February 26, 2021
Inflation is continuing to rise and edge closer to 50 percent, far from the Central Bank’s announced goal for this Persian year of holding inflation to 22 percent.
The annual rate of inflation as of the end of the 11th month of the current Persian year, ending February 18, compared with same month last year, reached 48.2 percent, according to the Statistical Center of Iran. That was a full two percentage points up from the previous month, when the rate was 46.2 percent.
Even more worrisome, the rate of inflation for food was a stunning 66.8 percent for the 12-month period. This is the change that is most readily noticed by the public and that most concerns the regime.
The Iranian media tend to give prominence to the other inflation measure, the average rate over the last 12 months rather than the change from 12 months previously. By that measure, annual inflation stood at 34.2 percent, also up two full percentage points from a year earlier.
The current inflation rate is extremely high, both in global terms and in Iranian terms. The only time the rate has topped 50 percent in Iran in recent history was in the three spring months of 2019. Globally, the latest compilation published by the World Bank shows only four countries with higher inflation rates than Iran—Sudan at 51 percent, South Sudan at 188 percent, Venezuela at 255 percent and Argentina where inflation is so high the World Bank is not providing a number.
New check system starts, this one intended not to bounce like last one
The Central Bank has issued a new style and format for personal checks designed to bring to a halt the rage of rubber checks now undermining the economy.
The key change isn’t in the design of the checks but in the requirement that transactions be registered on a new financial platform named Sayyad to assure that funds exist to back up the checks. It appears that the government is in effect making all checks to be issued into certified checks.
The new system will go in effect at Now Ruz.
Sayyad is a system designed to run a credibility check on account holders wanting to write a check.
“Close to 350 million checks circulate in the country worth an estimated 35,000 trillion rials [$145 billion] a year, which is higher than the total money supply,” Central Bank Governor Abdul-Nasser Hemmati said.
The new framework is expected to increase transparency and curb rubber and forged checks. But no one has said how the news system will be paid for. The bank said access to checkbooks will be difficult and the eligibility and credibility of applicants will be verified.
Rules stipulate tougher measures against defaulters. If a check bounces due to insufficient funds, courts are authorized to seize the amount from other assets of the signatory of the check.
Given the significance of checks in today’s economy in Iran, and the soaring problems of bounced checks, rules governing check issuance have been revised seven times in recent years.
The Central Bank said the volume of bounced checks in the Persian month ending December 20 rose almost a third compared to the previous month. Bounced checks amounted to almost 10 percent of all checks written that month and more than 12 percent of the value of all checks written that month.