FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com


Join the forum, it's quick and easy

FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com
FINANCIAL CHRONICLE™
Would you like to react to this message? Create an account in a few clicks or log in to continue.
FINANCIAL CHRONICLE™

Encyclopedia of Latest news, reviews, discussions and analysis of stock market and investment opportunities in Sri Lanka

LISTED COMPANIES

Submit Post


ADVERTISE
Poll

EXCHANGE RATE PREDICTION: 2022

 
 
 
 

View results

ශ්‍රී ලංකා මූල්‍ය වංශකථාව - සිංහල
Submit Post


CONATCT US


Send your suggestions and comments

* - required fields

Read FINANCIAL CHRONICLE™ Disclaimer



Latest topics

» We’re seeing a shift toward international and value stocks, says Schwab’s Kleintop
by target1 Today at 2:40 am

» Wall Street stumbles as consumer pessimism stokes growth fears
by target1 Today at 2:34 am

» Free Market Capitalism vs. Crony Capitalism
by target1 Today at 2:30 am

» POSITIVES & TARGETS BY IMTIAZ BUHARDEEN
by ChooBoy Yesterday at 9:30 pm

» Sri Lankan corporations reap large profits as workers and rural toilers face poverty and starvation
by CHRONICLE™ Yesterday at 6:37 pm

» අද රාත්‍රියෙන් පසු, යක්ෂයාගේ හෝරාව ඇරඹේ!
by God Father Yesterday at 6:13 pm

» Derana 360 with Minister Dhammika Perera
by samaritan Yesterday at 1:07 pm

» CENTRAL INDUSTRIES PLC (CIND.N0000)
by LHW Yesterday at 9:24 am

» Breaking News- Kanchana to go to Qatar ; 2 more ministers off to Russia
by Beyondsenses Yesterday at 8:13 am

» PM thanks President Biden for assuring US support to Sri Lanka
by Beyondsenses Yesterday at 8:07 am

» Sri Lanka Stock Market heading toward ASPI 4500
by God Father Mon Jun 27, 2022 9:14 pm

» Why no power cuts in certain areas of Colombo?
by God Father Mon Jun 27, 2022 8:03 pm

» Expolanka to continue its winning streak
by samaritan Mon Jun 27, 2022 9:49 am

» කොළඹ රාජකීය ගොල්ෆ් සමාජය විසින් රජයේ දේපළ අවභාවිත කිරීම
by ddindika Mon Jun 27, 2022 9:33 am

» LOLC to enter the giant Indian Market
by samaritan Mon Jun 27, 2022 9:17 am

» LOLC HOLDINGS PLC (LOLC.N0000)
by CHRONICLE™ Mon Jun 27, 2022 6:46 am

» SOEs within Minimum Programme for Economic Recovery
by CHRONICLE™ Mon Jun 27, 2022 6:44 am

» COVID WAVES: Can there be another Covid-19 wave in Sri Lanka?
by CHRONICLE™ Mon Jun 27, 2022 6:36 am

» Luminex Limited lists on the Diri Savi Board after a capital raise of Rs. 250 Million
by CHRONICLE™ Mon Jun 27, 2022 6:34 am

» Importance of Agroforestry for Sri Lanka
by CHRONICLE™ Mon Jun 27, 2022 6:31 am

EXPERT CHRONICLE™

MARKET CHAT


CHRONICLE™ ANALYTICS


ECONOMIC CHRONICLE

GROSS DOMESTIC PRODUCT (GDP)


CHRONICLE™ YouTube

LATEST TWEETS

You are not connected. Please login or register

FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ » Iran heading for hyperinflation: Steve Hanke

Iran heading for hyperinflation: Steve Hanke

Go down  Message [Page 1 of 1]

Redbulls

Redbulls
Director - Equity Analytics
Director - Equity Analytics

Oct 04, 2012 (LBO) - Iran is heading for hyperinflation with a collapsing Riyal driving up prices above a 50 percent a month threshold, as US led economic sanctions hurt state revenues, a top monetary economist has said.

Steve Hanke, from The Johns Hopkins University in Baltimore estimated that Iran's monthly inflation rate has reached 69.9 percent, based on the latest black market foreign exchange rate.

"With a monthly inflation rate this high (over 50 percent), Iran is undoubtedly experiencing hyperinflation," Hanke wrote in a blog post at Cato@Liberty.org

The Iranian rial officially quoted at around 12,260 to the US dollar by the country's central bank.

Iran's official inflation rate was calculated at 23.5 percent for the month ending August 20, media reports have quoted Parliament Speaker Ali Larijani as saying that the rate was 29 percent.

Like Venezuela, Iran has experienced 20 percent plus inflation even in the past despite being an oil exporter due to weak monetary policy.

Hanke says the black market and official exchange rates began to diverge after July 2010 when President Obama signed the Comprehensive Iran Sanctions, Accountability, and Divestment Act against Iran.

"This decline began to accelerate last month, when Iranians witnessed a dramatic 9.65% drop in the value of the Riyal, over the course of a single weekend (8-10 September 2012)," Hanke writes.

"The free-fall has continued since then."

On October 92, the black-market exchange rate had reached 35,000 Riyals to the US dollar, a 65 percent decline in the currency.

There have been protests in Iran over the sharp fall of the currency.

A country usually heads into hyperinflation when a central bank monetizes large volumes of debt (prints money by purchasing government securities) to maintain state spending when tax revenues fall, especially in times of war to maintain military expenses.

When hyperinflation takes holds for several months accelerating prices push up the costs of running the government even more, unless expenses are cut to reduce the burden of the state on tax paying citizens.

Meanwhile taxes which are paid monthly quarterly or yearly have much less value when they reach the government, a phenomenon known as the Olivera-Tanzi effect.

Declining real taxes, forces even more money printing which results in further currency collapse and more domestic inflation.

People then start to buy up real goods instead of keeping cash to maintain the value of their savings, leading to a loss of confidence in the currency.

Currency reform and freezes in state expenses or dollarization (using a foreign currency or currencies) is needed to stabilize the economy.

Correction - Olivera-Tanzi effect
http://lbo.lk/fullstory.php?nid=848342070

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum