Great question: they tried that, and its not working, thus the hyperinflation. HERE'S WHERE IT GETS WORSE:
ft.com/content/87f5b9… They're cracking down on currency exchanges in an effort to prevent the market slide hitting the rial's value.
This is going to be weird to think of like this, but a currency's value is often based around supply and demand. If the supply increases and the demand falls, the value is going to plummet.
So a bunch of rials are printed. That's a supply shock, increasing the supply. That alone decreases the value, so people are trying to switch away from it, lowering the demand, further depressing the value
Then the fucking regime comes along and goes, "NO! NO YOU CANT SWITCH AWAY FROM THE RIAL!" And shuts down currency exchanges people use to get away from the rial
This causes an effective bank run, but this time on the currency itself, as the crackdown causes MORE PEOPLE TO WANT TO SWITCH AWAY FROM THE RIAL.
A bank run is caused by one bank going under, causing everyone else to panic and withdraw money from THEIR banks. The regime trying to shut down currency exchanges causes a similar phenomena, just trading for dollars rather than withdrawing money
Long and short of it: there is no escaping the hyperinflation trap. Not for Iran, not under the current regime.
Protestors have literally WEAPONIZED BANK RUNS. I want to reemphasize that. These genius mother fuckers, and I mean that in the proudest way possible, have taken an economic phenomena and turned it into a weapon against the regime by intentionally causing them
This is unprecedented. INTENTIONAL bank runs? There has never been a protest movement which did this. Period. Unintentional, yes, that's part and parcel of economic collapses, even the subprime mortgage crisis was a bank run on a large scale (topic for another time).
But the Iranian protestors are using it to attack the government-backed banks, causing them to start going under hard and fast. This is also spurring the demand to get AWAY from the rial. The government cant print more rials to save themselves, because NO ONE WANTS RIALS.
Hope that answers the question
