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Iranians anxious as inflation soars after Khamenei rejects US talks

Maryam Sinaiee
Maryam Sinaiee

Iran International

Feb 12, 2025, 07:57 GMT+0Updated: 09:25 GMT+0
Curbside open market trading of dollar in Tehran
Curbside open market trading of dollar in Tehran

The rapid depreciation of Iran's national currency in recent weeks amid fading prospects of direct talks with the US has deeply unsettled many Iranians who face ruin in their daily lives and businesses.

Concerns over further devaluation of the rial are troubling not only ordinary citizens facing soaring prices for essentials like food, housing, and medicine but also producers reliant on imported raw materials.

“As a manufacturer, I must say I can no longer continue production under these circumstances,” Kambiz Ghasemi Jokar, a manufacturer of protective film, posted on X on February 9. He assured customers he would fulfill existing orders but lamented that maintaining his business was no longer viable given the uncertainty.

The rapid fall of the Iranian currency has fueled fears of hyperinflation. “A dollar at 900,000 rials means the destruction of the middle class, civil servants, retirees, and renters, while corruption increases,” Narges Molaei, an Iranian X user.

To reassure the public, Central Bank of Iran’s Economic Deputy Mohammad Shirijan told the Iranian Labour News Agency (ILNA) on Tuesday that inflationary effects from rising forex rates would be minimized.

However, inflation expectations have spiked since late December, when the dollar stood at around 760,000 rials, and especially after Supreme Leader Ali Khamenei’s speech last week rejecting talks with the U.S.

With the Iranian New Year approaching (March 20), demand for imported goods which need foreign currency is increasing, likely pushing rates even higher.

The price of gold has surged alongside the dollar, as many rush to convert savings into gold. Reports circulating online, which have not been verified by Iran International, suggest authorities have restricted bank accounts of forex exchanges and gold traders on Tuesday to curb further price hikes.

“They’ve locked the market—there have been virtually no transactions today,” a gold trader claimed on X. The reports also indicated that curbside forex dealers on Tehran’s Ferdowsi Street, the country’s foreign exchange hub, were intimidated into halting trades.

On Monday, February 10—the anniversary of the Islamic Revolution and a public holiday—citizens reported the rial had fallen to around 940,000 per dollar in the open market.

On Tuesday, state-linked media such as Tasnim News Agency claimed the rate had dropped below 900,000 but social media posts suggested otherwise, with some online forex platforms still reporting rates above 910,000.

The Tehran Stock Exchange (TSE) also reacted to the uncertainties and the looming danger of maximum pressure sanctions on Tuesday with a 1.32 percent drop in its index.

Economic expert Dalga Khatinoglu told Iran International that exchange rates often spike after political shocks—such as Khamenei’s speech or Iran’s recent missile attacks on Israel—but stabilize afterward, though never returning to previous levels.

He also said Iran’s oil revenue has declined, as exports dropped from 1.9 million barrels per day (bpd) in September to around 1.4 million bpd. Meanwhile, US sanctions on 45 oil tankers have increased transportation costs, further restricting Iran’s access to foreign currency.

Ultra-hardliners blame the relatively moderate government—particularly Economy Minister Abdolnaser Hemmati—for the economic turmoil including the chaos in the forex market.

On Tuesday, nearly 90 lawmakers submitted a motion to impeach Hemmati, which has now been referred to Parliament’s Economic Committee for review.

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Iranian capital hit by sudden power outages

Feb 11, 2025, 20:08 GMT+0

Unannounced power cuts hit several parts of Tehran on Tuesday evening amid a deepening energy crisis that is forcing the government to shut down all schools, universities and public offices on Wednesday.

Electricity was cut off in several Tehran neighborhoods including Narmak, Tehranpars, Pasdaran, Shahrak-e Gharb and the capital's central districts due to the state's "inability to supply gas and diesel for power plants," state media reported.

According to Iran’s state electricity company Tavanir, the blackouts were caused by cold weather, increased household gas consumption, and limitations in gas supply and transmission to power plants.

The company said the outages were necessary to maintain network stability.

Iranian media reported that the power cuts also led to internet disruptions and heavy traffic congestion in some parts of the city due to malfunctioning traffic lights.

