CBI Governor Mahmoud Bahmani

Thu, 06 Aug 2009 12:29:05 GMT
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CBI Governor Mahmoud Bahmani
The Central Bank of Iran (CBI) says the annual rate of inflation on a point-to-point basis has slipped down to 14 percent form 29.5.

"The point-to-point inflation which had reached 29.5 percent last September has now [in July] dropped to 13.9 or 14 percent," CBI Governor Mahmoud Bahmani said on Thursday.

This is while CBI declared in early July that the inflation rate in the country over the twelve months ending May 22 had dropped to 22.5 percent.

The statement by the bank was based on a review of prices of 359 goods and services in Iran's urban areas.

The review showed a 1.8 percent increase in the prices for May over the previous month.

Bahmani also said that a 15 percent plunge in the rate of inflation is a record for Iran in comparison to other countries.

He went on to say the decline had come after the CBI took measures to organize monetary and credit institutes. Bahmani did not explain the nature of the adopted measures by the CBI.

This comes as President Mahmoud Ahmadinejad's economic policy is one of the areas where he came under heavy criticism by his three former rival candidates in the June presidential debates.

While the Iranian president cited the country's inflation rate for the month of May to stand at 12 percent, his rivals accused him of 'distortion of facts' claiming that the inflation rate stood at 25 percent.

DB/HGH
http://www.presstv.ir/detail.aspx?id=102695&sectionid=351020102

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And all of this controversy circles me
And it seems like the media immediately points a finger at me
So I point one back at 'em
But not the index or the pinky or the ring or the thumb
It's the one you put up when you don't give a ****
When you won't just put up with the bull**** they pull
Cause they full of **** too

It's obviously bullsh1t... The regime thinks they can calm things down in Iran by claiming the economy is getting better when in reality it's worse than ever.

There's absolutely no future in the islamic repub as long as the islamists are in power.... It's just gonna get worse and worse til it reaches a state that matches Afghanistan.

But hey, what can you expect when you have mullahs in charge who put terrorist groups and Palestinians first instead of their own people and country.

The only way to go right now is a revolution or a huge change in office.

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"A drowning man is not troubled by rain" Persian Proverb



"You should not be afraid of the ideology but of the determination and will of the men behind it"

AUGUST 6, 2009

Tehran Struggles to Defend Currency

By MARGARET COKER and ROSHANAK TAGHAVI

DUBAI -- Iranian economists are predicting double-digit currency depreciation by year-end, amid expectations that already high levels of capital flight will increase over fears about Iran's economic direction.

The government has managed to keep depreciation mostly under 5% a year since 2001, despite the U.S.-led sanctions that limit trade with and imports to the Islamic Republic. But economic problems snowballed after President Mahmoud Ahmadinejad took office in 2005. His lavish spending plans and subsidized loan programs to government insiders have exacerbated inflation and decreased currency reserves.

As the president begins his new term, anecdotal evidence shows that the central bank is battling to defend the currency at official exchange rates as more Iranians look to move their wealth to safer places.

A steep drop in Iran's currency would be a heavy blow to Mr. Ahmadinejad, who is already facing rifts among the country's ruling elite and battling to quash widespread public outcry over his controversial June 12 re-election.

Tehran has limited access to international credit markets because of the sanctions. Monetary policy is facilitated by currency deals conducted through a network of 50 Iranian-run money-exchange dealers inside the Islamic Republic, the wider Middle East and Europe. Members of this exchange network say the government is selling $180 million to $250 million daily to keep the exchange rate steady within the 9,700 to 9,900 rial-to-dollar corridor set by the central bank.


That spending exceeds the amount of revenue the country is taking in from the 2.4 million barrels of oil exported daily -- the country's only major source of foreign currency. Oil prices this year are averaging $60 a barrel. Unless that price strengthens to at least a consistent $70 a barrel, the rial could fall as much as 15% by December, according to a former Iranian central-bank official.

A government adviser disputes the claim, saying Tehran has the tools necessary to keep the rial stable.

"Ahmadinejad's government has so far followed a simple policy that they will not devalue the currency. There will be serious budgetary pressures, but they will go through austerity measures first, not emergency measures," said the adviser.

Iran doesn't release official economic statistics in a timely fashion. The last official estimate of its foreign reserves published in mid-2008 showed $80 billion in central-bank coffers. Iranian economists say that figure has dropped approximately 25% in the past year, as oil prices have fallen, but the government hasn't cut its $290 billion budget that runs through March 2010.

Unlike other Gulf oil producers, Iran has failed to parlay its oil wealth into a well-endowed rainy-day fund, leaving it vulnerable to new economic challenges such as depreciation.

Even ordinary Iranians without ties outside the country are hedging their bets by turning in rials for hard currency. A 29-year-old Tehran taxi driver said that immediately after the election he exchanged $5,000 worth of rials into dollars. "Things are going to get worse, so I'm waiting for the right time to change the rest of my savings," he said.

Write to Margaret Coker at margaret.coker@wsj.com and Roshanak Taghavi at Roshanak.Taghavi@dowjones.com

http://online.wsj.com/article/SB124951839472809583.html#