November 29, 2024
The Islamic Republic spent more than $40 billion in the first seven months of the current Persian year subsidizing the rial to make imports (and even some exports) cheaper. More than half of those funds subsidized imports of goods the regime tags as “non-essential.” Only one-fifth of the funds went to subsidize food and medical imports.
Here is a breakdown of the subsidies as announced October 28 by the Central Bank. They total $40.405 billion or about $190 million a day. The largest part came to $21.855 billion for non-essential goods, for which the regime allotted foreign exchaange importers bought on the NIMA currency exchange for 504,450 rials per dollar as of October 28, when the open market rate was 684,500 rials per dollar.
In other words, importers paid 26 percent less than market rate. The next largest block was $8.890 billion allotted to exports, so that exporters could sell them more cheaply. Next came essential imports, mainly food, medicine and medical devices, for which the government provided $8.757 billion at the rate of 285,000 rials per dollar or 58 percent below market rate.
Lastly, the Central Bank provided $903 million to subsidize imports of services, as opposed to goods.
