Iran’s currency crisis: what the rial does (and does not) tell us
The recent nationwide protests in Iran are the result of an accumulation of grievances, increasingly focused on what is commonly described as the “loss of value of the national currency.” This phrase is a familiar everyday lament among Iranians, who often equate the value of the rial—measured in U.S. dollars—with living standards. In doing so, they typically focus on the free-market exchange rate. Although this is a narrow market, it produces the most dramatic signal. The bulk of foreign exchange transactions take place at lower rates, but access to them is limited. The free-market rate, now around 1.3 million rials per dollar and averaging just under one million in the past month (see the blue line in Figure 1, left axis), is roughly 100 times its level when Obama-era sanctions took effect in late 2011.
(more…)Rethinking CPI, Food Prices, and Living Standards in Iran
A comment from an informed reader prompted me to re-examine my earlier post on living standards in 2024/25. The issue raised was whether it is adequate—or even accurate—to deflate household expenditures with the overall CPI, as reported by the Statistical Center of Iran (SCI), while ignoring the fact that food prices have risen faster than average prices.
(more…)The US-Israel war on Iran revives inflation fears
Kudos to the Statistical Center of Iran for not missing last month’s inflation report (Khordad = 21 May-20 June), despite the destruction caused by the Israeli bombing of Tehran. The attack struck at the heart of Tehran, a few blocks from SCI’s main building. Significantly, for those who habitually question Iran’s official statistics, the report is not flattering.
(more…)Trump’s return shocks Iran’s currency and prices
With Trump’s return to power, Iran is bracing for another round of maximum pressure. The rial has already fallen by one-third in the unofficial free market since last November, when his victory was announced. As before, the sharp devaluation has quickly translated into higher prices and rising social tensions.
(more…)Good economic news fails to impress Iranians as they go to the polls
Two pieces of positive economic news were published last week, continued economic growth last fall and lower inflation for the Iranian month of Bahman that ended on February 20. You would think that days before the elections for the parliament and the Assembly of Experts on March 1, they would attract attention and scrutiny. But in Iran public opinion about the economy and elections have moved beyond facts and data. Public opinion because people dismiss official news about the economy as propaganda, and elections because, thanks to heavy vetting, only one side appears to have a chance of occupying the most seats in the two assemblies.
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Tyranny of numbers 
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