In 2018, the exchange rate was set at 4,200 Tomans, while the free market rate was around 5,000 Tomans, with a price difference of nearly 20 percent. In 2022, the exchange rate was set at 24,000 Tomans, while the free market rate was around 28,000 Tomans, with another difference of nearly 20 percent.
In the current situation, there is again a difference of nearly 20 percent between the official and free market rates. Therefore, the biggest problem is that the policymaker is not willing to let go of this price difference. On the other hand, if the exchange rate is set to float and the creation of an artificial gap between the rates is prevented, the situation will improve significantly. In this case, the trustees will return the currency and the merchants will act with greater awareness and transparency regarding market conditions.