"Shortly after the power cut in Sohrevardi (a street in northeastern Tehran), slogans were being chanted in the entire alley," Iranian journalist Bahman Daroshafaei tweeted, apparently referring to anti-government slogans.

Similar outages were also reported in Karaj, a city in western Tehran.

Since November, electricity distribution companies in Tehran and other provinces have been announcing rolling blackouts for residential and commercial areas as a government strategy to conserve fuel and reduce reliance on mazut, a pollutant-heavy oil, as power plants struggle to meet demand.

Iran’s energy infrastructure is grappling with one of its most challenging winters. Facing a critical natural gas shortage, President Masoud Pezeshkian’s administration has prioritized avoiding the widespread burning of mazut, or high-sulfur fuel oil, as a substitute at major power plants in cities like Arak, Isfahan, and Karaj.

With around 80% of Iran’s electricity derived from thermal power plants reliant on gas, the administration faces mounting pressure to address systemic fuel shortages.

Iran’s winter energy crisis highlighted the country’s reliance on emergency measures, as officials grapple with a resource shortage exacerbated by decades of underinvestment. With blackouts set to continue, questions over energy policy and sustainability linger.

Iran president hails dialogue after backing Khamenei's rejection of US talks

Feb 11, 2025, 17:13 GMT+0

Iran seeks peace and dialogue with the world, President Masoud Pezeshkian said Tuesday in guarded remarks which contrast with his endorsement the previous day of Ali Khamenei's opposition to talks with US President Donald Trump.

"Global peace and security can only be realized through connection, friendship, and sincerity—not through aggression, murder, massacres, expulsion, or discrimination. We must create a foundation for human interaction," said Pezeshkian, a relative moderate.

The remarks at a tourism exposition in Tehran referenced the devastation of Gaza in a 15-month incursion by Israel, which is backed by Iran's arch-foe the United States.

"We are not the ones seeking war. We are brothers with our neighbors, and we approach the world with dialogue and peace. It is those who wield power, stockpile weapons of mass destruction, and fuel wars and bloodshed—not us.”

His comments came one day after he threw his weight behind Khamenei's opposition to dialogue with the United States, saying the Supreme Leader "has the final say" on negotiations.

Pezeshkian's speech followed a wave of critical statements from Iranian officials against the idea of US talks after Trump mooted a deal over Iran's disputed nuclear program but reimposed harsh sanctions from his first term.

Earlier this month, Supreme Leader Ali Khamenei made ambivalent comments about the prospect of negotiations, which initially pleased Pezeshkian’s supporters.

But after some hardliners doubled down on their opposition, Khamenei expressly rejected the idea, saying talks "would not be wise, intelligent or honorable".

His criticism of talks set the stage for a renewed political battle within Iran, pitting hardliners against Pezeshkian’s government and its reform-minded allies who see dialogue with the US as the key to lift sanctions which have marred Iran's economy.

The tough stance of the Supreme Leader, the ultimate decision-maker on matters of state, was echoed by hardline media outlets linked to the clerical-military establishment who saw in the president's reticence an endorsement of Khamenei.

Hossein Shariatmadari, the firebrand editor of Kayhan newspaper, praised a similarly non-committal speech by Pezeshkian at a rally earlier this week commemorating Iran's Islamic Revolution.

"One of the outstanding features of this year's rallies was the intelligent and defiant speech by Dr. Masoud Pezeshkian, our esteemed President."

An editorial in Javan praised the address, highlighting not only his nearly 20 references to Khamenei’s leadership and his words as the final authority but also his clarification that “the US is not truly seeking negotiations in the first place, making the debate over whether to negotiate with Trump irrelevant.”

But Jomhouri-e Eslami, a conservative Iranian newspaper, ran an editorial criticizing the silencing of those who opposed Khamenei’s stance on negotiations.

According to the Constitution, the paper argued, individuals have the right to express opinions freely even if they disagree with the Supreme Leader.

"The people's right to express their opinions does not contradict the rights of the Leader, and it should not be assumed that just because the Leader holds a view on a particular issue, no one else has the right to express their own opinion on the matter," wrote Masih Mohajeri, the editor.

