An on the ground report by the Associated Press details the disastrous effects of the Iranian rial's continuing slide as it hit a record low starting Wednesday: residents in Tehran are frantically lining up outside money changing offices, diapers and many basic staples have disappeared from store shelves, and hard currency only is being demanded even to book an airline ticket.
The rial has this week plummeted 140 percent since the United States withdrew from the Iran nuclear deal a mere four months ago in May.
Local and international reports indicate that on Wednesday the national currency began trading at over 150,000 rials to $1USD in the currency exchange shops of Tehran.
As the AP reports, "Those who went to work at the start of the Iranian week on Saturday saw their money shed a quarter of its value by the time they left the office on Wednesday." There's a sense of nervousness and panic in the air according to the report, with a rush to find black market money changers on the streets, even though state media has yet to acknowledge just how low the true value of the rial has fallen.
Meanwhile Iran's top leadership continues to lash out at Washington for stripping common citizens of their daily needs. In a speech over the past weekend Iran's supreme leader Ayatollah Ali Khamenei, condemned the US sanctions as economic "sabotage" while making specific mention of diaper shortage.
"Imagine that in Tehran or other major cities, baby diapers suddenly become scarce. This is happening, this is real, this is not make-believe. Baby diapers!" Khamenei said, according to the official state transcript. "This makes people angry. On the other side, the enemy wants people to be angry with the government and system. This is one of their ways."
Domestic diaper companies rely on some 70% imported raw material to produce their diapers. Purchasing the material from abroad while the rial simultaneously crashes has left over ten diaper producers on the verge of bankruptcy.
Middle East news and analysis site Al-Monitor details the crisis, which is being echoed across multiple other major industries which in the past could be relied on to supply lower and middle class families with cheap products:
Iran's diaper needs are met by both imports and domestic manufacturers.
The recent increase in prices has been blamed on the devaluation of the national currency as well as hoarding by some distributors of imported brands. Union leaders also say a lack of raw materials has led to a production halt at several diaper factories in the country. "At least 10 Iranian diaper producers are on the verge of bankruptcy," Seyyed Hossein Dokmehchi told Iran Labor News Agency.
Adding to manufacturer's woes is the fact that when the bulk of such raw materials get stuck in customs offices, companies must deal in official rates of the Central Bank of Iran.
As Al-Monitor explains, Iranian manufacturing companies now lose the moment they import the goods:
They had registered their orders based on the official exchange rate of 42,000 rials per dollar, per recent directives issued by the Central Bank of Iran for essential goods. Now the importers are required to pay a margin calculated on a secondary rate for the importation of non-essential goods. That rate stands at around 90,000 rials per dollar, far higher than the rate extended to prioritized imports, but lower than the open market of around 14,000 rials per greenback.
Meanwhile on the streets of Tehran money-change office began shuttering their shops once the rial began reaching upward of 150,000 to the dollar.
Those that have remained open are requiring citizens to show airline tickets for travel abroad as proof the foreign currency is for travel.
Parliament has reportedly been considering a plan to distribute subsidized goods to meet Iranians' basic needs, with lawmakers announcing they've allocated $13 billion for commodities and medicine and a further $6 billion to help the poor.
As quoted by the AP, budget head Mohammad Bagher Nobakht lamented of what's to come, describing a future of "long queues in front of the shops, like money exchange houses, that can create an ugly scene in the city alleys and streets." But it appears Tehran is already deep in the midst of this, and such scenes will only get worse.