BAKU, Azerbaijan, January 13. One of the main reasons for years of devaluation in Iran and the loss of value of the Iranian rial against foreign currencies is the deficit in the state budget, Mohammad Reza Najafimanesh, member of the Tehran Chamber of Commerce, Industry, Mines and Agriculture, told local media, Trend reports.
According to Najafimanesh, for many years, the Iranian government has been compelled to rely on banks for foreign currency due to persistent deficits in the state budget.
He explained that this dependency inevitably leads to an increase in the country’s liquidity, which has been steadily rising over the years, surpassing 130 quadrillion rials (approximately $130 billion) at present.
“There is a fundamental principle: when the volume of a product is multiplied by its price, the result is the total liquidity. In Iran’s case, as liquidity continues to expand, without a corresponding increase in the volume of goods, the price of products rises. This inflationary effect is not limited to a few products but impacts the entire economy,” he noted.
The protests that erupted in late December were primarily driven by the rapid depreciation of the national currency, escalating inflation, and other pressing economic challenges. While reports of casualties have circulated, the precise figures remain unverified.
In recent months, the Iranian rial has experienced a sharp decline in value against foreign currencies. On the black market, one U.S. dollar is now valued at 1.45 million rials, and one euro at 1.7 million rials.
Stay up-to-date with more news on Trend News Agency's WhatsApp channel