Tehran, Iran – Life has become normal in a way in the capital of Iran.
Markets, cafes and shops are opening their doors, and some highways are once again buzzing with traffic as a fragile ceasefire with the United States largely holds after weeks of devastating US-Israeli attacks.
Still, customers are cautious.
“Standing in a store, most things are still available, but now many times, there is a question whether you want something or need it,” said a young resident of western Tehran, speaking on condition of anonymity.
“Many people are now resorting to buying only the basics.”
Amid concerns about future increases and changing purchasing habits, the government is moving to ensure the availability of food and medicines in an effort to ease the growing pressure of the war on the Iranian people.
On Sunday, the Cabinet added a clause in the implementation guidelines of the annual budget to resume preferential exchange rates for imports of essential commodities like wheat, medicines, medical equipment and infant formula.
This means the government plans to give up to $3.5 billion from its share of oil and gas earnings to a network of trustees to import essential goods. According to state media, these imports will be purchased at the official exchange rate of 285,000 riyals per US dollar – significantly lower than the open market rate of 1.55 million riyals per dollar, and also lower than the budget rate of 1.23 million riyals.
The move signals a partial change in government policy from the budget proposed in late December, when demonstrations by shopkeepers in Tehran escalated into nationwide anti-government demonstrations.
In that budget, there was a demand to eliminate the cheapest currency rate. The argument at the time was that the subsidized rate virtually created a non-transparent system that fostered corruption without meaningfully reducing prices for average Iranians for years.
But on Sunday, a deputy at the Ministry of Cooperatives, Labor and Social Welfare told state television that the price of essential goods had been “significantly affected” by the abolition of the cheap currency rate.
Yaghoub Andayesh said the ministry has presented different scenarios to the government to “guarantee food security” across 11 categories of essential commodities whose prices have risen sharply in recent months, but declined to give exact figures on price increases.
In addition to reintroducing a cheaper exchange rate, the government is evaluating whether it could increase the volume of monthly handouts and electronic coupons to Iranians to partially offset one of the highest food inflation rates in the world, the official said. Everyone is currently eligible for the equivalent of less than $10 a month.
Withdrawal from sovereign fund
Iranian officials are also using the sanctions-hit country’s sovereign wealth fund to buy essential goods, the latest such move in recent years.
State media reported on Sunday that up to $1 billion would be withdrawn from Iran’s National Development Fund for the purchase of imported sugar, rice, barley, corn, soybean meal, red meat and chicken meat, aimed at “supplementing strategic reserves.”
Officials have said the country has substantial currency and gold reserves and that some oil sales made to circumvent U.S. sanctions have been redirected into the fund, but they have not provided any details.
On Sunday, state television said that despite the US blockade of Iran’s ports and the bombing of its oil and gas facilities, the country’s main challenge is not increasing production or trying to get supertankers out of the Strait of Hormuz.
“The main challenge is to bring empty tankers to the fields of Kharg and Jask to load the extracted oil,” said one presenter.
The Tasnim news agency, which is linked to the Islamic Revolutionary Guard Corps, acknowledged on Saturday that some people are concerned about food security in the wake of the war launched by the US and Israel on February 28.
But it said it would not be “realistic” to think that Iran could face famine as a result of a US blockade because it has vast borders with neighbors such as Iraq, Turkey and Pakistan through which imports could be facilitated.
State television even suggested that police and border forces might stop taking action against smuggling routes if there was a shortage of goods in markets.
‘Incredible’
The government has also increased the executive power of the governors of Iran’s border provinces to promote the import of essential goods with less red tape.
Pezeshkian told state media on Saturday, without elaborating, that the government had officially been notified of the expanded powers, but that governors would have to demonstrate “initiative and creativity” to meet additional needs during the war.
And on Sunday, Iran’s Food and Drug Administration announced it would begin “centralized distribution of strategic goods” to the medical sector in two days. It said the goal was to ensure that medical facilities had “fair and timely” access to strategic reserves and to minimize procurement challenges.
Still, fears remain about shortage of goods. Some people have started stockpiling canned goods and storing water. To reduce expenses, they are also canceling trips and recreational activities, and stopping going to restaurants and ordering food online.
“This is unbelievable,” a user named Hadi wrote on
Some Iranians who are getting online from inside the country during a near-complete internet shutdown imposed by the state have either been issued government-approved connections or are paying exorbitant amounts to purchase virtual private networks or engaging in other fraudulent practices.
Millions of jobs have been put on hold, and many thousands of workers have been furloughed or furloughed as a direct result of the unprecedented internet shutdown that lasted nearly two months, as well as the bombing of vital civilian and economic infrastructure such as steel plants.
But while officials have insisted they will rebuild Iran’s infrastructure, they have said the internet shutdown will remain in place throughout the war and have expanded a tiered internet-access system the people have opposed for years.
Iran’s nursing organization on Sunday became the first entity to officially reject the “Internet Pro” service being sold by Iranian authorities on the grounds that it turns a basic right into a paid privilege.
“When all people in Iran are provided access to the global Internet, nurses will use it like the rest of us,” the organization said.
