{"id":268663,"date":"2023-01-07T22:57:37","date_gmt":"2023-01-07T21:57:37","guid":{"rendered":"https:\/\/www.ncr-iran.org\/en\/?p=268663"},"modified":"2023-01-28T20:27:39","modified_gmt":"2023-01-28T19:27:39","slug":"irans-economic-bankruptcy-another-aspect-of-khamenei-and-raisis-failure","status":"publish","type":"post","link":"https:\/\/www.ncr-iran.org\/en\/news\/economy\/irans-economic-bankruptcy-another-aspect-of-khamenei-and-raisis-failure\/","title":{"rendered":"Iran\u2019s Economic Bankruptcy, Another Aspect of Khamenei, and Raisi\u2019s Failure\u00a0\u00a0"},"content":{"rendered":"

\"iran-economy-down-30032021\"<\/p>\n

According to state TV on January 4, the Iranian regime\u2019s parliament allowed Ebrahim Raisi\u2019s government to \u201cSell government bonds worth 200 trillion tomans, to fortify the water and electricity sectors.\u201d\u00a0<\/span>\u00a0<\/span><\/p>\n

Fifty trillion rials of this sum will be allocated to electricity, and 150 trillion rials will be transferred to the Ministry of Energy and Tavanir company. Thus, government-affiliated contractors receive bonds instead of their long-overdue payments.\u00a0 Based on the current dollar exchange rate, Raisi\u2019s administration will sell roughly $500 million worth of government bonds.\u00a0<\/span>\u00a0<\/span><\/p>\n

A government bond is a form of bond issued by the administration to support public spending. It includes a commitment to pay periodic interest, aka coupon payments, and to repay value on the maturity rate. This could help a nation with a solid economy to overcome a budgetary crisis<\/a> temporarily. But this is not the case in Iran under the clerical regime, with its economy in shatters.\u00a0<\/span>\u00a0<\/span><\/p>\n

Issuing government bonds in a country like Iran with an unstable economy results in default. Since Tehran lacks enough foreign currency and the national currency is highly devalued, the government must borrow funds from the central bank. This means more banknote printing, which would further plunge the rial\u2019s value. It will also increase the country\u2019s liquidity, and due to the exceptionally low production rate, inflation will skyrocket more. <\/span>\u00a0<\/span><\/p>\n

Raisi has claimed many times that his government, unlike his predecessor Hassan Rouhani<\/a>, would not allow banknote printing. But the economic indicators tell differently. The rapid devaluation of the rial alone calls out Raisi\u2019s bogus claims.\u00a0<\/span>\u00a0<\/span><\/p>\n

On May 8, 2022, Abdolnasser Hemmati, the former chief of Iran\u2019s Central Bank, aka \u201cking of banknote printing,\u201d said: \u201cRaisi\u2019s government has broken the record of printing bank notes. According to the Central Bank\u2019s statistical report of 2021, Raisi\u2019s government printed 1.4 quadrillion rials, earning them the title of \u2018supreme sultan\u2019 of banknote printing.\u201d\u00a0<\/span>\u00a0<\/span><\/p>\n

On December 20, Hemmati admitted amid the regime\u2019s infighting that Raisi\u2019s administration has printed 1.2 quadrillion rials of banknotes, three times more than his predecessor in 2020.\u00a0<\/span>\u00a0<\/span><\/p>\n

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Iran\u2019s currency (rial) and economy are on the verge of another crisis<\/div><\/div>
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