“We have to show that there is an alternative, and we are in the conditions to prove that”.īut Arauz warned that Latin American unity must come quickly: “We cannot be facing this geopolitical moment, basically a world war, as 33 independent, small republics this has to be faced as a Latin American bloc. “This is a historic moment for humanity”, he argued.
So I think that’s how it will end up working also in the monetary sphere”. “The society of the 21st century has to be a society of blocs, of large geopolitical blocs that can effectively allow for a sort of planetary governance, in more balanced terms, but also have common positions, but then within those blocs you can have quite a bit of diversity. So you have a sort of Eurasian hub, a pan-African hub, a Latin American hub, and then you have connections among those regions”. “There are many different initiatives, but this has to find a reasonable path forward, which goes along with regional integration mechanisms.
“We’ve seen tectonic shifts in the functioning of the international monetary system”, Arauz said, agreeing that the world is now seeing a new kind of Bretton Woods III emerge. “We need the type of bank that can really serve the Global South”, he urged, calling for a “clearing and settlement bank that can allow for these transactions to take place, and that is not afraid of sanctions from the United States”. This week’s depreciation of the rial comes amid boiling tensions with the West, and as protests in Iran, that started in September last year – which Tehran accuses the West of orchestrating – have persisted.Įarlier this week, the European Parliament overwhelmingly approved a resolution that calls for designating the Islamic Revolutionary Guard Corps (IRGC) a “terrorist” organisation, and for sanctions on Supreme Leader Ayatollah Ali Khamenei, President Ebrahim Raisi and others.Geopolitical Economy Report editor Ben Norton spoke with Ecuadorian economist Andrés Arauz, a former presidential candidate who came close to winning the 2021 elections.Īrauz discussed Latin America’s attempt to create a new currency and regional financial architecture, to challenge what he described as the “hegemonic, neo-colonial” US dollar-dominated system. To combat currency devaluation, Iran’s police force has periodically announced the arrest of dozens of currency speculators in recent months. The cap was introduced after the US unilaterally abandoned the 2015 Iran nuclear deal with world powers in 2018 and imposed harsh sanctions, triggering a new currency crisis in Iran. On Sunday, the central bank said it will soon raise the maximum amount of currency that can be sold to an individual annually from 2,000 euros ($2,176) to 5,000 euros ($5,439) in an apparent effort to show it has no shortage of currency. “Today the central bank faces no limitations in terms of currency and gold reserves, and the main reason behind the currency fluctuations is media hype and psychological operations in the society,” Farzin said on Saturday.Īs the rial went into another freefall on Saturday, the central bank claimed that 300 million euros ($326m) of Iran’s money in Iraq had been received, despite US sanctions, and injected into the market. His replacement, Mohammad Reza Farzin, had vowed to artificially keep the rate of the currency at 285,000 rials against the dollar for imports of essential goods in an effort to keep prices stable during a 40 percent inflation rate. On Sunday, the United States dollar went past the 450,000-rial mark for the first time on the open market.įormer Central Bank of Iran governor, Ali Salehabadi, had been sacked after a previous rapid depreciation of the rial in late December that saw it slump to more than 440,000 against the greenback at the open market. Tehran, Iran – Iran’s currency has reached an all-time record low amid increasing tensions with the West and the unrest gripping the country.
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