them as “mediators” in interactions between Iranian banks and foreign banks.
This nonsensical arrangement was decided by the Regime after the Iranian rial fell to an all-time low of 60,000 rials to the US dollar earlier in the month.
The Regime first responded by artificially fixing the exchange rate at 42,000 rials to the dollar, arresting several money changers who were selling them at the actual rate, and threatening to execute them to send a message.
On April 11, two days after the currency was artificially fixed, Ayatollah Nasser Makarem Shirazi said: “In order to teach a lesson, we should execute, according to Islamic rules, a few foreign exchange traders who try to plunge the country into chaos.”
Now, the Central Bank is planning to buy the dollar back from exchangers at the artificial rate, but the problem is that no one is willing to sell at the rate as it would cause them to lose a substantial amount of money.
What is wrong with the Iranian economy?
Well, the rial has been steadily dropping in value since the Regime took power in 1979 and there is a definite causation there. The corrupt Iranian Regime plunders much of the country’s wealth into either the personal bank accounts of the mullahs or into Iran’s malign military adventures in the Middle East, particularly the funding of terrorist groups like Hamas and Hezbollah.
This makes the international community put sanctions on Iran, which in turn make foreign companies less likely to invest in Iran. Few companies want to prop up the world’s leading state sponsor of terrorism.
Speaking of sanctions, let’s discuss the likelihood that Donald Trump will withdraw from the Joint Comprehensive Plan of Action (JCPOA), otherwise known as the Iran nuclear deal.
Back in January, Trump vowed to pull out of the deal if flaws were not fixed. These flaws are far from fixed and Trump has spent the past month stocking his cabinet with people who are tough on Iran. It’s fairly safe to say that the US will exit the deal on May 12.
This will hurt the Regime by cutting off funding for their suppressive security forces and allowing the Iranian people to stand up against the Regime more effectively and achieve regime change from within.