Although capital flows are favoring…
As the dollar dives and…
Economic sanctions against Iran are really beginning to bite now. Hyperinflation has struck its currency, causing the rial to lose more than half its value against the dollar in the past couple of months.
The falling currency is putting severe pressure on Iranian civilians, which has led to street protests and riots. This week riot police had to fire tear gas at crowds of protestors, and now hundreds of security personnel roam the streets to try and deter any more campaigns.
The inflation, estimated at 29 percent last week, is causing food prices to soar. Milk rose by 9 percent yesterday, and Behrouz Madani, a butcher from northwest Tehran, said that chicken, once a staple of Iranian meals, has doubled in price since last year.
In fact meat has become so expensive that it is generally considered a luxury good now.
“Most of my customers just look at products behind the window and pass,” he said. “I see them going to the next store, which is a bakery, to feed their families with bread.”
Mostafa Daryani, whose family owns a Tehran supermarket chain, remarked that the people “are nervous about tomorrow and next week because they don’t know how much more expensive things will be. They only buy their daily needs and ignore most of the things that are not urgent for daily life. Instead of one bottle of milk, they buy two.”
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com