Opponents of talks, he continued, “allow themselves to deny the most fundamental Islamic and human rights of the people and label those who seek to express their opinions on various issues as traitors, ignorant, or agents of foreign powers.”

Vigilante rallies fuel debate on Iran’s free assembly double standards

Feb 11, 2025, 10:55 GMT+0
•
Maryam Sinaiee

Recent rallies organized by vigilantes outside the Iranian Parliament and in the religious city of Mashhad have sparked criticism over the state's selective enforcement of freedom of assembly.

Held outside the Parliament on Sunday, the latest such rally featured chants against President Masoud Pezeshkian and members of his administration, particularly his strategic deputy, Javad Zarif, whom the vigilantes demanded be removed from office.

Known as the “People of the Party of God” (Ummat-e hezbollah), vigilante groups in Iran are closely aligned with ultra-hardliner factions such as the Paydari Party and the Basij militia of the Islamic Revolutionary Guards (IRGC). The Paydari Party has close ties to former nuclear negotiator Saeed Jalili, whom they supported in the snap presidential elections after the death of incumbent President Ebrahim Raisi in a helicopter crash on May 19.

Critics argue that authorities provide these groups privileges denied to other political organizations.

The moderate conservative Fararu news website criticized the rally, noting in a report on Monday that the freedom of assembly granted to these vigilantes is particularly striking.

“Freedom of speech [and assembly] is a blessed thing and an understandable [right] but only when it exists for all activists,” the piece on the site read.

Vigilantes protesting outside the Parliament on Sunday

Their protests also targeted Chief Justice Gholamhossein Mohseni-Ejei and Parliament Speaker Mohammad-Bagher Ghalibaf, accusing them of failing to enforce stricter hijab regulations and tighter internet filtering.

In their most recent rallies, these vigilantes, who have significantly dwindled in number in recent years, continued to demand a missile strike against Israel in response to its October attack on Iran's military facilities.

While the Iranian constitution guarantees the right to peaceful assembly under Article 27—requiring gatherings to be unarmed and in accordance with Islamic principles—political parties and groups are still prohibited from freely assembling in public spaces.

Female vigilantes protesting outside the Parliament for hijab enforcement on January 11

Assembly permits are often denied to most political groups, effectively suppressing their protests. In contrast, vigilante groups are allowed to hold rallies freely, without authorization, and often accuse rival political figures of treason or insufficient religious piety.

Unlike vigilantes, activists and citizens who attempt to hold rallies or protests are typically met with harsh dispersal or arrest by police and security forces for "illegal assembly."

In December, an Interior Ministry official warned ultra-hardliners and their affiliated vigilante groups of serious consequences if they continued to disrupt societal harmony with their protests against the President's new, more progressive policies.

On Sunday, the Ministry's Director General for Political Affairs reiterated the need for rally permits, but as in previous instances, no action has been taken against the vigilantes' illegal demonstrations in recent days.

Despite their shrinking numbers—Sunday’s rally reportedly attracted fewer than 100 participants—vigilante gatherings continue to garner significant media attention.

Speeches at the rally included one by Morteza Agha-Tehrani, a member of the Central Council of the Paydari (Steadfastness) Party and a member of Parliament's Cultural Committee.

Agha-Tehrani said that enforcing the hijab law shelved for the time being by the Supreme National Security Council (SNSC) to avoid unrest, would ultimately “bring security.”

Iranian parliament says US talks not forbidden but harmful

Feb 11, 2025, 09:25 GMT+0

The National Security and Foreign Policy Committee of Iran’s Parliament said that while negotiation remains a valid diplomatic tool, talks with the United States have consistently harmed Iranian interests.

“Negotiation with the US is not prohibited but has proven irrational and damaging,” the committee said, referencing past engagements with Washington.

It pointed to the 2015 nuclear deal, or JCPOA, as an example, listing extensive commitments Iran undertook—ranging from reducing enriched uranium stockpiles to converting nuclear facilities—while saying the US failed to deliver on sanctions relief.

Instead, sanctions increased, culminating in the Trump administration’s withdrawal from the deal in 2018, the statement added.

