Source: Fortune
Summary
Iran’s economy is in a severe crisis, with high inflation and a cash liquidity crisis. The government has issued a new 10 million rial note, the largest denomination ever, to address the issue. However, the move has been met with skepticism, as the banking system is considered insolvent and the financial sector is plagued by corruption and mismanagement. The war with the US and Israel has worsened the situation, causing a surge in demand for cash and further straining the financial system.
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The numbers tell one story.
Iran’s central bank issued a 10 million rial note, but the banking system is considered a “closed-loop Ponzi scheme” by some experts. The country’s financial sector is plagued by corruption, mismanagement, and bad loans to politically connected cronies. The war has worsened the situation, causing a surge in demand for cash and further straining the financial system. The regime’s ability to pivot to cash payments is doubted, as there isn’t enough physical currency in the system.
The announcement sounds familiar because it reflects the regime’s desperation to address the crisis without addressing the underlying issues.
Author: Evan Null
