Government Delays Subsidy Reforms
Oil Prices have also continued their downward trend, with Brent crude trading at $70 a barrel. Between the loss in export levels after oil sanctions went into effect in 2012, and the recent drop in oil prices, Iran’s oil export revenues, its main foreign currency source, are a third of what they were only two years ago.
Meantime, Rouhani administration on Saturday decided to delay planned subsidy reforms. The government probably regards the subsidy cuts as politically inconvenient, expecting backlash. The decision to delay, however, will put added pressure on the value of rial and could reverse recent gains in the fight against inflation. These are indeed challenging times for the Iranian economy.