The commission said that engaging with the US has eroded trust, citing recent sanctions for Iran's support of regional militant groups, domestic human rights abuses and support for Russia's war on Ukraine.

They described the US as a “hostile and arrogant regime.” A member of the commission said, “Negotiating with such entities brings no rational benefits; it only deepens the damage.”

It echoes the messaging from the country's Supreme Leader Ali Khamenei, who, during a recent Friday address, said, “Negotiations with the United States have no impact on solving the country’s problems.”

His remarks come as divisions emerge among Iranian officials regarding potential talks on a new nuclear agreement. While some figures, like President Masoud Pezeshkian, have expressed openness to renewed discussions, Khamenei dismissed the idea, emphasizing self-reliance over external agreements.

Iran’s economy has suffered significant setbacks since the reinstatement of US sanctions in 2018. The national currency has devalued by 95%, inflation has remained at around 40% for five years, and over a third of the population now lives below the poverty line.

However, the committee stressed that these challenges should be addressed by fostering domestic production and strengthening ties with regional allies, rather than pursuing dialogue with an “untrustworthy adversary.”

Trump’s threats and economic pressure rattle Iranian officials

Feb 11, 2025, 08:10 GMT+0
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Behrouz Turani

In Tehran, recent speeches and statements reveal Iranian officials are on edge over the intensifying war of words between US President Donald Trump and Supreme Leader Ali Khamenei.

As Iran’s financial and economic situation deteriorates following Trump’s decision to intensify sanctions, officials seem increasingly worried about potential unrest.

In less than a week, the rial has lost nearly 10 percent of its value.

Statements from Vice President Mohammad-Reza Aref and several military commanders reflect growing anxiety.

“Those with ill intentions might be sowing discord between the people and the government of Iran,” Aref warned, urging the government to start listening to the public.

As night fell on February 9, the eve of the 1979 Revolution’s anniversary, chants of “Death to the Islamic Republic” and “Death to Khamenei” echoed through Tehran and other cities, as people took advantage of the darkness and fireworks.

The slogans echoed the same demands Iranians voices during the nationwide 2022 anti-state protests, underscoring ongoing public dissent in the country.

On February 10, the Entekhab website published a lengthy statement from the Islamic Revolutionary Guard (IRGC), warning against "dangerous bi-polar situations" that could arise as some officials continue advocating for negotiations with the US to address the country’s economic crisis.

Meanwhile, the IRGC boasted that Iran has become a global power striving to establish an Islamic civilization. It warned state officials to be wary of “the cognitive war waged by enemies to undermine Iran’s international standing.” The statement also accused Trump of exaggerating his disputes with the Islamic Republic and making excessive demands to influence potential negotiations.

Calling the US "a terrorist regime," the IRGC warned that, following Khamenei's guidance, Iran would deliver a harsh response to any American miscalculation.

Recent tensions and exchanges between Tehran and Washington seem to have also shifted President Masoud Pezeshkian's rhetoric, aligning it more closely with Khamenei’s hardline stance.

Pezeshkian, who had previously advocated for dialogue with the United States, escalated his tone on Monday, saying, "Trump first threatens Iran's existence and then calls for talks with Tehran. Trump wants to deprive Iran of medicine, food, and water." Pezeshkian’s claims resembled statements by hardliner media accusing Trump of making outrageous demands.

On the same day, Parliament Speaker Mohammad Bagher Ghalibaf intensified what appeared to be a disinformation campaign against Trump by misrepresenting the contents of his recent executive memorandum on tougher sanctions. "Trump wants to disarm Iran," he said.

Several officials and politicians falsely claimed that Trump intends to hand over the three disputed Persian Gulf islands to the United Arab Emirates.

Former Iranian diplomat Kourosh Ahmadi, meanwhile, criticized the spread of misinformation about Trump’s executive memorandum.

“A wave of sheer lies is being spread about the contents of Trump’s executive memorandum. One such falsehood was promoted by Mr. Ghalibaf. Unfortunately, even some well-informed individuals have been misled into believing that Trump signed a document on disarming Iran,” Jamaran News quoted him as saying.