Iran's Economy Minister: We will not have 4,200 Tomans for other goods except medicine and bread

Iran's Minister of Economic Affairs and Finance says that in the country's 1401 budget, "apart from medicine and bread, we will not have 4,200 tomans for other goods."

Speaking on a television program on Sunday, December 18, Ehsan Khandozi added that "with the cooperation of the government and the parliament," in the coming months, "we will not see 4,200 tomans in the 1401 budget for importing livestock inputs and items of this kind."

Last week, it was announced that, despite warnings about increasing economic pressures on the people if the "preferential" currency is eliminated, the government of Ebrahim Raisi has sent the 1401 (2022) budget bill to the parliament with the elimination of the 4,200,000-toman currency.

Currently, six basic commodities, including wheat, barley, corn, soybeans, crude oil, and oilseeds, along with some medicines and medical equipment, receive 4,200 tomans in exchange.

The Minister of Economy and Finance's statements on Sunday regarding the elimination of preferential currency for livestock inputs come at a time when the director of the country's Light Livestock Union had said in early October, referring to a 50 percent decrease in meat consumption in Iran, that per capita meat consumption in Iran had dropped from 12 kilograms per year to six kilograms.

The mandatory choice of 4,200 Tomans for one US dollar in the spring of 2018 was one of the most controversial decisions of the 12th government headed by Hassan Rouhani. It was a decision made in response to the surge in the free currency following former US President Donald Trump's unilateral withdrawal from the JCPOA.

The aim of this plan was to support vulnerable groups by controlling the prices of basic goods, livestock inputs, medicines, and medical equipment so that they reach the end consumer at a price that matches the purchasing power of the middle and lower classes.

The 4,200-toman currency was allocated to import basic goods to control the price of these goods, but the 12th government gradually removed many goods from the list of goods that received this currency, and this action caused the price of those goods to rise.

Ebrahim Raisi, who sent a bill to parliament in mid-November to eliminate the preferential currency, defended the government's move by calling the state currency a catalyst for "corruption" and "rent," and said that "its benefits have gone into the pockets of a few brokers and have not appeared on people's tables."

However, critics of Mr. Raisi's approach, including economist and university professor Hossein Raghfar, believe that this measure will increase inflation and put additional pressure on the people.

In another part of his speech on Sunday, Iran's Minister of Economic Affairs and Finance said that he considers the existence of this preferential currency for most basic goods to be an "inefficient approach."

Critics have repeatedly warned against the elimination of the preferential currency, and Majid Reza Hariri, head of the Iran-China Joint Chamber of Commerce, also warned in mid-November about the emergence of "hyperinflation" and the sharp rise in the price of goods, stating that the Iranian economy is at "the most dangerous historical point of inflation in the last four decades."

As inflation and commodity prices have increased in recent years, the Ministry of Cooperatives announced last month that one in three Iranians lives in "absolute poverty."

According to the Statistical Center of Iran, the annual inflation rate in November was 44.4 percent, and based on official statistics from the Ministry of Labor, the average price of more than 83 percent of food items in Iran has exceeded the crisis level.

Source: Radio Farda