Wednesday, September 19, 2012

The Iranian government eliminate exchange subsidy for airlines

Photo credit:, unkown

last updated at 11:52 EDT, Tuesday, 18 September 2012
قطع ارز دولتی شرکتهای هواپیمایی ایران

According to ISNA, The Iranian government is going to eliminate the discounted exchange rate, of 12,260 rial for the dollar, currently offered to the Iranian airlines this week. Abdul Reza Musavi, the head of the head of the Iranian airlines association, told ISNA that the airline industry is in "shock", and predicted that the airline industry is at risk of collapse without the government exchange subsidy.

Interestingly the ISNA website published this news only on its Persian version, and the English version was censored (was not able to find it despite my best effort).

In light of the recent injection of dollars into the exchange market by the Iranian central bank in response to political pressure, this new event demonstrates the possibility that the central bank is running out of forign currency to sustain even the most important subsidies, like that of the airlines.


Anonymous said...

The main aim of this ignorant fascist theocratic regime is the destruction of Iran and of Iranian soul.
They will not succeed in their endeavors.

Anonymous said...

As Khomeini once said that he wished he could build a wall around Iran to stop Western influence from infiltrating the country.
Looks like his wishes are coming true after all.Because the way things are going,there will only be donkeys left to transport people out of the country.

Anonymous said...

Anon 9:06 AM

Oh please! Give it a rest.

Anonymous said...

Irabian government stop to provide cheap fuel to the cars and foods. and founf approval from the world bank and iwf.

if they donot subsid the food why the must subsiud the air lines ?

Anonymous said...

Anon 1:56 PM

"Oh please! Give it a rest."

There is no rest against the wicked!

Unknown said...

@anon 4:25
Good point but the issue here is actually a little different.

The Iranian Government had just recently announced the three tier exchange system which is outside its original plans to cut subsidies.
Eliminating the airlines from the preferred exchange tier is a major change in plans. It shows lack of liquidity more than anything else.

In addition when things like this happen unexpectedly, they raise concern about how well the regime is able to plan ahead. They are clearly flying by the seat of their pants, economically sppeaking.