Teaching Comparative Government and Politics

Wednesday, June 23, 2010

No more sacks of money

Will the economic analysts please step forward and tell us how significant this is? It's an obvious sign of political trouble for the Iranian government.

Iran doubles highest banknote amid inflation fears
Iran has doubled the denomination of its highest banknote to 100,000 rials ($10, £6.50), its Central Bank Governor Mahmoud Bahmani has announced…

The move has been prompted by high inflation, although official figures say the rate has fallen to 10% from a peak of 29% in 2008…

Kamran Dadkhah, an associate economics professor at Boston's Northeastern University, said "astronomical" inflation in Iran in recent years had necessitated the new notes.

"They have to print notes in larger denominations, otherwise people will have to take a sack of them to buy a sandwich," he told Bloomberg Businessweek magazine…

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