Iran has appointed Abdolnasser Hemmati as the new governor of its central bank following a period of intense economic crisis and widespread protests. The country has been knocked by extreme inflation and a currency that is losing value on a daily basis. These civil rights violations have led to waves of national protests and civil unrest.
Hemmati has deep experience for his new role at the helm. During this earlier administration, he had been the Minister of Economic and Financial Affairs under Pezeshkian. His short-term agenda aims to do just that, starting with taming inflation—which is now above 40%. Third, he wants to prop up the Iranian rial, which has depreciated dramatically against the US dollar. On Wednesday, the dollar was selling for 1.38 million rials, up from only 430,000 rials in late September of last year.
The recent economic crisis has been the catalyst for violent protests throughout the country. Peaceful demonstrators soon became inflamed by repression as they used justifiable and spontaneous anger over such a rapidly deteriorating economic situation to break through police lines. During one such event, mobs stormed the governor’s offices, leaving three police officers seriously injured. Iranian authorities have confirmed the arrest of four protesters in the southern city of Fasa.
Hemmati’s appointment comes at a pivotal time. Recent leveling off, or even increases, in the price of gasoline alone is sure to raise the inflation rate further. This latest economic calamity is a direct product of the federal government’s extreme mismanagement of banks. Now, Hemmati has to actually face these demons in the flesh.
We cannot understand these shifts without recalling the continuing tensions from Western sanctions imposed over Iran’s nuclear activities. The 2015 nuclear agreement ended most international sanctions on Iran in return for tight restrictions on the country’s nuclear program. The United States’ exit from the deal set off a cascade of reinstated sanctions. Electronically cut off So far, the upshot of these sanctions has been extreme pressure on the Iranian economy.
Iran’s Prosecutor General, Mohammad Movahedi Azad, issued a stark warning regarding the protests, stating, “Any effort to turn protests over economic issues to insecurity, damage to public properties or carrying out foreign scenarios, will face…strong reaction.”
As Hemmati takes on his new role, he has an uphill battle ahead in stabilizing Iran’s beleaguered economy and restoring public confidence. These next few weeks will be pivotal. They will signal whether his underwhelming strategies are sufficient to calm the persistent storm and quell an angry public.
